Article 14 of the Saudi Real Estate Brokerage Law
المادة 14 من نظام الوساطة العقارية
The Article sets the brokerage commission at 2.5% of the sale value or of first-year rent unless otherwise agreed in writing, and the party contracting with the broker bears it.
Official text (Arabic)
This article has not been amended since the law was issued.
1- تتحدد عمولة الوساطة العقارية بنسبة (2.5%) من قيمة الصفقة إن كانت بيعاً، ومن قيمة إيجار السنة الأولى فقط إن كانت إيجاراً، ما لم يتفق أطراف عقد الوساطة -كتابةً- على غير ذلك.
2- يتحمل دفع العمولة الطرف المتعاقد مع الوسيط العقاري في عقد الوساطة.
3- في حال أبرم الوسيط العقاري عقد وساطة مع أكثر من طرف من أطراف الصفقة العقارية الواحدة؛ فلا يجوز أن يتجاوز مجموع ما يتقاضاه من عمولة النسبة المحددة للعمولة في الفقرة (1) من هذه المادة، وتحدد اللائحة طريقة تحمل الأطراف العمولة في هذه الحالة، ما لم ينص في العقد على غير ذلك.
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 14 explained in plain English
This Article regulates the amount of the real estate broker's commission and who bears it, in three paragraphs:
1. The amount of the commission:
- On a sale: 2.5% of the value of the transaction.
- On a lease: 2.5% of the first year's rent only, not of the entire lease term.
- This percentage applies unless the parties to the brokerage contract agree otherwise in writing.
2. Who pays the commission: it is borne by the party contracting with the broker under the brokerage contract. If the owner is the one who contracted with the broker, he pays, and if the buyer or tenant is the one who contracted, he pays.
3. Contracting with more than one party: if the broker concludes a brokerage contract with more than one party to the same transaction (such as the seller and buyer together), the total he collects as commission may not exceed the percentage set in paragraph 1. The Regulations set how the parties bear the commission in this case, unless the contract provides otherwise.
This Article is linked to Article 15, which sets when the broker is entitled to the commission, including completing the transaction under the brokerage contract during its term or within a period not exceeding two months after it ends, provided he proves his brokerage. It is also linked to Article 13, which bars the broker from keeping the earnest money as security for his right.
A person with a dispute over the commission can consult a lawyer specialized in real estate cases.
Practical example
Sultan contracted with a real estate office to find an apartment to rent in Riyadh, and rented one at annual rent of SAR 40,000 for three years. Unless they agreed otherwise in writing, the commission is 2.5% of the first year's rent only, that is SAR 1,000, and Sultan pays it because he is the party contracting with the office.
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 14 of the Saudi Real Estate Brokerage Law
What is a real estate broker's commission in Saudi Arabia?
2.5% of the value of the transaction on a sale, and of the first year's rent only on a lease, unless the parties to the brokerage contract agree otherwise in writing.
Who pays the broker's commission, the seller or the buyer?
The party contracting with the real estate broker under the brokerage contract bears it.
May the broker take a commission from both the seller and the buyer?
If he concludes a brokerage contract with more than one party to the same transaction, the total he collects may not exceed the percentage in paragraph 1, and the Regulations set how it is borne unless the contract provides otherwise.
Is the rental commission calculated on the whole contract term?
No, it is calculated on the first year's rent only, unless agreed otherwise in writing.
More articles on Real Estate Broker's Commission
- Article 1
The Article defines the key terms in the Real Estate Brokerage Law, such as real estate brokerage, real estate services, the brokerage contract, commission and security deposit, unless the context requires otherwise.
لغرض تطبيق أحكام النظام، يكون للألفاظ والعبارات الآتية المعاني المبيّنة أمام كل منها، ما لم يقتض السياق غير ذلك: النظام: نظام الوساطة العقارية. اللائحة: اللائحة
- Article 15
The Article sets two cases in which the broker earns a commission: completing the transaction during the contract term or within two months after it with proof of his brokerage, or the transaction failing while the seller or lessor is entitled to the earnest money.
يستحق الوسيط العقاري العمولة في الحالات الآتية: 1- إتمام الصفقة العقارية التي توسط بها، وفقاً لعقد الوساطة، أثناء مدة سريانه، أو خلال مدة لا تتجاوز (شهرين) من ا
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.