The Real Estate Authority presents a draft for registering usufruct rights in the real estate registry

In a significant regulatory step aimed at enhancing transparency and protecting rights in the Saudi real estate sector, the General Authority for Real Estate announced the release of draft “Usufruct Registration Form” and draft “Usufruct Registration Deed” through the “Istilaa” platform of the National Competitiveness Center. This initiative invites the public, government entities, and the private sector to submit their views and comments on the two drafts before their final approval, reflecting a participatory approach to developing regulations and bylaws.

General context: Within the reforms of Vision 2030

This step falls within the framework of the major transformations taking place in the Saudi economy to achieve the goals of Vision 2030, which places particular emphasis on developing the real estate sector and increasing its contribution to the GDP. The recently launched Real Estate Registration System is a cornerstone of these reforms, aiming to create a reliable and accurate real estate registry that provides full protection for property ownership and enhances the reliability of deeds. Clearly and systematically registering usufruct rights in this registry is a natural extension of these efforts, aiming to document all real rights to the property, whether original, such as ownership, or derivative, such as usufruct and mortgage.

The importance of regulating the right of usufruct and its expected impact

The right of usufruct is a real right that grants its holder (the usufructuary) the authority to use and exploit property owned by another, without altering its essence, and for a specified period. Regulating and officially registering this right is of paramount importance on several levels:

• At the local level, registering usufruct rights will provide clear legal protection for both the property owner and the usufructuary, reducing potential disputes and increasing transaction stability. It will also encourage new investment models, such as long-term leases for tourism, hotel, and agricultural projects, thereby boosting economic activity and creating new opportunities.
• At the regional and international levels, a clear and documented legal framework for rights such as usufruct enhances the attractiveness of the Saudi real estate market to foreign investors. International investors always seek a stable legislative environment that guarantees their rights, and this measure positions the Kingdom among the leading countries in regulating real estate ownership, thereby increasing the flow of foreign direct investment into the sector.

Draft details and protection of parties' rights

The Authority clarified that the draft registration form includes all the necessary provisions to define the scope of usufruct rights and precisely outlines the rights and obligations of both the usufructuary and the owner. This is in accordance with the provisions of the Real Estate Registration Law, specifically Article (13), which mandates the registration of all transactions that create, transfer, or modify real estate rights. The Authority emphasized that these rights are not valid and produce their legal and administrative effects until they are registered in the Real Estate Registry. These procedures aim to enhance the efficiency and accuracy of the Real Estate Registry and ensure the protection of the rights of all parties involved in the market.

Call for community participation

The Authority renewed its invitation to interested parties from all sectors to review the details of the two drafts and submit their comments and suggestions through the “Survey” platform, stressing its keenness to ensure that these new regulatory tools contribute to achieving the effectiveness of the real estate sector, keeping pace with market developments, and enhancing the confidence of dealers and investors in the Saudi real estate environment.