If any objections are raised by neighbors of the property and are in the public interest, the State Properties General Authority (SPGA) has the authority to stop the rental procedure being carried out by any government entity prior to signing the contract.
Okaz/Saudi Gazette obtained a copy of the draft executive regulations of the Rental Law, which await approval by higher authorities. According to the regulations, state rental operations are regulated through government agencies in a manner that rationalizes financial costs and encourages the development of government-leased properties.
The SPGA obligated 11 ministries to draw up the executive regulations of the Rental Law, including finance, foreign affairs, health, sports, commerce, municipal and rural affairs and housing, justice, investment, education, energy, industry, and mineral resources. The regulations are intended to strengthen governance principles and establish principles of transparency and efficiency in the process of leasing real estate by government agencies. Accordant to the law, a government agency may rent a property that meets its needs from another government agency by direct agreement.
As part of the regulations, it was also approved to study market prices while renting a property based on the prevailing prices as well as prices previously dealt with, along with any price references approved internally and externally, as well as any other criteria approved by the authority. All participants in the study and those who were familiar with it are required to keep the results confidential.
The regulations require that one or more committees be formed to conclude direct agreements, one or more committees to open bids, and one or more committees to evaluate bids.
In accordance with five controls, the regulations allow the government entity to sublease the leased property to others or to give it up to another government entity. Among these controls are: the lease period should not exceed the duration of the basic contract; the space to be leased or ceded should be larger than the government entity's actual needs without conflicting with its future needs for the real estate In the case that the sub-lease contract was concluded with another government agency, then the value of the sub-lease contract would be equal to the value of the basic contract - proportionately; the area to be rented should not exceed 25 percent of the real estate area; and the government agency must comply with the applicable legal provisions and procedures for leasing and investing state properties.
In accordance with the executive regulations, the SPGA may offer a property to two or more government agencies to rent upon receiving a request from them. Provided it rationalizes the financial costs of government agencies and develops the use of the property to be rented without compromising the need for real estate and the nature of their work for these entities.
Multiple rental requests will be combined into one competition if the government agencies agree to rent one property. The competition documents and the letter of intent must specify the number of government agencies interested in using the property.
Competition documents should also clarify the names of government agencies, their activities, and the space allocated to each. Each government entity shall conclude a separate rental contract with the winning bidder in accordance with the provisions of the Rental Law and its executive regulations.
