• For the purpose of applying these regulations, the following words and phrases shall have the meanings specified next to each of them wherever they appear in these regulations, unless the context requires otherwise:

  • Ministry: Ministry of Municipal and Housing Affairs.
  • Minister: Minister of Municipal and Housing Affairs.
  • Regulation: Regulation on the Disposal of Municipal Real Estate issued by Royal Order No. (40152) dated 29/06/1441 AH.
  • Municipality: Municipality/ Municipality Secretariat.

Investment contracts subject to these regulations refer to large investment project contracts signed before the issuance of the regulation referred to in item (Second) of Royal Order No. (40152) dated 1441/06/29 AH, whether the contract is in its basic period or in any of the statutory extension periods.

These regulations aim to organize the mechanism for extending existing investment contracts signed before the regulation's enforcement during their validity period, contributing to enhancing investment attractiveness and continuing the development of municipal real estate in a manner that serves the development of cities and governorates.

• The extension of investment contracts during their validity period shall be subject to the following conditions:

  • 1. The investor must be committed to payment.
  • 2. The project must be in the operational phase.
  • 3. The project must require development, comprehensive renovations, construction of additional buildings, addition of new activities, or other matters that necessitate an additional period longer than the remaining duration until the end of the contract or the end of the extension.
  • 4. The investor must submit a comprehensive and integrated study clarifying the comprehensive renovations, buildings, or additional activities the investor wishes to add, along with a feasibility study approved by an accredited office, provided that the intended improvements to be added exceed 20% of the value of the existing buildings.
  • 5. Fifty percent (50%) of the original contract period must have elapsed, or the project must be within any of the statutory extension periods of the contract.
  • 6. There must be no conflict with the future plans of the city or municipal projects.
  • 7. In the event that the extension is for a project that has previously been extended pursuant to Ministerial Decision No. 4200261368 dated 1442/3/30 AH and its amendments, the investor must have completed the comprehensive renovations or fixed additions if included under clauses "Second" and "Third" of that decision.

• The extension periods for investment contracts subject to these regulations shall be according to one of the following cases:

  • 1. If the contract is in its original term, the investor shall be granted an additional fifteen (15) years to the remaining duration of the contract.
  • 2. If the contract is in the statutory extension period and the extension occurred before the issuance of the regulation, the investor shall be granted an additional fifteen (15) years to the remaining duration of the contract.
  • 3. If the contract is in any of the statutory extension periods and the extension occurred after the issuance of the regulation, the investor shall be granted a period not exceeding fifteen (15) additional years to the remaining duration.
  • 4. It is a condition that the total new extension periods after the issuance of the regulation shall not exceed twenty-five (25) years under any circumstances.
  • 5. Upon the expiration of the period referred to in this clause, any additional extensions requested by the investor shall be considered in accordance with the regulations stipulated in Ministerial Decision No. 4200261368 dated 1442/3/30 AH and its amendments, taking into account the provisions of the preceding paragraph.

• The extension of investment contracts subject to these regulations shall be according to the following procedures:

  • 1. The investor submits an extension request to the municipality accompanied by the study referred to in paragraph 4 of item Four of these regulations.
  • 2. The investor submits a timeline for comprehensive renovations or buildings or additional activities to be added, not exceeding 10% of the paid extension period to complete the works. The granted period may be extended according to this paragraph with the Minister's approval.
  • 3. The municipality studies the request by forming a technical committee by decision of the trustee or the head of the municipality consisting of three members to study the request, analyze the study submitted by the investor, ensure the project does not conflict with the city's future direction, and its compliance with these regulations. The committee submits its recommendation to the trustee or head of the municipality for approval.
  • 4. If the investor's request includes amending the main activities, the procedures stated in Ministerial Circular No. 4300101224/1 dated 22/2/1443 AH shall be followed.
  • 5. If the request is accepted based on the regulatory procedures stipulated in these regulations, the request shall be referred to the Investment Committee to estimate the rental value according to prevailing market prices—consistent with the nature of the project changes detailed in the study submitted by the investor—with an estimated increase in investment return rate of 10% every five years, taking into account consultation with two accredited real estate appraisers to estimate the new rental value. The evaluation shall include the value of existing buildings at the time of the extension request and obtain the investor’s approval of the new value.
  • 6. The extension shall be submitted—after completing its regulatory procedures according to these regulations—to the Minister for final approval.
  • 7. Upon the Minister’s approval of the extension, an annex contract shall be concluded with the investor for the extension based on the unified investment contract and the basic contract issued by Ministerial Decision No. 4400032050/1 dated 4/4/1445 AH.
  • 8. If the investor fails to complete the works according to the timeline, the matter shall be referred to the Minister to approve either the cancellation of the extension or granting an additional period if justified.