Controls for the Lessor’s Receipt of Movable Assets

These controls have been prepared pursuant to Article 93 (d) of the Enforcement Law promulgated by Royal Decree no. (M/53), dated 13/8/1433AH, which authorizes the Ministry of Justice to issue licenses for the providers of enforcement services, including specialized companies that oversee the process of the lessor’s receipt of movable assets in accordance with controls stipulated by the Ministry of Justice in coordination with the Ministry of Interior.

The following terms and phrases – wherever they occur in these Controls – shall have the meanings assigned thereto unless the context requires otherwise:

1. Company licensed to register contracts: The joint-stock company concerned with registering finance lease contracts.

2. Lessor: The joint-stock company licensed to engage in finance lease.

3. Lessee: An owner of the benefit of a leased asset under a contract.

4. Contract: The finance lease contract.

5. Service Provider: A provider of the lessor’s receipt of movable assets service.

6. Movable Property: A property that can be transferred, such as cars, equipment and the like.

7. Movables: Items found inside a property upon receipt thereof.

Subject to the provisions of the Regulations for Enforcement Service Providers issued by His Excellency the Minister of Justice Decision no. 11326, dated 14/5/1437AH, and the Finance Lease Law issued by Royal Decree no. M/48, dated 13/8/1433AH and its regulations, the working mechanism for the lessor’s receipt of movable assets shall be carried out pursuant to the following procedures:

a. The lessor shall notify the lessee, in case of the latter’s breach of his obligations, of the necessity to fulfill the terms of the contract within a period of five working days.

b. In the event that the lessee fails to fulfill his obligations in a substantial and verifiable manner, and after the lessor submits a request to recover the movable property, the lessor shall notify the company licensed to register contracts after 15 days of such failure of the lessee’s breach of the terms of the contract.

c. The lessee shall be notified of the lessor’s request to recover the movable asset.

d. The company licensed to register contracts shall, upon verifying the eligibility of the financing agency to recover the movable property, notify the service provider of the lessee’s violation of the terms of the contract in cases wherein the contract provides for the right of the lessor to recover the movable property, and shall supply said provider with all the customer’s particulars.

e. Notifications shall be served via electronic means, by sending a text message to the mobile phone or to the e-mail entered in the contract.

The working mechanism shall be carried out as follows:

a. The service provider shall recover the movable property by at least two official employees; a record shall be drafted for this purpose pursuant to an approved form, including the following:

1. The particulars of the lessee, data of the leased asset (including but not limited to the type, color, condition, year of manufacture, value-determining characteristics, and number of ownership deed of the movable property), and any other data that might be useful in establishing its condition;

2. The number and date of the recovery notice as received from the registration company;

3. A description of the condition of the movable property with a photo report establishing its condition upon receipt thereof;

4. An inventory of all movables in the leased asset, if any.

5. The date, place and time of recovery, and the name and signature of the person who drafted the record.

b. The service provider may, when necessary, seek the assistance of specialists (technicians, security personnel, and others) as he deems appropriate to carry out the enforcement.

c. The service provider shall enable the lessee to receive all his movables contained in the property and shall prepare a statement establishing the lessee’s receipt thereof.

d. In the event that the lessee fails to show up or refuses to receive his possessions, the movables shall be disposed of pursuant to the following:

1. If the movables are official documents such as a national identity card, passport, or any other documents issued by a competent agency, they shall be delivered to the issuing agency by means of an official letter.

2. If the movables are of a financial value, they shall be disposed of in accordance with the following:

i. If there is no fear of damage, they shall be kept for a period of 30 days; if the lessee does not come to reclaim same, their value shall be determined by an accredited valuer and they shall be sold; then their value shall be deposited with the competent agency.

ii. If there is a risk of damage, the value of the movables shall be determined by an accredited valuer and they shall be sold; then their value shall be deposited with the competent agency.

3. If the movables are of no financial value, they shall be kept for a period of 30 days; if the lessee does not come for receipt thereof, they shall be destroyed pursuant to a record to be kept in the application file.

4. If the movables are prohibited items, the competent agency shall be addressed for undertaking the case and providing guidance as per the receipt of the leased property.

e. The service provider shall keep the movables upon receipt thereof, as per the applicable procedures in such cases, from the time of receipt thereof until their delivery to the lessor.

The service provider shall deliver the movables to the lessor by means of a record to be signed by the concerned parties; said record shall indicate the condition of the movable, its date, and the time of receipt thereof.

In the event that the lessee is found to have concealed the movable property or claimed otherwise than the truth, the lessor may file a suit with the competent court.

The fees of the service provider shall be specified in the contract, provided that they do not exceed 2.5% of the contract value.