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Ravenous land sharks plague Saudi
Land grabbers in the kingdom are making huge profits on government land, and use every possible means to cheat the municipality.
November 17, 2008 2:25 by kippreport
Vast tracts of land on the outskirts of Jeddah have, over the past few years, turned into a battleground between illegal real estate investors and municipal authorities, reports Arab News.
Samir Ba’sabrain, head of the Monitoring and Land Transgression Committee at the Jeddah Municipality, told the paper that big investors break the laws to earn large sums of profit in these multimillion-riyal illegal operations.
Here’s how it works: well-connected “big investors” sell land to an allegedly unsuspecting second party — a “small investor” — for a very low price, says Ba’sabrian. “In some cases, secondary investors are unaware of the proper procedure to purchase real estate”. He adds that the paved roads on such lands, houses and electricity connections tend to deceive small investors about the legitimacy of the transactions, and that the overcrowded neighborhoods that come up on the land are a security hazard.
To get a feel of how much money is made, Arab News spoke to a former low-level investor, Mohammed Al-Harbi, who says he bought a 50 square meter plot of land from a big investor over 15 years ago for SR5,000 (around $1, 335).
The land, which is located east of the Madinah Highway, had no proper paperwork. “A few years later, I sold it for SR120,000 ($32,000). Today, it is worth around SR400,000 (around $106,600) and, to my knowledge, the government has agreed to hand the owner proper paperwork making the purchase legitimate,” he says. “It was worth the risk.”
Meanwhile, the municipality faces a tough time trying to chase out the encroachers. One of the inspectors told Arab News that their job becomes very dangerous when dealing with land sharks. Although admitting that they often accept bribes to look the other way, he attributed the culture of accepting bribes to the low wages that municipal employees get.
The outskirts of Jeddah have been a place of conflict for some time. In 2008 at least three people were shot there. One shooting took place land worth approximately