Two leading banks here have offered a number of residential and office property owners and managers guarantees against rent defaults and delays. The Saudi Gazette has obtained letters of the two banks which show each acting independently. The Saudi Gazette estimates total rental income in Jeddah metropolitan region to be over SR4 billion with an average default of 47 percent in 2010. A partner and manager of a well-known Saudi real estate family, requesting anonymity, said “both offers are attractive in light of the fees charged by lawyers or traditional debt collection offices”. The bank offers were sent on a “first name” basis which constitutes a “negotiable offer”, the manager asserted. A risk management first officer with one of the banks refused to confirm or deny the offer but said: “Many people are aware of current problems in rent collection services. Banks are better situated to help both owners and renters streamline their payment schedules.” Abdulaziz Almshaigeeh, a member of the real-estate committee at the Jeddah Governor's office — where most formal complaints are filed against rent defaulters — confirmed the existing problems. “Most of the complaints we receive are from single or family proprietors of apartment buildings but we do receive complaints from managers of residential complexes. Usually a single owner requests immediate eviction but the problems of residential compound managers are much more complex since they are usually tied up with government pending dues. Data at the governor's office shows a 27 percent increase during 2009/2010. Faisal Bataweel, a long-standing first officer public relations with the Jeddah Chamber of Commerce and Industry, welcomed the move and said that the twist is that banks are now offering a business deal. “There were agreements before between banks and owners but conditioned on giving banks powers of attorney. The new deal looks like a business one to me.” An official with “SIMA”, Saudi Arabia's credit bureau, said that SIMA “would welcome all initiatives to enhance public awareness of the importance of credit in our life”. Asked whether SIMA is aware of banks operating debt collection, Fahd Alhattlan, a SIMA official, said: “I like the initiative because it institutionalizes the debt collection business and that is a step forward.” Caption : *Source: The Saudi Gazette; based on data supplied by: (a) Real-Estate Committee/Jeddah Governor's office, (b) JCCI/Real-Estate Committee, 2010 report; (c) Data supplied by the Civil Status, Jeddah Branch, 2010 and (d) data by 20 debt collection agencies in Jeddah __
