What Is the Status of Public Funds Under the Law of Disposition of Municipal Real Estate in Saudi Arabia?

The Law of Disposition of Municipal Real Estate has prescribed the controls for the disposition of municipal public funds and determined that they are not subject to disposition. However, they may, subject to the laws and regulations, be licensed for utilization, at no cost or for a fee, in a manner that does not conflict with their designated purposes.

The second article of the Law of Disposition of Municipal Real Estate stipulated that, subject to the law and its regulations, municipalities may utilize their private funds, by selling or bartering, leasing, or licensing for utilization at no cost or for a fee.

The Law of Disposition of Municipal Real Estate defined public funds as funds allocated for public use, de facto or legally, where all other funds are known as private funds. Private funds include any public funds that have, de facto or legally, ceased to be allocated for public use.

Pursuant to the Law of Disposition of Municipal Real Estate, disposition is subject to the regulations issued by the Prime Minister, upon recommendation of the Minister of Interior and Minister of Finance. Disposition is initiated either in accordance with a decision of the municipal council or a decision of the Minister of Interior in cases of municipalities without municipal councils.

The sixth article of the Law of Disposition of Municipal Real Estate stipulates that the beneficiary of the disposition may not be a minister or a deputy minister, an employee of an entity with which the municipality is affiliated whose rank is grade eight or higher, an employee of any rank at the municipality carrying out the disposition, or a member of the municipal council issuing the disposition decision. The beneficiary may not be a parent, child, grandchild, spouse, or sibling of any of the aforementioned persons, nor may he be an agent or an employee thereof. The right of the beneficiary may not be transferred to any of the aforementioned persons for five years following the disposition, unless the transfer is made through inheritance or a will.