Maldives Issues New Procedure for Valuing Tourism Leased Properties

The Auditor General’s Office has unveiled a comprehensive rule governing the valuation of properties and equipment allocated for tourism purposes, aiming to bring transparency and consistency to the compensation tenants receive when their lease agreements expire.

The new procedure, which takes effect immediately, outlines exactly how the monetary value of a leased property – including both movable and immovable assets – should be calculated. 

According to the directive, the purpose is to clarify the procedures to be followed in determining the amount of money to be paid to a tenant as the value of the property, thereby reducing disputes and ensuring fair dealing across the tourism sector.

Key provisions of the rule include:

Condition‑Based Valuation – At the end of a lease, properties must be categorised into three groups—those in operational condition, those out of service, and those excluded from valuation. Only assets that are still operational and directly tied to the business services offered on the site will be counted. This encompasses all movable and immovable items listed in the inventory submitted with the original lease agreement and maintained up to the lease expiry.

Notification Timeline – The Ministry of Tourism is required to notify the lessor (the property owner) to retrieve any remaining goods within 90 days after the lease terminates. Failure to comply may affect the final valuation.

Appointment of an Evaluator – A “special person” – qualified and independent – must be appointed to calculate the value of the compensation. The evaluator’s report must be prepared in the format prescribed by the Office of the Auditor General and submitted to that office for review.

Reporting Standards – All valuation reports are to follow the specific templates and guidelines issued by the Auditor General, ensuring uniformity and audit‑readiness.

Authority for Exceptions – While the rule provides a detailed framework, the Office of the Auditor General retains the final say on any matters not explicitly covered, allowing flexibility for atypical cases.

The Audit Office emphasised that the new rule is intended to protect both lessors and tenants. 

“By setting clear, condition‑based criteria and a transparent reporting process, we aim to eliminate ambiguity and foster confidence in the tourism lease market,” it said.

Industry stakeholders have welcomed the move, noting that the lack of a uniform valuation method has previously led to lengthy negotiations and occasional legal disputes. The Ministry of Tourism has already begun training its staff to handle the notification and retrieval process within the new 90‑day window.