In force
Saudi Off-Plan Real Estate Sales and Leasing Law
نظام بيع وتأجير مشروعات عقارية على الخارطة
The Off-Plan Real Estate Sales and Leasing Law of Saudi Arabia. This page presents the official Arabic text of each article with plain-English explanations for residents and businesses.
- Articles
- 30
- In force
- 30
- Amended
- 0
- Issued
- 10/3/1445 AH
Issued by: مرسوم ملكي رقم (م/44) وتاريخ 1445/3/10هـ · قرار مجلس الوزراء رقم (196) وتاريخ 1445/3/4هـ
Each article shows the official Arabic text, which is the only legally binding version, followed by our plain-English explanation.
Browse Off-Plan Real Estate Sales and Leasing Law by topic
Off-Plan Sales Definitions and Scope2 articlesLicensing an Off-Plan Sales Project5 articlesRegister of Real Estate Developers5 articlesProject Escrow Account6 articlesRights of the Off-Plan Buyer4 articlesDuties of Developer, Accountant and Consulting Office5 articlesPenalty for Off-Plan Sales without a License2 articlesOff-Plan Violations Committee4 articlesRegulations and Entry into Force of the Off-Plan Law4 articles
Articles of the Saudi Off-Plan Real Estate Sales and Leasing Law
- Article 1The article defines the key terms of the Off-Plan Real Estate Sales and Leasing Law, such as real estate project, escrow account, developer, real estate unit and common part.
- Article 2The article sets the scope of the Law: off-plan sale and leasing activity in which amounts are received, and off-plan projects of government bodies as suits their nature.
- Article 3The article bars a developer from off-plan sale and leasing unless registered in the developers registry, and bars advertising or exhibiting a project before it is licensed.
- Article 4The article sets the competent authority's tasks: supervising real estate projects, licensing and monitoring them, preparing a public database of licensed projects, and preparing the developers registry.
- Article 5The article allows the competent authority to ask a developer who markets the project through a real estate broker for a copy of the agreement concluded with the broker, as the Implementing Regulations specify.
- Article 6The article lists the documents a registered developer submits to license its off-plan project, and requires the competent authority to decide within 30 days, failing which the application is deemed approved.
- Article 7The article allows the competent authority, when needed, to register a natural person in the developers registry and license them for off-plan sale and leasing under rules set by the Implementing Regulations.
- Article 8The article requires the competent authority, when licensing a project, to ask for a no-disposal annotation on the property's title deed until development is complete, to be lifted only with its approval.
- Article 9The article requires a separate escrow account in the name of each real estate project, activated only after the project is licensed and the property's title deed is annotated.
- Article 10The article dedicates the escrow account to spending on the licensed project only, bars attachment of its funds for the developer's creditors, and requires any project financing to be deposited in it.
- Article 11The article requires a disbursement document signed by the developer, the consulting office and the certified accountant for spending from the escrow account, and allows emergency disbursement at the competent authority's request.
- Article 12The article allows the developer to spend from the escrow account on administrative, marketing and other non-construction expenses up to 20% of the value of the real estate unit sold.
- Article 13The article lets the developer, with the competent authority's approval, withdraw what exceeds the actual cost of finishing the project based on the contractor's and consulting office's report, with 20% left in the account.
- Article 14The article requires keeping 5% of the construction cost in the escrow account, or a bank guarantee of the same percentage, after the completion certificate; it is released only after a year or with latent-defects insurance.
- Article 15The article requires the developer to submit to the competent authority financial statements, prepared by the certified accountant, for each licensed real estate project.
- Article 16The article bars the developer and the landowner from disposing of the common part of the licensed project before the units are separated; after separation, disposal follows the law on ownership of real estate units.
- Article 17The article gives the buyer or lessee, or their representative, the right to see the accounting records concerning them and be given copies, as the Implementing Regulations specify.
- Article 18The article allows the competent authority to request information and data from the certified accountant and the consulting office, to use whomever it sees fit to audit them, and to request a report on the project's progress.
- Article 19The article requires the certified accountant and the consulting office to report violations, requires the competent authority to notify a violator in writing and give a deadline to correct, and to notify the Saudi Central Bank of bank violations.
- Article 20The article requires the developer to finish the project on time and compensates the buyer for late delivery, and lets the competent authority deal with a stalled project and suspend it on violation.
- Article 21The article creates a committee that hears violations of the Law other than the Article 24 offenses and imposes fines up to SAR 1 million; its decisions may be objected to before the Administrative Court within 60 days.
- Article 22The article assigns to inspectors designated by decision of the official the catching, establishing and investigating of violations of the Law and Regulations, without prejudice to the authority of the Public Prosecution in Article 26.
- Article 23The article requires the official to issue a table classifying violations and their penalties within the Article 21 limit, except Article 24 violations, taking into account the seriousness and circumstances of each violation.
- Article 24The article punishes with up to 5 years' imprisonment or a fine of up to SAR 10 million, or both, selling without a license, phantom projects, embezzling funds, failing to deposit them in escrow and similar acts.
- Article 25The article sets the cases for striking a developer off the developers registry: discretionary for not starting within 6 months, repeated stalling or poor quality, and mandatory on bankruptcy or punishment for a serious violation.
- Article 26The article assigns investigation and prosecution of the Article 24 offenses to the Public Prosecution and their adjudication to the competent court, and allows the court to publish a summary of the final judgment at the violator's expense.
- Article 27The article allows the competent authority to charge a financial fee for the services it provides under the Law, as the Implementing Regulations specify.
- Article 28The article requires the official to issue the Regulations within 90 days of the Law's publication in the Official Gazette, to take effect from the date the Law takes effect.
- Article 29The article provides that the Law repeals all provisions that conflict with it.
- Article 30The article provides that the Law takes effect 90 days after its publication in the Official Gazette.
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