Economists say the kingdom’s $500bn sector needs faster dispute resolution to build investor confidence
Saudi Arabia needs to establish a specific court system dedicated to the $500bn real estate sector, a Riyadh Chamber of Commerce and Industry official has said.
Real estate is the second largest contributor to the national economy after oil and prices and construction are booming amid soaring population and wealth.
Riyadh Chamber of Commerce and Industry’s Abdullah Al-Maghlouth, a member of the Investments and Security Market Committee, said real estate disputes needed to be dealt with quickly and in specialised courts.
Some government projects had been stalled due to real estate disputes, which could have been avoided if a competent authority was authorized to intervene.
“Setting up real estate courts would provide a single legal authority with the ability to deal with real estate cases, which in turn would help halt foul play in property issues and safeguard the rights of disputing parties,” Al-Maghlouth said.
A semi-judicial committee should be appointed to establish statutes and guidelines for such a court system with the help of local and foreign experts as well as research centres.
Al-Maghlouth said the courts should be based on the Islamic legal system and judges would need to be given special training in handling real estate cases.
He also recommended establishing a real estate commission to support the court system.
The head of Al-Shorouq Center for Economic Studies, Abdul Rahman Baashan, said setting up a real estate court with a clear and transparent vision of how to deal with property disputes would boost confidence among foreign companies and banks operating in the kingdom.
Recently introduced mortgage laws also would be better enforced by real estate courts.
Dubai Courts established a specialised jurisdiction to deal with property and rental disputes in 2008.
It deals with several thousand cases each year.