Division of Common Property Regulations

The following words and phrases, used herein, shall have the meanings assigned thereto, unless the context indicates otherwise:

1- Common Property: Property commonly owned by two or more persons by virtue of a contract, inheritance, or otherwise.

2- Division Lawsuit: A suit brought by a co-owner claiming his share of a common property.

3- Circuit: The judicial circuit considering a division lawsuit.

4- Law: The Law of Civil Procedures.

5- Division Disputes: Any dispute pertaining to a property subject to the division lawsuit, whether filed by some of the co-owners or by others, such as disputes concerning ownership of part of a common property, establishment of a debt against a deceased, a bequest, or endowment.

6- Division of Benefit: The division of benefit in relation to time or space.

7- Consensual Division: A division that may only be concluded with the consent of the co-owners, as a division otherwise may result in damage or require compensation by a co-owner to another.

8- Compulsory Division: A division that does not result in damage to any co-owner nor require compensation.

9- Inventory List: A statement prepared by a liquidator listing all common property assets as well as associated rights and obligations and an assessment of the value of such assets.

10- Established Co-ownership Property: A property whose ownership is established by an official deed, or which is in the possession of one or more co-owners or a third party, and is not subject of a dispute but lacks official proof of ownership.

The division of a common property involving a minor, absent or missing person, an endowment, or a bequest, shall comply with relevant provisions of laws in all stages of the division or liquidation.

Co-owners having legal capacity may agree on the division of common property in any manner not conflicting with Sharia or law, and such agreement shall be submitted to the relevant agency for attestation.

A division lawsuit may be divided according to the type of the common property: real property, movable property, cash, or any part of such types. Each type shall be filed separately and heard by the same circuit.

Any co-owner of a common real property may file a suit before the competent court requesting the eviction of persons unlawfully possessing such property. Such suit shall be filed by the liquidator or receiver, if applicable.

Co-owners may, during a division lawsuit, agree to divide the benefit of a common property pending a ruling on the suit. If they fail to agree, the circuit may rule on the division of benefits, as necessary.

Service of process in common property division lawsuits shall be made in accordance with the provisions of the Law. The service may be carried out through the liquidator.

If the need arises to question a litigant in a division lawsuit and the facts and documents of the case are not sufficient to establish the truth, the circuit may compel his appearance, subject to the following:

1- The circuit may not compel the appearance of the litigant unless he fails to appear despite being served personally or through another person, or the circuit establishes that he is hiding or deliberately avoiding to appear.

2- The order to compel the litigant to appear before the circuit shall be addressed in writing to the police department in the area where the litigant resides, even if the area is outside the court’s jurisdiction.

3- If the litigant is apprehended prior to the scheduled time of the hearing, he shall be brought directly to the circuit.

4- The circuit may request the relevant agency to place on the arrest list the litigant refusing to appear before it.

5- If the police is unable to arrest the litigant, it shall notify the circuit thereof five days prior to the hearing date. This shall not prevent the police from bringing him in even after the lapse of said date.

6- If necessary, the circuit may include, in its order to compel the litigant to appear, a detention period not exceeding five days for bringing him in. If the litigant is not brought in within such period, the relevant agency shall promptly write to the circuit or its equivalent for instructions.

Subject to the provisions governing non-appearance of litigants under the Law, the circuit may not stay the proceedings in a division lawsuit due to the litigant’s non-appearance or refusal to appear, and shall order the share of such litigant to be kept with the relevant agency.

In a division lawsuit, the circuit’s review shall be limited to property whose ownership by co-owners is established. Where the division requires that further formalities relating to the title deed be completed, the liquidator, if any, shall assume such responsibility; otherwise, the circuit shall request the relevant agencies to complete such formalities or delegate one of the co-owners for such task. A co-owner may assume such task on his own initiative, even without a power of attorney from other co-owners, notwithstanding whether the co-ownership results from inheritance or otherwise. This shall not affect the division of other properties.

1- The circuit shall have jurisdiction to consider disputes between co-owners relating to common property as well as lawsuits for disclosure of assets and documents relating thereto, provided that such dispute has not been filed with another competent circuit.

2- Disputes filed by other than co-owners or by co-owners against third parties shall be subject to the general provisions regarding subject-matter and venue jurisdictions.

Division disputes may not affect the proceedings of the division lawsuit. The circuit shall decide on undisputed common property when ready for division. If not feasible or if the circuit decides that such disputes may result in the consumption of the common property, the circuit shall issue an order to stay the division lawsuit proceedings pending until a resolution of the division disputes.

The circuit may, when necessary, request the relevant agencies or entities overseeing property registration to disclose common properties.

If it is not feasible to provide the circuit with the original title deed of a common property, the circuit shall request the issuing agency to issue a duplicate, which shall replace the original.

The circuit may assign its judicial support unit, if any, to carry out the following tasks within a period not exceeding two months:

1- Ensuring that copies of the required documents are enclosed, such as the deed listing heirs, deed of guardianship, and powers of attorney; verifying the same against the originals; and affixing the ‘as-original’ seal thereon.

