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Thursday, Feb 22, 2024

Government agencies can rent real estate outside Saudi Arabia for a maximum 10 years

Government agencies can rent real estate outside Saudi Arabia for a maximum 10 years

The State Properties General Authority revealed the regulations for renting real estate by government agencies outside Saudi Arabia.
According to the regulations, the lease contract shall be for a period not exceeding five years, and it may be stipulated in the contract that it can be automatically renewed for a similar period or periods that do not exceed 10 years.

It is permissible for any government agency to rent property outside the Kingdom only when it is urgently needed, and that the rental is in accordance with the provisions of the issued regulations. There should be a necessary financial appropriation for renting the property in the government agency’s budget.

The government agency shall coordinate with the authority to ensure that there is no real estate available for the state that meets its needs and that the real estate shall be allocated for the purpose for which it was rented. The area of ​​the real estate shall be rented in accordance with the standards approved by the authority.

The regulations stipulate that the government agencies must submit to the authority a request in the prescribed form expressing their desire to rent, specifying the purpose of the rental, the type of property required, the required rental period, as well as the required location, security and technical specifications, such as the number of employees, the number of parking lots and warehouses.

The properties include temporary headquarters for the diplomatic mission or housing for heads of missions or employees. The mission can take advantage of any of the options available in the host country, offices, furnished housing units, hotel apartments or hotels, provided that the real estate is furnished and ready for use for a period not exceeding six months, and it may be extended for a similar period after submitting it to the authorized person in the government agency. This shall be within the limits of the financial appropriations approved in the budget of the government entity.

The estimated cost of renting a permanent headquarters for mission offices or attached technical offices does not exceed $300,000 annually per site, and the estimated cost of renting a permanent residence for the head of mission or staff does not exceed $50,000 per site. This is within the limits of the financial appropriations approved in the budget of the government agency. Regarding the specifications of the property to be rented, it stipulated that it will be free of structural defects and shall neither be subject to dispute, nor belong to any of the authority’s employees or the government agency wishing to rent, or to a first-degree relative.

The government agency must ensure that the contract includes a provision according to which the landlord, during the validity of the contract, shall undertake the maintenance of the basic equipment of the leased property at his own expense, and the landlord shall not be compensated or the rent increased for carrying out remedial maintenance work that limits the use of the property during the contract validity period.
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