The real estate sector in Saudi Arabia is witnessing an accelerated regulatory and digital transformation that has contributed to raising the level of transparency and regulation of rental relationship, and the Ejar platform has played a pivotal role in this transformation by standardizing contract procedures and linking them to the relevant authorities. However, this development revealed a regulatory issue that affects a legal segment of investors, namely investors in government properties with long-term investment contracts, such as contracts concluded with municipalities and official bodies.

<In a number of cities, investors have established integrated projects that include shops, commercial galleries and administrative floors under investment contracts that extend for twenty or twenty-five years. However, the challenge arises at the operational stage, where the competent authorities require an electronic lease contract documented through Ejar to issue or renew municipal licenses. The issue is that government investment contracts, despite their legality, are paper contracts that are not registered electronically within the platform, which prevents the investor from documenting sub-leasing contracts, and hinders tenants from fulfilling the license requirements, thus stopping activities and freezing investment assets, despite the completion of projects.

The issue is that government investment contracts, despite their legality, are paper contracts that are not registered electronically within the platform. The issue was further complicated by the cancellation of previous paths that allowed the inclusion of contracts not based on a traditional title deed within the ownership document options, such as government investment contracts and endowment contracts, which at the time enabled a number of investors to appear on the platform and benefit from its services.

The issue was further complicated by the cancellation of previous paths that allowed the inclusion of contracts not based on a traditional title deed within the ownership document options, such as government investment contracts and endowment contracts.

Paper Investment Contract in Crisis«»
However, the subsequent elimination of this route, without providing a clear regulatory alternative, led to the exclusion of this type of contract from the digital ecosystem. This affected not only new investors, but also previous investors whose contracts were registered on the platform prior to this change. With the recent updates, the investor is required to update the property data, but attaching the paper investment contract does not achieve any technical linkage within the platform, which leads to the disruption of electronic procedures related to operation, leasing and licensing.
The core of the issue lies in the lack of digital recognition of the investment right, not the issue of ownership; the investor does not claim ownership of the property, but relies on a fixed legal right to use, operate and sublet, which is documented by an official contract that should be reflected within regulatory platforms.

The investor does not claim ownership of the property, but is based on a fixed legal right to use, operate and sublet, a right documented by an official contract that is supposed to be reflected within regulatory platforms.

Possible solutions
This gap can be addressed through an organizational development that accommodates this type of investment, by:
Creating an approved document type called a government entity investment contract.
Enabling government entities to document their investment contracts directly within the «Ejar» platform through official accounts
Link this documentation technically to allow subletting and fulfill the requirements for municipal and operational licensing.

Possible solutions

Conclusion
The disruption of existing investments due to a regulatory or technical gap does not only reflect on the investor, but also affects the efficiency of the market and the continuity of projects. Absorbing government investment contracts within regulatory platforms is a necessary step to complete a balanced and flexible real estate system that is able to keep pace with the diverse investment reality.