2- Requesting co-owners to provide information about common properties and requesting, when needed, relevant agencies or entities overseeing property registration to disclose common properties.

3- Requesting copies of title deeds of common property, such as real property and motor vehicles; verifying the same against the originals; and affixing the ‘as-original’ seal thereon.

4- Enquiring about the validity of title deeds.

5- Making a list of common properties, which includes a description of such properties, location of real properties, and numbers, dates, and issuing agencies of title deeds.

The judicial support unit shall return the documents to the circuit upon completion of assigned tasks or expiry of the period specified by the circuit, whichever occurs first.

The circuit may assign an expert or more to prepare a list of the assets to be divided, stating those that are subject to compulsory division and those that are not, and specify the share of each co-owner in the property subject of compulsory division, in addition to any other information required by the circuit.

Subject to the provisions governing partitioning and sorting, if the common property to be divided includes a property that can be subject to compulsory division, the circuit shall issue a separate ruling for the division thereof where each co-owner receives his designated share. Relevant agencies shall issue documents of ownership. If the property divided is a real property, the notary public shall issue the partitioning, sorting, or merger deeds, even if the title deeds are issued by the court.

The circuit shall order the sale of properties that may not be compulsorily divided and give each co-owner his share of the sale price of such property without the need for valuation unless the co-owners agree otherwise. The sale order, upon becoming final, shall be referred to the competent enforcement circuit for execution in accordance with the Enforcement Law and its Implementing Regulations.

The circuit shall, upon the request of a co-owner and in accordance with the provisions governing summary judgment, decide to give a co-owner a portion of his share in the cash if the circuit establishes his need of such cash for maintenance, provided that the same be deducted from his share upon division.

The circuit shall, when necessary, take all measures needed in an urgent manner in order to safeguard common properties. It may assign the General Commission for Guardianship over Property of Minors and the Like to safeguard disputed common properties, pending decision thereon.

The circuit may, when necessary, appoint a liquidator or more for common properties. The appointment of such liquidator(s) shall be subject to the agreement of all concerned parties. If they fail to agree, the circuit shall appoint a licensed liquidator. If it is not feasible, the circuit shall appoint whomever it deems fit. The appointment decision shall specify the liquidator’s obligations, rights, and powers, including his fees, payment method, and liquidation period, provided that he is paid for either the liquidation or the brokerage. Liquidation shall be under the supervision of the circuit.

If the deceased appoints a trustee, the circuit shall approve such appointment, subject to Sharia provisions relating to bequest allocation. The circuit may appoint said trustee as a liquidator for the estate if he satisfies the necessary requirements or appoint another person as a liquidator in addition to him.

In case of multiple liquidators, the circuit shall provide in the judgment the manner of conducting their duties, including designating a chairman and determining decision-making procedures, unless they are authorized to work individually depending on property type, location, etc. as specified by the circuit.

The circuit may, when necessary, compel the liquidator to provide a solvent guarantor or a bank guarantee commensurate with the volume of the estate to guarantee damages that may result from his negligence or transgression.

If the liquidator dies or resigns and the resignation is accepted, the liquidation shall continue and the circuit shall appoint a substitute liquidator. Transfer of duties between liquidators shall take place through a licensed chartered accountant under the supervision of the circuit.

If the liquidator voluntarily abandons the liquidation without the circuit’s approval, the circuit shall appoint another liquidator. The abandoning liquidator shall be held liable for any damage resulting from such abandonment.

The circuit may, where justifiable, decide to dismiss the liquidator and appoint another liquidator in accordance with summary judgment proceedings.

The circuit shall open one or more bank accounts for the common property subject of liquidation for the deposit of cash and proceeds derived from the sale thereof. Such account may be used for deposits by the liquidator and receiver. Disbursement from the account shall only be made with the circuit’s approval. Such disbursement shall be recorded and shall be made through a bank transfer or a check signed by the head of the court, the circuit judge, and the liquidator.

In the absence of a common property receiver, the liquidator shall assume receivership duties upon appointment unless the circuit decides otherwise.

The liquidator’s fee shall include liquidation expenses unless the circuit decides otherwise. Fees and expenses shall enjoy priority over other debts.

Upon issuance of the decision appointing the liquidator, creditors may not take any action with regard to the common property or continue therewith except against the liquidator. A co-owner may not dispose of a common property, collect debts due to such property, or set off a personal debt against common property debts.

The liquidator shall provide periodic reports on dates specified by the circuit. They shall include a statement of the common property’s condition as well as any increase or decrease thereto, a statement of common property revenues and expenses, remarks and reservations on liquidation actions, impediments, proposals, and finished and unfinished tasks with supporting documents. The circuit shall view such reports, order the completion of any shortcomings, and deposit the same upon completion in the case file. Any co-owner may obtain a copy thereof.

