Expropriation is one of the exceptional actions resorted to by the state for reasons of public interest, for public purposes such as infrastructure development, urban renewal, or environmental protection. In this article, we explain the concepts of expropriation, the laws related to takeover, and the aspect of property valuation.
What is the Law on Expropriation of Real Estate for Public Benefit?
It is a law that defines the rules for the expropriation of private property by the government for public purposes such as building roads, schools, or hospitals. The law aims to ensure that property owners receive fair compensation for their property.
The expropriation law was implemented in Jeddah to restructure and develop slums and areas slated for demolition, in line with the Kingdom’s Vision 2030. This measure aims to achieve sustainable development for communities in development project areas, raise the standard of living for citizens, and build a prosperous future by local regulations and international standards.
We cooperated with strategic partners from the government, private sectors, and non-profit organizations to develop comprehensive community development standards that prioritize human rights and aim to ensure a decent life and a stable environment.
What are the main provisions of the law?
Obtaining royal consent: No property can be expropriated without obtaining royal approval from the king.
- Fair compensation: Fair compensation for property owners is determined based on the value of the property and the owner’s needs.
- Grievance right: Property owners have the right to appeal against expropriation decisions to a specialized committee.
- Expropriation Process: The law requires authorities to follow specific steps to expropriate property, including notifying the owner, assessing the property, and providing compensation.
What are the benefits of implementing the law?
- Ensuring that property owners receive fair compensation
- Protecting the rights of property owners
- Ensuring efficient implementation of public projects
A seven-member committee inspects and assesses the property’s value to determine compensation and expropriation value.
- The project owner.
- A representative from the Ministry of Justice.
- A representative from the Ministry of Municipalities and Housing.
- A representative from the Ministry of Interior.
- A representative from the Ministry of Finance.
- Two members of the Saudi Authority for Accredited Valuers.
The real estate valuer must have been practicing the profession for at least 3 years. He must also have experience in assessing the type of property to be expropriated.
What is real estate valuation for expropriation?
Real estate valuation for expropriation estimates the property’s value to determine the fair compensation the owner deserves.
The importance of real estate valuation:
- Ensuring fairness: A fair valuation ensures that the owner receives fair compensation that helps them buy a replacement property of the same value.
- Protecting rights: The valuation protects the owner’s rights and helps them negotiate effectively with the expropriation authority.
- Reduce conflicts: An objective valuation helps to reduce conflicts between the owner and the executing authorities, thereby speeding up the expropriation process.
Stages of real estate valuation:
- Data collection: All information related to the property is collected, including its location, size, characteristics, condition, and price of similar properties in the area.
- Data analysis: The collected data is analyzed using various property valuation models and methods.
- Determine the value: The value of the property is determined based on the data analysis, taking into account all factors affecting the value.
- Writing the valuation report: A comprehensive report is written explaining the valuation steps, the methods used, and the value of the property.
Factors affecting the value of the property to be expropriated:
- Location: The location of the property is one of the most important factors affecting its value, as locations close to facilities and services are considered to be of higher value.
- Size: The size of the property affects its value, as larger properties are more valuable.
- Property characteristics: Property characteristics such as age, condition, and finishes affect the value of the property.
- Price of similar properties: The price of the property to be expropriated is compared to the price of similar properties in the area to determine its fair value.
Real estate valuation for expropriation is an important process that ensures owners receive fair compensation to help them overcome the effects of expropriation.