Explanation of Article 671

Explanation of Article 671

The article refers to the relationship between the preemptor and the buyer, and this relationship is broadly evident if the buyer has taken possession of the sold property before it is claimed by preemption. However, if the buyer has not yet taken possession of the property, the relationship between the preemptor and the buyer is very limited, appearing in minor matters that are almost confined to the buyer's recourse to the preemptor for the sale expenses. Yet, the buyer may take possession of the property from the seller and add to it from his own money or make constructions or plantings, thereby creating multiple relationships between the buyer and the preemptor due to the transfer of possession of the preempted property to the buyer and the existence of additions to it. This article clarifies the ruling on the increase and decrease in the preempted property and explains the rights and obligations of both the buyer and the preemptor.

The first paragraph clarifies the ruling if the buyer increases the preempted property with something from his own money or builds or plants in it before notifying the seller and the buyer of his desire to claim preemption. The buyer, when the preemptor claims preemption, has the option to require the preemptor to pay one of two values: The first: the amount the buyer spent on the increase, construction, or planting. The second: the amount by which the value of the preempted property increased due to the buyer's addition, construction, or planting. For example, if the property's value is three hundred thousand riyals, and the buyer plants trees costing him one hundred thousand riyals, making the property's value five hundred thousand riyals after the planting, and the preemptor claims preemption, the buyer has two options: either to take one hundred thousand riyals from the preemptor, the amount he spent on the planting, or to take two hundred thousand riyals from the preemptor, which is the value increase due to the planting. Undoubtedly, the buyer will choose the higher of the two values.

The second paragraph clarifies the ruling if the buyer increases the preempted property with something from his own money or builds or plants in it after notifying the seller and the buyer of his desire to claim preemption. The preemptor has two options: The first: to request the removal of the construction or planting at the buyer's expense and the restoration of the property to its original state, with compensation if warranted. The second: to retain the construction or planting, provided he pays the buyer one of two values: A- The amount the buyer spent on the increase, construction, or planting. B- The amount by which the property's value increased due to the buyer's addition, construction, or planting. Undoubtedly, the preemptor will choose the lesser of these two values.

It is noted in the provisions of the first and second paragraphs that the general rules of attachment were not applied in either case; rather, the buyer was treated more favorably in both compared to the good or bad faith improver there. The reason for this is that when the buyer builds or plants in the preempted property, whether before or after being informed of the desire for preemption, he is building or planting in a property he purchased, and he may believe, even after being informed by the preemptor of the desire for preemption, that the preemptor is not entitled to preemption.

The buyer's right to demand compensation from the preemptor for what he added to the preempted property in terms of increase, construction, or planting, as stipulated in the paragraphs, does not affect his right to recover all necessary expenses he incurred on the preempted property after taking possession of it from the preemptor, whether he incurred those expenses before or after being informed of the preemption, because after taking possession of the preempted property, the buyer is considered its possessor; and according to Article (677), the possessor recovers all necessary expenses he incurred.

The third paragraph clarifies the ruling if the preempted property decreases and distinguishes between two cases: The first case: if the decrease in the preempted property is not due to the buyer's action, or it is due to the buyer's action but before notifying the seller and the buyer of the desire to claim preemption, the preemptor can take the preempted property at its full price without any deduction for the decrease that occurred. The second case: if the decrease in the preempted property is due to the buyer's action after notifying the seller and the buyer of the desire to claim preemption, the preemptor can take the preempted property and deduct from its price the value of the decrease.

Related To

Article 671

1. If a buyer makes at his own expense any addition to a real property upon which a right of first refusal is established for another person, or if he makes constructions or plantings thereon before he or the seller are notified by the holder of the right of his desire to exercise said right, the holder shall, if he chooses to exercise his right, pay, at the buyer’s discretion, the expenses incurred by the buyer or pay an amount equal to the amount of appreciation to the real property due to the additions, constructions, or plantings.

2. If the additions, constructions, or plantings are made after the notification, the holder of the right of first refusal may, if he wishes to exercise his right, demand removal thereof at the buyer’s expense with compensation, if applicable, or he may retain the constructions or plantings, provided that he pays the expenses incurred by the buyer or pays an amount equal to the amount of appreciation to the real property due to the additions, constructions, or plantings.

3. If the real property upon which a right of first refusal is established depreciates due to acts not committed by the buyer, or due to acts committed by him prior to the notification, the holder of the right may take the property for its full price or leave it, provided that the value of depreciation attributable to the buyer’s acts after notification is deducted from the total value of the property.