Article 11 of the Saudi Real Estate Finance Law

After a bank or finance company extends real estate finance, it may need liquidity to finance new customers. This is where refinancing comes in, and the article allows real estate financiers two ways to do it:

1. Real estate refinancing companies, under the provisions of the law and the Implementing Regulations.
2. Securities, under the provisions of the Capital Market Law.

The article restricted this with the phrase "without prejudice to what is stated in Article (3)". Article 3 provides that the real estate financier carries on real estate finance business:

• in a way that does not conflict with the provisions of Islamic Sharia, based on what the Sharia committees referred to in Article 3 of the Finance Companies Control Law determine; and
• in a way that does not harm the soundness of the financial system and fairness in dealings.

Refinancing, by either route, therefore remains subject to these requirements.

This relates to the secondary market, where the financier's rights arising from finance contracts are traded. After it comes Article 12, which exempts mortgage transfer procedures in the secondary market from registration fees under the Real Estate Registration Law, and before it comes Article 10 on tax incentives for investment in real estate securities.

This article concerns financiers mainly and does not address the effect of refinancing on the beneficiary's contract. If you have questions about that in your contract, you can consult a lawyer specializing in banking and real estate finance.