It is necessary to distinguish between the Regulation on the Action of State Properties issued by the decision of the Board of Directors of the State Properties General Authority No. (Q/3/15/2022) dated 2/3/1444 AH, and the System for the Action of Municipal Real Estate issued by Royal Decree No. (M/64) dated 15/11/1392 AH.

The Regulation on the Action of State Properties and the System for the Action of Municipal Real Estate aim to establish specific controls for the investment of properties belonging to the state, which Article One of the Regulation on the Action of State Properties defines as "all lands within the Kingdom that are detached from private ownership - confirmed by a title deed - and all lands and buildings owned by the state both inside and outside the Kingdom." Article Three of the same regulation states that "the provisions of the regulation apply to all state properties, except for what the systems, regulations, and orders specify for allocation to government entities or their supervision." Accordingly, it is possible to exempt some state properties from the Regulation on the Action of State Properties, as stipulated in Article One of the System for the Action of Municipal Real Estate, which states that public funds belonging to municipalities are not subject to action, but it is permissible, within the limits set by the systems and regulations, to license their use without compensation or for a fee, in a manner that does not conflict with the purposes for which they are designated. It is understood from this that the properties owned by municipalities are exempt from the Regulation on the Action of State Properties under Article One of the System for the Action of Municipal Real Estate.

Accordingly, disputes between investors and municipalities are governed by the System for the Action of Municipal Real Estate and its executive regulations and the executive instructions for the Regulation on the Action of Municipal Real Estate.