The Real Estate Contributions Committee «Tasfiya» has begun implementing procedures to review deeds and update approximately 380 unlicensed real estate contributions that have been identified over the course of eight years. These new procedures will have a significant positive impact on the workflow for real estate contributions and ensure their swift completion.
Positive Measures
For his part, Hamza Al-Askar, secretary of the Real Estate Joint Ventures Committee «Tasfiya,» said that the sector is going through a transitional phase, emphasizing that the new procedures will have a positive impact by ensuring that ownership deeds are beyond reproach. He explained that there have recently been issues with these deeds.
Al-Askar explained that the committee has processed more than 500 real estate contributions to date, of which only 120 have been licensed, and some of those have been liquidated.Speaking on the sidelines of a panel discussion titled “Provisions for Civil and Commercial Liquidation” organized yesterday by the Legal Society Committee in the Eastern Province, Al-Askar noted that since the year 1426 AH, that is, for the past 13 years, no new real estate contributions have been issued. He emphasized that the number of licensed contributions since that year has not exceeded 120, and those issued prior to that did not receive official licensing but are subject to general customs.
Efforts to Eliminate Delinquency
Al-Askar confirmed that they are responsible for reviewing all real estate contributions in existence at the time of the issuance of Cabinet Decision No. 220, dated 22 Sha’ban 1426 AH, noting that the largest real estate contribution in the Eastern Province was finally referred to them 15 years after it became delinquent—namely, the delinquent contributions of Othman bin Hassan—to resolve its issues alongside the other contributions and ensure the rights of its shareholders.
He explained that the regulations issued in 1424 AH were the first governing real estate joint ventures; among several requirements, they paved the way for new joint ventures, which took on a new character as investors and real estate developers expanded their operations, and they launched several real estate joint ventures until 1426 AH, some of which faced difficulties. He attributed this to the entry of both unqualified individuals and those who were skilled in the field; some exploited the public’s enthusiasm for real estate joint ventures, while others manipulated shareholders" funds.
Al-Askar noted that the decision issued 13 years ago was intended to regulate this sector, starting with licensing by the Ministry of Commerce and extending to the financial market, where the intention was to establish a secondary market for real estate shares, However, this decision was never issued, so no new real estate investment schemes were licensed.
Duties and Powers of »Tasfiya"
It is worth noting that the Real Estate Contributions Committee (Tasfiya) is chaired by His Excellency the Minister of Commerce and Investment and comprises representatives (at the level of Undersecretary) from the Ministry of the Interior, the Ministry of Municipal and Rural Affairs, the Ministry of Justice, and the Ministry of Finance, as well as the Secretary-General of the Saudi Organization for Certified Public Accountants and the Secretary-General of the Saudi Council of Engineers. The duties of this committee are as follows:
1. To review all existing real estate contributions (both licensed and unlicensed) as of the date of issuance of Cabinet Decision No. (220) on 22/8/1426 AH.
2. To appoint, at its discretion, certified public accounting firms to prepare a financial statement for each contribution and to prepare detailed reports covering the register of contributors, their financial rights, and the legal and technical aspects of the contribution, submit periodic reports thereon, and monitor them until their liquidation in a manner that preserves the rights of the shareholders.
3. Assign any contribution to a legal liquidator—if the committee deems it warranted—and it may refer to the competent judicial authorities any person proven to be fraudulent, uncooperative, or misusing the contribution funds.
4. To determine the fees and expenses of any accounting, legal, engineering, or other firms it engages, and to charge them to the contribution’s expenses.
5. Preparing a semi-annual report on its activities and submitting it to the Supreme Economic Council.
6. Establish an operational mechanism that enables it to protect the rights of contributors, liquidate these contributions, and ensure that the Committee to restore shareholders" rights and liquidate real estate contributions established prior to 22/8/1426 AH.Meanwhile, its mission is to liquidate and close real estate contributions through legal channels with the best return and as quickly as possible.
