Friday, July 6, 2012

Housing in Saudi Arabia


One of the frequently asked questions by expatriates planning to work in Saudi Arabia is the cost of housing. Indeed, barring a few sponsors, most employers prefer giving an allowance rather than accommodation to their employees who are then left to fend for themselves.

You always need to sign a contract with the apartment owner or his authorized agent before you officially become a tenant. There are a few things you need to know before you move in.

Please note that the housing contract is independent of the contract between you and your employer. House rents in Saudi Arabia are always paid in advance by cash and are paid either annually or once every six months. A few owners also take quaterly payments. If you pay the whole year's rent in advance, there would usually be a slight discount in the rate as compared to six monthly rent. There is a brokerage to be paid and also a security deposit.

Probably the worst part of housing contracts in Saudi Arabia is that they are totally one-sided in favor of the house owners. If you do not like the apartment and would like to vacate, your money for the rest of the unutilized period would not be refunded. In return, the house owner is not allowed to increase the rent until the end of the contract. Some big favor! The only exception is when you leave the kingdom on final exit. But this too is totally dependent on the whims and fancies of the owner.

In order to get back the amount from the owner for the unutilized part, most expatriates staying in apartments usually find other expats who are willing to come in as their replacement and get the money from them for the rest of the contract period. However, in any case it is advisable to transfer your name to the new tenant, otherwise you would be liable to pay for any damages caused by the new tenant if your name is still on the records.

Maintenance is something you should stop expecting from apartment owners. Many contracts have specific clauses regarding maintenance but they are very rarely honored. Before you move into any apartment, make sure that nothing is in damaged condition. Also, ensure that the house is white washed and in good livable condition, otherwise you would be forced to pay for it when you vacate. Most important, ensure that all electricity bills have been paid by the previous tenant.

A few years back, one could easily get a decent 2-bedroom house for SR12,000 / year. Those days are long gone. It costs anywhere between 22000 to 25000 / year on an average. Of course, this is a thumb rule figure and it depends on the city / locality where you stay.

Western expatriates usually prefer to stay in compounds where some limited amount of freedom is available. Within the walls of such compounds, it is not compulsory for women to wear the abaya. Also, such compounds come fully furnished. You should get a villa for about SR 60 to 70000 / year on an average. Most compounds come with swimming pools and invariably have high security.

For those planning to work in the kingdom, please consider these points while negotiating with your employer, otherwise you would end up with a hole in your pocket.

1 comment:

John Martin said...

Thanks, Expatguru. It was really an eye-opener for a newbie like me. Will take care of it when I negotiate with my employer.