New enforcement measures for residents: ban on outside contact and financial restrictions

In a move aimed at enhancing transparency and improving the efficiency of the liquidation system in Saudi Arabia, the Enforcement and Liquidation Support Center (Enfaz) a new guide to regulate the work of appraisers through the "Istilaa" platform. This step complements efforts to govern the technical and financial procedures related to asset valuation, ensuring the rights of all stakeholders in liquidation cases.

The context of governance and the importance of the new regulation

This move is part of the "Enforcement" strategy, aligned with the Kingdom's Vision 2030, which aims to expedite the fulfillment of rights and enhance confidence in the judicial and economic environment. Real estate and professional appraisal is the cornerstone of estate and asset liquidation processes; fair valuation ensures that assets are not undervalued and that beneficiaries receive their full rights. Hence, the importance of the new guide lies in closing any regulatory gaps that could lead to conflicts of interest or subjective interpretations that might harm the asset's value.

Defining responsibilities and limiting powers

The new guidelines unequivocally confirm that the assessor performs their duties solely as a technical advisor, not as a legal representative of the center. The guidelines establish clear red lines that cannot be crossed, most notably:

• Ban on external communication: Preventing residents from direct communication with external parties or those concerned with the origin, and restricting all correspondence to the official channels of the center to ensure documentation of procedures.
• Complete independence: The resident is obligated to disclose immediately and in writing any potential conflict of interest, with concealing this information being considered a serious violation that warrants immediate cancellation of the assignment.
• Adherence to professional standards: It is necessary to comply with the standards of the Saudi Authority for Accredited Valuers (Taqeem), and not to issue any arbitrary estimates that are not supported by clear technical justifications.

Field procedures and strict financial controls

The guide did not overlook the practical aspects, requiring inspectors to conduct preliminary studies, including examining deeds and geographical coordinates, before commencing inspections. It also emphasized the necessity of documenting site visits with recent photographs and detailed reports that monitor the building's condition and surrounding services, while establishing a clear mechanism for addressing security concerns or the presence of occupants.

On the financial front, the Enforcement Authority imposed strict restrictions preventing the center from incurring any additional costs not agreed upon beforehand, requiring written approval for any use of external engineering expertise. These controls aim to curb financial waste and ensure that assessment costs are proportionate to the scope and nature of the assigned work.

Expected impact on the business environment

This guide is expected to improve the quality of technical reports submitted to courts and judicial authorities, thereby expediting the process of sale and liquidation decisions. Furthermore, stricter penalties for negligence or deliberate misconduct will enhance the sector's professionalism and cultivate more competent practitioners, ultimately boosting the attractiveness of the asset liquidation sector in the Kingdom.

The guide concluded its instructions by emphasizing the confidentiality of information, obliging residents to keep documents for a minimum of three years, and prohibiting the reuse of data for other tasks, reflecting the center’s keenness to protect the privacy of data related to shared assets and funds.