Saudi Imposes “Split-Unit” Fines of Up to SR200,000

Municipal authorities in Saudi Arabia have escalated enforcement against landlords and property investors who illegally subdivide residential units, introducing penalties that climb to SR200,000 for serious breaches. The Ministry of Municipal and Rural Affairs and Housing described the measure as part of a broader push to safeguard structural safety and urban planning standards.

Under the updated regulations, violations include converting a single apartment into multiple smaller units without proper authorisation, installing internal partitions or doors to create new entrances, and altering exits or setback areas contrary to permit conditions. All such modifications without formal approvals are now subject to sanctions. Among the most severe consequences, when a building’s structural integrity is compromised or the violation is irreparable without significant reconstruction, the culprit may be required to pay half the value of the building while also restoring damage and obtaining a safety certificate from an accredited engineering firm.

Municipalities have been instructed to intensify on-ground inspections and leverage data from Saudi Arabia’s “Balady” app to detect infractions. The ministry emphasised that not only landlords and property owners but also advertisers, investors and tenants promoting or leasing subdivided units can be held accountable under the new rules.

Violation fines vary depending on severity. Lesser offences carry fines starting from SR5,000, while the top bracket reaches SR200,000. Offenders are also given a 60-day window to rectify the offence following formal notification. Should they fail to comply or if the alterations are deemed unsafe, enforcement measures will be escalated.

Officials point to multiple urban issues exacerbated by unauthorised subdivisions. Increased population density in buildings not designed for it can overload parking facilities, strain utilities and services, and worsen fire and safety risks. Municipal planning and service provision face additional burdens when unexpected load is placed on roads, waste systems and emergency access routes.

The shift reflects a departure from earlier penalties that were more modest. For example, previous reports cited fines in the range of SR5,000 to SR25,000 for illegal building splits. The updated maximum of SR200,000 represents a sharp intensification in regulatory posture. The ministry says the larger fines serve as a stronger deterrent against speculative rental conversions and unapproved densification.

Legal experts and property stakeholders are watching how enforcement plays out in major cities. In Riyadh and Jeddah, where demand for housing and rental yields is high, developers and small landlords are reportedly racing to verify that their building plans and leases comply with municipal codes. Some real estate firms are advising clients to perform internal audits and seek retroactive approvals before inspections arrive.