In a regulatory move aimed at enhancing transparency and regulating transactions in the Saudi real estate market, the General Authority for Real Estate new regulations granting financial incentives to those who report violations of the provisions governing the relationship between landlords and tenants. These incentives amount to 20% of the collected fine, as part of the Authority's strategy to activate community oversight and protect the rights of all parties.
Organizational context and the importance of the decision
This decision is an extension of the major transformations taking place in the Saudi Arabian real estate sector as part of Vision 2030, which aims to enhance market efficiency and regulation. Following the launch of the "Ejar" electronic platform and the mandatory documentation of contracts, this step to incentivize whistleblowers serves as a supportive tool for official oversight efforts. The importance of this measure lies in closing loopholes that some violators might exploit beyond the reach of direct monitoring, thus contributing to a more stable and equitable rental environment.
Reward eligibility criteria and notification mechanism
The authority has set strict criteria to ensure the seriousness of reports and eligibility for the reward, stipulating the following:
- The information provided should lead to the discovery of a genuine violation that the authority has not previously detected or initiated procedures for.
- A final decision has been issued confirming the violation and becoming definitive.
- The fine amount due is actually collected from the violator.
- The informant must not be an employee of the authority or a first-degree relative of the inspectors responsible for enforcement.
The authority has made it possible for citizens and residents to submit reports through approved electronic channels, with the necessity of disclosing personal data, the type of violation and its location, and supporting the report with the necessary supporting documents.
Targeted violations and evaluation criteria
The new regulations classify violations based on their severity and impact on the market. Among the most prominent violations warranting the highest ratings are:
- The landlord's increase of the total rent in existing or newly concluded contracts is in violation of regulations and bylaws.
- The refusal of landlords in Riyadh specifically to renew the contract and to force the tenant to vacate without legal justification is a phenomenon that the Authority seeks to reduce in order to ensure residential stability.
- Failure to register contracts on the electronic rental services network.
- Increasing the rent for the vacant property beyond the value of the last lease agreement concluded for it, in violation of the specified pricing controls.
The committee's working mechanism and the distribution of rewards
To ensure fairness and integrity, the authority has entrusted the determination of the reward amount to a specialized committee of five members, chaired by a legal expert. The committee considers three main criteria: the severity of the violation, the sufficiency of the reported violation for detection, and the size of the imposed fine.
The reward is calculated using a points system, with top-priority reports (those that would not have been discovered without a report) receiving 20%, decreasing to 10% and then 5% depending on the strength of the report and its role in the investigation. If multiple people report the same incident, the reward is divided according to the size of each individual's contribution, or equally if determining the appropriate amount is not possible.
Expected impact on the real estate market
This decision is expected to bring about a qualitative shift in real estate oversight mechanisms, transforming real estate service users into active partners in implementing the system. This will deter potential violators, reduce rental disputes, and ensure that landlords and real estate brokers comply with regulations, positively impacting price stability and investor and tenant confidence in the Saudi real estate market.
