According to Saudi press reports, the Ministry of Justice has uncovered false land deeds for large swaths of land in Riyadh and other provinces. In Riyadh alone, the total area covered by those fraudulently-issued ownership documents exceeded 500 million square meters, valued at about 400 billion Saudi riyals (about $107 billion).
The event could have major impact on the cost of land ownership and if handled correctly could help many Saudis afford to buy house plots for the first time in their lives.
If the reports are accurate, this may be the biggest case of illegal grab of public land ever recorded in Saudi Arabia. The land in question is equivalent to 500 square kilometers, the size of several small countries put together.
Upon discovering the large-scale fraud, the Ministry of Justice filed legal action to annul the ownership deeds for those lands.
The annulled documents were executed for major land traders and real estate agents, as well as judges and public notaries, some of whom have already been put on leave pending disciplinary action against them.
After completing the process of annulment, the land ownership should revert back to public ownership according to the law.
The Ministry of Justice is taking similar actions in other regions, such as Makkah, Jeddah, Taif, Al-Laith and Khulais, where claims pertaining to about 200 million square meter have also been annulled.
The massive discovery was the result of a number of recent developments at the Ministry of Justice. First, it has established “inspection committees” in the capital Riyadh and elsewhere, whose main job is to examine the validity of suspected land deals and title deeds bestowing bogus ownership of public land to individuals who had no legitimate claim to it.
Second, the ministry has undertaken a mammoth project of electronic documentation and tracking of land deals. Third, several new laws have enabled the ministry to take action against those who seize public land illegally.
For major deals of public land seizures, worth billions of dollars, land thieves needed the collusion of officials in charge of land ownership registration, preferably municipal employees, public notaries and judges. Some of those officials have succumbed to temptation and a few have recently been convicted.
What has made land theft possible is a combination of legal, economic, tradition and oversight factors. By Islamic law, land is owned by the community or the state.
Individuals could own the land as long as there are structures built on them. Agricultural lands could not be owned per se, but those farming them have certain rights as long as they are under cultivation. Once they cease farming them, ownership could revert back to the state.
By tradition, people respected each other’s property and there was little need for written deeds. Those who had written deeds kept their claims in their possession and rarely had they registered them in the courts, and as such there was only sporadic registration. That was the case in Riyadh, until recently.
The major cases of land theft involve public land, as land grabbers take advantage of poor registration and monitoring of those lands, especially in the past. Some cases involve land belonging to “waqf” or charitable endowments, as they usually suffer from poor record keeping and lax trusteeship.
Other cases involve private lands. However, in this case private owners frequently challenge those trying to seize their land and are able to prevent the seizure, or at least tie up the matter in litigation to prevent the intruders from benefiting from their actions.
Economically, there was little motivation for seizing public land because it had no market value until fairly recently. As a consequence, land speculation was non- existent.
However, with the ambitious plans to develop Riyadh, especially after it was chosen to be the administrative capital as well as the political capital, a land rush was started. Speculators laid their hands on public land, sometimes with bogus documents.
Part of the motivation for laying claims to the desert areas surrounding Riyadh was to create artificial scarcity of land where it did not exist; limiting the supply of cheap land forced the prices within the city limit to rise.
It is incomprehensible that land in Saudi Arabia should be expensive, because it has one of the lowest densities in the world. The total land area of the country exceeds two million square kilometers, which means that the share of every Saudi man, woman or child is over 100,000 square meters, or 25 acres of land.
Riyadh in particular should not have a problem of high land prices, because it is in the middle of the desert with few natural boundaries that prevent its expansion.
Only on the west of the side where there are mountains and valleys that could limit, but not prevent, expansion.
Yet it is in Riyadh where land prices skyrocketed first, rising hundreds of times in just one generation. Fifty years ago, a typical house plot cost less than one thousand Saudi riyals, compared to over a million today.
Today, most young Saudis cannot afford a small house plot. It could take them decades to accumulate enough money to buy it.
If the Ministry of Justice continues its efforts to stop the theft of public land, that should make it more difficult for speculators to limit supply of land and create artificial scarcity of available land. That could end land speculation.
If the government then in turn starts granting or selling small pieces of land to ordinary citizens, that should in turn prevent land prices within the city limits from rising.
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