Article 12 of the Saudi Real Estate Brokerage Law
المادة 12 من نظام الوساطة العقارية
The Article regulates the tenant's security deposit: the broker receives it and hands it to the Authority until the property is delivered, it is returned to the tenant or what remains after damages, and disputes go to experts or the competent court.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يتسلّم الوسيط العقاري الضمان -إن وجد- ويسلمه للهيئة أو من تخوله، ويحفظ لديها إلى حين إعادة تسليم العقار دون أضرار، ويعاد الضمان -أو ما تبقى منه بعد اقتطاع قيمة الأضرار- إلى المستأجر، وتحدد اللائحة ما يتعلق بذلك.\
2- كل خلاف ينشأ بين المؤجر والمستأجر في شأن الضمان وتقدير الأضرار التي يشملها؛ يحل ابتداءً عن طريق خبراء متخصصين -تحددهم الهيئة- بموافقة الطرفين على ذلك، ويتحمل الطرفان أتعابهم مناصفة، فإن لم يتفق الطرفان على قبول حل الخبراء فإن لهما الحق في اللجوء إلى المحكمة المختصة.
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 12 explained in plain English
This Article deals with the security deposit that the tenant pays when renting through a broker, in two paragraphs:
Paragraph 1: the path of the deposit
- If there is a deposit, the real estate broker receives it.
- The broker hands it to the Authority or whoever it authorizes, and it is kept with them.
- It remains kept until the property is handed back without damage.
- The deposit is returned to the tenant, or what remains of it after deducting the value of damages is returned.
- The Regulations set the details on this.
Paragraph 2: a dispute over the deposit
If a dispute arises between the lessor and the tenant over the deposit or the assessment of the damages it covers, it is resolved first through specialized experts designated by the Authority, on condition of the consent of both parties, and the parties bear the experts' fees in equal shares. If the parties do not agree to accept resolution through experts, they have the right to go to the competent court.
The security deposit differs from the earnest money regulated by Article 13 for real estate transactions concluded through the broker. It is also linked to Article 11, which requires the broker to register brokerage contracts and transactions on the electronic platform.
A person in a dispute over a lease deposit who needs to assess their position can consult a lawyer specialized in real estate cases.
Practical example
Majed rented an apartment in Riyadh through a real estate office and paid a security deposit, which the office received and handed to the Authority. When he left, the lessor claimed there was damage in the kitchen and they disagreed over its value. By joint consent they can refer the dispute to experts designated by the Authority, sharing their fees equally, and Majed is returned what remains of the deposit after deducting the value of the damages. If they do not agree to accept the experts' resolution, they may go to the competent court.
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 12 of the Saudi Real Estate Brokerage Law
Where does the deposit the tenant pays to the broker go?
The broker receives it and hands it to the Authority or whoever it authorizes, and it is kept with them until the property is handed back without damage.
Does the tenant get the full deposit back?
The deposit is returned in full if the property is handed back without damage; otherwise what remains of it after deducting the value of the damages is returned.
How is a dispute over the deposit between lessor and tenant resolved?
First through specialized experts designated by the Authority, with the consent of both parties, who bear their fees in equal shares; if they do not agree to accept the experts' resolution, they may go to the competent court.
Who pays the experts' fees in a deposit dispute?
The lessor and the tenant bear them in equal shares.
More articles on Deposits, Guarantees and Clients' Funds
- Article 13
The Article caps earnest money in a real estate transaction through a broker at 5% of its value, requires it to be stated in writing, sets when it is returned, and bars the broker from keeping it.
1- يحدد مبلغ عربون الصفقة العقارية التي تتم عن طريق الوسيط العقاري، بالاتفاق بين أطرافها؛ بما لا يتجاوز (5%) من قيمتها، وفي حال تجاوز هذه النسبة عُدَّ المبلغ مق
- Article 16
The Article bars the real estate broker from receiving amounts from those contracting with him except to the extent his work requires, and from using them for other than their purposes, and the Authority sets the controls for handling them.
1- لا يجوز للوسيط العقاري تسلم أي مبلغ من أي من الأطراف المتعاقد معهم لمصلحة أي منهم إلا بالقدر الذي يتطلبه القيام بعمله، وفقاً لما تحدده اللائحة. 2- لا يجوز لل
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.