Real Estate Endowment

A real estate endowment is an owner's unilateral dedication of a specific property (land, a building or a unit) as a waqf, so that it leaves his ownership and its rent or use goes to a charitable cause or to beneficiaries named in his conditions. In Saudi Arabia it is created by official documentation with the Ministry of Justice, not by a decree or government decision. It is the most common form of waqf in the Kingdom because property is a lasting asset that produces regular rental income. The process runs in stages: confirming the title deed is valid, owned by the founder and free of anything that prevents disposal; documenting the waqf through the 'waqf documentation' service on the Najiz platform, specifying its type (public, family or joint), the nazir and his powers; and registering it with the General Authority for Awqaf. In areas where the Real Estate Registry is operating, the waqf must also be recorded in the register, because Article 13 of the Real Estate Registration Law lists waqf among dispositions that take effect only upon registration. Transferring a property without consideration to a registered waqf is exempt from the 5% Real Estate Transaction Tax. Once created, the nazir is responsible for leasing and maintaining the property, collecting and distributing its income under the conditions, and preparing annual accounting reports reviewed by the Authority. Endowed property may be invested and developed, and exchanged for a better property when there is a clear benefit, with the permission of the competent court. Under the Civil Transactions Law, a beneficiary's claim against the nazir for waqf income due to him is not heard after ten years, so beneficiaries should follow up their entitlements regularly.