Article 3 of the Saudi Off-Plan Real Estate Sales and Leasing Law
المادة 3 من نظام بيع وتأجير مشروعات عقارية على الخارطة
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
لا يحق لأي مطور عقاري مزاولة نشاط بيع وتأجير مشروعات عقارية على الخارطة إلا إذا كان مقيدًا في سجل قيد المطورين، ولا يحق الإعلان عنها في وسائل الإعلام المحلية أو الخارجية، ولا إقامة معارض لها والدعوة إليها؛ إلا إذا كان المشروع العقاري مرخصاً له من الجهة المختصة؛ وفقاً لأحكام النظام واللائحة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 3 explained in plain English
This article sets two basic conditions before any off-plan sale or leasing activity:
- Registration of the developer in the developers registry: No real estate developer may engage in off-plan sale and leasing of real estate projects unless registered in this registry. It is the registry prepared by the competent authority under Article 4, in which the names of qualified, licensed developers are entered.
- Licensing of the project itself: Projects may not be advertised in local or foreign media, nor exhibitions held for them or invitations made to them, unless the real estate project is licensed by the competent authority.
In practice, this means that registration of the developer alone is not enough to market a particular project; each project needs its own license before it is advertised or shown at an exhibition. The prohibition covers advertising inside the Kingdom and abroad.
The article states that this is to be in accordance with the provisions of the Law and the Regulations, so the procedures and details of registration and licensing are set by the Implementing Regulations, as Article 4 also shows that the Regulations set the rules and procedures for registration.
This article protects buyers and lessees, as it ensures that whoever offers them units off-plan is a registered body and that the project advertised is licensed. Anyone dealing with an off-plan project would do well to verify the developer's registration and the project's license, and may consult a lawyer who specializes in real estate cases if in doubt.
Practical example
Sarah saw an advertisement on a social media platform for a villa project off-plan in Jeddah, inviting people to an exhibition to reserve units. Under this article the project may not be advertised, nor the exhibition held, unless the project is licensed by the competent authority, and the developer may not engage in selling at all unless registered in the developers registry.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 3 of the Saudi Off-Plan Real Estate Sales and Leasing Law
May a developer advertise an off-plan project before it is licensed?
No. The article bars advertising the project in local or foreign media and holding exhibitions for it or inviting people to them unless it is licensed by the competent authority.
Is it enough for the developer to be registered in the registry in order to sell?
Registration in the developers registry is a condition for engaging in the activity, but advertising and exhibitions also require the real estate project itself to be licensed.
Does the prohibition cover advertisements outside the Kingdom?
Yes. The text covers both local and foreign media.
More articles on Licensing an Off-Plan Sales Project
- Article 4
The 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.
تتولى الجهة المختصة وفقًا للنظام ما يلي: 1- الإشراف على المشروعات العقارية، بما في ذلك إصدار التراخيص اللازمة لها، ومتابعة تنفيذها، والرقابة والتفتيش عليها. ويج
- Article 6
The 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.
1- يجب على المطور الراغب في بيع أو تأجير مشروعات عقارية على الخارطة -بعد قيد اسمه في سجل قيد المطورين- أن يقدم طلبًا إلى الجهة المختصة للحصول على الترخيص الخاص
- Article 7
The 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.
للجهة المختصة -في سبيل تحقيق أهداف النظام وعند الاقتضاء- قيد الشخص الطبيعي في سجل قيد المطورين والترخيص له بمزاولة نشاط بيع وتأجير مشروعات عقارية على الخارطة؛ و
- Article 8
The 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.
دون إخلال بأحكام نظام التسجيل العيني للعقار؛ على الجهة المختصة عند إصدار الترخيص الخاص للمشروع العقاري، طلب إجراء التأشير على صك تسجيل الملكية للعقار المراد تطو
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.