How can a landowner legally avoid a fee of one hundred thousand riyals?

How can a landowner legally avoid a fee of one hundred thousand riyals?

The plaintiff filed a lawsuit before the Administrative Court in Riyadh on 21/12/1443 AH against the Ministry of Municipal and Rural Affairs and Housing, requesting the cancellation of the decision imposing a fee of one hundred thousand riyals on undeveloped land on her property.

The plaintiff submitted her objection to the fee based on Article 9 of the Implementing Regulations of the White Land Fees System for the year 1437 AH, which exempts lands from the fee in the event of an impediment or obstacle preventing the owner from disposing of or developing them, provided that he is not the one who caused this impediment.

The obstacle in question was that her share of the land was subject to a legal dispute that resulted in a final ruling to reduce her ownership percentage and return it to the estate of the deceased, in addition to the fact that the land was subject to judicial liquidation procedures and that there were endowment shares in it.

 Abdulaziz bin Yasser Al-Anzi Law Firm

Article Contents

The plaintiff's reasons:

The defendant's (ministry's) defenses:

Court ruling:

Reasons:

Legal lesson:

Opinion of Abdul Aziz Bin Yasser Al-Anzi Law Firm and Legal Consultations:

Source:

The plaintiff's reasons:

The plaintiff based her defense on the following points:

The existence of a legal impediment: She confirmed that the court ruling issued to marginalize the land is considered an impediment to disposal, as her share has become subject to dispute and must be returned to the estate, which prevents her from disposing of the land.

Restrictions on disposal: She explained that the existence of endowment shares in the estate prevents any disposal of the land without judicial permission, as stipulated in Article 223 of the Sharia Procedures Law.

Not causing the impediment: She confirmed that she did not cause this impediment, as the estate liquidation lawsuit was filed in 1429 AH, which is years before the issuance of the White Land Fees System in 1437 AH, and that the delay in the marginalization procedures on the deed is beyond her control.

Error in calculating the fee: She indicated that the percentage adopted by the ministry in calculating the fee is incorrect, and differs from the percentage established by the court ruling, which makes imposing the fee invalid from the outset.

The plaintiff is not the cause of the impediment, but rather her hands are tied from acting because of the judicial proceedings.

The defendant's (ministry's) defenses:

The ministry responded to the plaintiff's claim with a denial, based on several arguments:

Lack of a real dispute: It was claimed that the dispute was not real and did not prevent the heirs from disposing of the property, and that the lawsuit was filed long after the system was issued, which raises suspicion that it was to evade the fee.

Possibility of disposal: She confirmed that the land is jointly owned and the heirs can dispose of it, and that their failure to dispose of it represents implicit approval of the status quo.

Correctness of the fee calculation: It stated that the fee was imposed based on the data proven in the ownership document at the Ministry of Justice, and that this data is correct until it is officially amended.

The owner caused the impediment: It was stated that failure to complete the procedures and the marginal note on the deed fall under the category of “the owner causing” the impediment, which disqualifies him from the right to exemption from the fee.

The heirs’ refusal or negligence in registering the endowment or the transfers does not exempt them from the fees, because “the negligent one is more deserving of the loss.”

The lawsuit was filed only many years after the system was issued, which indicates an attempt to evade paying the fee.

Court ruling:

The court ruled to cancel the fee imposed on the land in question, and the ruling was upheld by the Court of Appeal.

Reasons:-

Article (9/1) of the Implementing Regulations of the White Land Fees System explicitly stipulates two exceptions:

There is an impediment preventing the owner from acting, provided that he is not the cause of it.

The existence of an obstacle that prevents obtaining licenses or developing the land, provided that the owner is not responsible for it.

It is established that the land in question was part of the estate subject to judicial dispute since 1429 AH, and that a ruling was issued appointing a liquidator for the estate, which prevents the heirs from disposing of or developing it until the division procedures are completed, thus proving the existence of an impediment to disposal.

The plaintiff is not the cause of the impediment, but rather the impediment resulted from binding judicial procedures, which is what applies to the exception stated in Article (9/1).

The percentages adopted by the administrative body in calculating the fee were based on inaccurate data, as they differed from the percentages established by the final judicial ruling.

Article (17) of the Implementing Regulations mandated that the fee be calculated for each owner according to his correct share established by law, which the defendant entity did not comply with.

It is not correct to rely solely on the issuance of a joint deed to prove the possibility of disposal, since the deed does not negate the state of joint ownership nor does it remove the judiciary’s control over the estate.

Legal lesson:

A fee may not be imposed on the owner unless he is able to dispose of his land and is not responsible for the continued presence of the impediment or obstacle.

Official data in the real estate registry does not determine rights until final judgments are issued, and the imposition of the fee must correspond to the judicial reality and not to temporary or outdated records.

The existence of a legal dispute that prevents the disposal of the land, or the land being subject to judicial liquidation with the existence of endowments and final judicial rulings, constitutes a direct impediment to imposing the white land tax.

Opinion of Abdul Aziz Bin Yasser Al-Anzi Law Firm and Legal Consultations:

The vacant land fees system and its implementing regulations were recently amended, but the text of Article 9 regarding the existence of impediments has not changed. Rather, it was renumbered in the new regulations under Article 8 with the addition of new exemptions, which means that the principle on which the court based its decision in this case is still valid and can be invoked in similar cases.

This ruling provides a strong argument for any landowner facing a legal dispute over ownership or an estate liquidation that prevents its development, since the imposition of fees should be based on the actual ability to dispose of the land, and violating this contradicts the principle of legal and regulatory justice.

It is possible forAbdulaziz bin Yasser Al-Anzi Law FirmThe assessment and winning of the case against the white land fees, even after the amendment of the system and its regulations, is based on the stability of the principle of exemption due to the existence of an impediment or obstacle not caused by the owner, as stated in Article (8) of the new regulations. The assessment focuses on verifying the existence of a judicial dispute or regulatory restriction that prevents the owner from disposing of or developing (such as judicial liquidation and joint ownership with endowments, or suspending the deed pending marginalization procedures), then proving that his client was not the cause of this impediment, while challenging any inaccurate data on which the authority relied in imposing the fee. Thus, his defense is based on the fact that imposing the fee violates the provisions of the regulations and the regulations for the division of joint funds, and it relies on judicial precedents such as this ruling to cancel the fee.

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Source:

The Administrative Judicial Rulings Code issued by the Board of Grievances for the year 1444 AH, Volume One, Case dated 19/9/1444 AH, pp. 572 to 592.