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Expats infiltrate property rental business posing security risks
Published in The Saudi Gazette on 22 - 09 - 2012


Saudi Gazette report
JEDDAH — Saudi owners who appoint expatriates to manage their properties are being deprived of substantial revenue. They also hurt the national economy as large parts of these funds are transferred abroad.
This tendency has also led to social and security risks, as undocumented foreign workers are heavily present in the housing and apartment rental business, Al-Jazirah newspaper reported.
Dr. Abdullah Al-Maghlouth, a member of the Real Estate Committee at the Riyadh Chamber of Commerce and Industry, said that investment in building and apartment rentals is a profitable venture in the hospitality sector.
However, the absence of Saudi management, and leasing the property to others, whether companies or individuals, resulted in expatriates dominating the property management sector. They control buildings and apartments inhabited especially by foreigners. This is illegal, since foreigners are not allowed to manage, operate and lease apartments or buildings, as stipulated in the regulations of the ministries of interior and commerce.
Al-Maghlouth said this phenomenon has spread in different cities of the Kingdom, and called for an immediate response by the Ministry of Interior and the Ministry of Commerce to visit the sites and put an end to the infiltration of foreigners in our real estate market, as well as initiate a mechanism for development of real estate property management by qualified Saudis.
Fadul Al-Buainain, an economic expert, said the presence of foreign workers in this sector is illegal. This happens because of many Saudis allow foreigners to hire and manage buildings for a percentage of profits or a monthly royalty depriving the citizens of investment opportunities and landlords from huge profits.
This also causes the depletion of foreign exchange and a drain of much needed capital that were supposed to remain at home.
Another issue to consider is that of security as the foreigner focuses on income without any consideration to the values, or laws and regulations.
Some would not hesitate to rent their buildings indiscriminately and many criminal gangs find refuge in these buildings, while some buildings have become centers for vice, or shelters for violators of residency law.
Social risks also exist, as foreigners may rent an apartment to three families, or mix singles with families. They may also allow singles to live near family apartments. Other risks that may negatively affect society include total neglect of safety standards.
During a tour of some affluent suburbs north of Riyadh, Al-Jazirah noticed people of various nationalities living in the same building, in some cases with many occupants in a single apartment.
A Pakistani national said he rented his living space through the help of his countrymen, paying SR500 per month.


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