In the name of Allah, and all praise is due to Allah.
The expropriation of real estate for public interest is a lawful compulsory administrative measure intended to avert harm and achieve the public interest. The administrative authority does not acquire ownership of the property unless and until compensation is paid.
This was established under Article 24 of the Law of Expropriation of Real Estate for Public Interest and Temporary Taking of Real Estate, issued in 1447 AH, which provides:
“If the property designated for expropriation is vacated before the procedures for disbursing compensation are completed, the owners of the properties designated for expropriation shall be entitled to fair rental value for the period between vacating the property and completing the compensation procedures, plus an additional amount equal to ten percent (10%) of the fair rental value, unless the delay in receiving compensation is attributable to them.”
Article 17 of the former Expropriation Law issued in 1424 AH also provided:
“In all cases, if the project-owning entity removes the property owner from his property or prevents him from benefiting therefrom before receiving compensation, whether exceptionally or otherwise, he shall be granted fair rental value for the period between vacating the property and receiving compensation, unless the delay in disbursing compensation is attributable to him. The fair rental value shall be assessed by the committee referred to in Article 7 of this Law.”
It follows from the foregoing that the property designated for expropriation remains under the ownership of its owner unless and until compensation is received. Accordingly, if the authority vacates the owner from his property or prevents him from benefiting from it before compensation is received, and the owner is not responsible for the delay in disbursing the compensation, he shall be entitled to fair rental value from the date of vacating the property or from the date on which it is established that he was prevented from benefiting from it.
It is also worth noting that a claim for fair rental value may be admitted before the judiciary even if the property owner has not yet received compensation.
Several principles have been issued by the Supreme Administrative Court confirming the above. These include the judgment issued in Objection No. 3041 of 1442 AH, which stated:
“The implication of the law is that if the project-owning entity removes the property owner from his property or prevents him from benefiting therefrom before receiving compensation, and the owner is not responsible for the delay in disbursing compensation, he shall be granted fair rental value for the period between vacating the property and receiving compensation, and not from the date of the expropriation decision.”
The principle issued by the Supreme Administrative Court in Objection No. 356 of 1439 AH also stated:
“Interpreting the statutory text to mean that fair rental value becomes due only upon receipt of compensation is an interpretation contrary to its intended meaning, since it is possible to examine the extent to which the property owner is entitled to fair rental value without his receipt of compensation for the property having any effect on, or constituting any bar to, such entitlement.”
Mr. Ahmed Mohammed Al-Dawwas
Attorney at Dhamanah Law Firm and Legal Consultations
Former Judge at the Courts of the Board of Grievances