The liquidator represents the common property and may not take any action that may prejudice any rights of the common property, such as acknowledgement of a claim against it, waiver of common property rights, conciliation, or the like unless authorized by the co-owners by virtue of a power of attorney or by one of them vis-a-vis his own share.

The circuit may, if necessary, order the liquidator to serve notice to creditors and debtors of the common property requesting them to provide a statement of their rights and liabilities within a period not exceeding one month from the date of service. The notice shall be published on the Ministry’s website or through any other medium determined by the circuit.

The liquidator shall record any established rights or liabilities associated with the common property and any related information he becomes aware of by any means. The co-owners shall inform the liquidator of any such information, and the liquidator may seek the assistance of experts in inventory and valuation of common properties.

Without prejudice to the provisions of international jurisdiction, if the liquidator establishes that the co-owners have assets relating to the common property outside the Kingdom, he shall represent them and shall take the legal procedures to maintain, manage, and liquidate such assets, including the transfer of any of such assets to the Kingdom, if appropriate, and the sale of immovable property in accordance with the laws applicable in the country where such property is located, taking into consideration the provisions of international treaties and agreements.

Any person, including a co-owner, who unlawfully acquires part of the common property or intentionally impedes the division lawsuit or the liquidation shall be referred to the Public Prosecution for legal action.

The liquidator shall deposit with the court within a period not exceeding three months from the date of his appointment an inventory list showing the rights and liabilities of the common property including an estimation of the value of the tangible assets of the common property, and shall notify in writing all parties concerned in accordance with the service procedures specified in Article 7 of these Regulations. The circuit may extend said period upon reasonable grounds.

1- Any dispute regarding the validity of inclusion or exclusion of items on the inventory list shall be filed by a concerned party in accordance with applicable procedures, by filing a statement of claim with the court reviewing the division lawsuit within 30 days following the notification of the deposit of the inventory list. The court shall register the statement of claim on the day of its filing and shall immediately refer it to the circuit.

2- If the dispute has not been previously filed with the court, the circuit shall consider such dispute if it falls within its subject matter or territorial jurisdiction; otherwise, it shall notify the disputant that he shall file his dispute with the competent court within 30 days from the date of such notification, and a note to this effect shall be entered into the record. If he fails to file it within said period and the circuit finds no reason for suspension, or if he files it and the competent court does not order provisional attachment proportionate to the value of the dispute, the circuit shall order the liquidator to continue the liquidation proceedings relating to such dispute.

Following the lapse of the period set for disputing the inventory list, the liquidator shall, upon obtaining permission from the circuit, pay the undisputed debt of the common property. A disputed debt shall, however, be paid upon the final settlement of the dispute, taking into consideration the provisions of Article 28 of these Regulations.

In all cases, if any of the co-owners is a minor, absent, or missing, or there is a bequest or endowment relating to the common property, a debt may not be paid except upon a final judgment.

If the common property is insufficient or is likely to be insufficient for the payment of the debt, the liquidator shall suspend the settlement of any debt even if undisputed, pending a final decision on disputes relating to the debt of the common property.

The liquidator shall pay common property debts from the cash of the common property, then from the sale proceeds of securities at prevailing market price or from the sale proceeds of movables to ensure prompt settlement of debts. If this is insufficient, the debt shall be settled through the sale of its real property to the extent necessary for payment thereof.

The liquidator shall submit to the circuit a signed and sealed statement showing the amount of debt and the common property assets necessary for its satisfaction. Upon its approval, the circuit shall issue a decision to this effect which shall be final and enforceable. The liquidator shall carry out the sale of such assets as per the decision of the circuit and under its supervision.

1- Upon deducting debts, bequests, and the like from the common property, the liquidator shall divide the same among co-owners as per their agreement, subject to Sharia and law. Such agreement shall be certified by the circuit. Transfer of titles shall be carried out by notaries public and other relevant agencies as per their jurisdiction.

2- If the co-owners fail to agree on a consensual division, the liquidator shall prepare a statement showing the assets that can be subject to compulsory division and the designated share of each co-owner as well as a statement of assets that may not be subject to compulsory division as per the provisions of division under Sharia, and he may seek the assistance of experts, if necessary. The circuit shall issue a separate judgment for each co-owner to receive his designated share of assets that may be subject to compulsory division, without prejudice to the provisions relating to partitioning and sorting.

3- The circuit shall resolve to sell assets that may not be subject to compulsory division and deliver to each co-owner his share of the sale proceeds, unless the co-owners agree otherwise. The liquidator shall carry out the sale as per the ruling of the circuit and under its supervision.

The liquidator shall be liable for any damage affecting the common property, the co-owners, or third parties which results from his infringement or negligence.

If a debt, bequest, or the like is claimed after the common property is divided, the claim shall be decided in accordance with the general provisions governing subject matter and territorial jurisdiction.

The provisions of these Regulations shall not apply to companies governed by the Companies Law.

The Ministry of Justice shall issue licenses to liquidators as per rules regulating their licensing, supervision, classification, and ranking.