New Regulation Reduces Facility Disputes and Service Fees

Gulf Real Estate Regulation Enhances Governance of Residential and Commercial Complexes

The Saudi Council of Ministers on Tuesday approved the unified rules for owners of common property in Gulf Cooperation Council states, in a step aimed at unifying the principles regulating the management of jointly owned real estate, enhancing governance and transparency in the management of residential and commercial complexes, while each country retains the authority to set implementation mechanisms according to its national legislation.

The decision came after the Supreme Council of the Gulf Cooperation Council, during its 46th session held in the Kingdom of Bahrain in December 2025, adopted the final version of the rules, following legal and technical reviews involving committees of housing ministers and heads of legislative departments in the council states, reflecting a Gulf trend to unify minimum regulatory standards for common property.

The rules stipulate that each state shall issue or align its national legislation to regulate common property, with the possibility of adopting more comprehensive provisions if local regulations require. The document represents a common regulatory framework defining the basic principles for managing this type of property without replacing national laws.

The scope of application includes properties containing independently owned units, such as 'apartments, shops, floors, and villas,' along with common parts and facilities. The rules also mandate the creation of a special register for common property containing the property's plan and its basic system, with access to its data for stakeholders according to approved procedures.

The rules establish an institutional framework for managing common property by requiring owners to form an owners' association or union with independent financial and administrative legal personality, comprising a general assembly that elects its chairman, and appoints a property manager responsible for day-to-day management. It also requires the adoption of a basic system regulating management and utilization mechanisms after approval by the competent authority.

On the governance side, the rules require all occupants, whether owners, tenants, or beneficiaries, to adhere to the property's basic system, specifying responsibilities related to maintenance and management fees and other financial obligations. They also grant the competent authority the right to access financial data of owners' associations, including revenues, expenditures, and service fees, to enhance transparency and financial oversight and reduce disputes.

The rules impose restrictions on any modifications affecting the structural framework or external appearance of units or any essential part of the common property, requiring approval from the owners' association or union and compliance with regulatory procedures, with the violator bearing the costs of repairing resulting damages. They also regulate insurance provisions for common property according to national legislation.

The adoption of the unified rules represents an additional development for the Saudi real estate market, which is witnessing expansion in urban development projects and multi-use complexes within the goals of Vision 2030. The new regulatory framework is expected to raise asset management efficiency, enhance the quality of complex operations, and improve maintenance and management work, which is expected to boost confidence of local and foreign investors by providing clearer rules for owners' rights and obligations, reducing disputes over common facilities and service fees, and supporting transparency and financial disclosure in complex management.

Observers believe that unifying regulatory principles at the Gulf level may help facilitate real estate investment movement between council states, enhance the attractiveness of the common property market by protecting owners' and investors' rights, improving asset management efficiency, and establishing a more stable regulatory environment supporting the sector's sustainable growth.

Unifying Gulf real estate regulatory principles facilitates real estate investment movement between council states and boosts confidence of local and foreign investors.

The rules impose restrictions on any modifications affecting the structural framework or external appearance of units or any essential part of the common property.