Article 7 of the Saudi Real Estate Finance Law
المادة 7 من نظام التمويل العقاري
The article requires the beneficiary to have a credit record with a licensed service provider, and the beneficiary's credit behavior data to be entered in it throughout the finance term.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب أن يكون للمستفيد سجل ائتماني لدى أحد مقدمي الخدمة المرخص لهم وفقًا لنظام المعلومات الائتمانية، وأن تدرج فيه بيانات سلوكه الائتماني خلال مدة التمويل، وتحدد اللائحة وتعليمات المؤسسة الحد الأدنى لمدة سجل المستفيد، وبيانات السجل خلال مدة التمويل.
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 7 explained in plain English
This article links real estate finance to the beneficiary's credit record. The beneficiary, under Article 1, is the natural person who obtains real estate finance. It contains two obligations:
- Having a credit record: The beneficiary must have a credit record with one of the licensed service providers under the Credit Information Law.
- Updating the record throughout the finance term: The record includes data on the beneficiary's credit behavior during the finance term, meaning that regular payment or lateness appears in the record.
The article refers to the Implementing Regulations and the Agency's instructions to specify two matters:
- the minimum length of the beneficiary's record; and
- the record data during the finance term.
The article itself does not specify a particular period or the type of data; the reference for that is the Implementing Regulations and the Agency's instructions.
The practical meaning for the beneficiary: your payment behavior during the finance term is recorded, and this affects your credit profile. This article comes after Article 6, which allows financiers to cover risks with cooperative insurance, and is followed by Article 8, under which the Real Estate Development Fund allocates guarantees and aid to support real estate finance for subsidy-eligible persons and housing associations.
If you have a problem with your credit record connected to real estate finance, you can consult a lawyer specializing in banking and real estate finance.
Practical example
Reem obtained long-term real estate finance to buy an apartment in Jeddah. Throughout the finance term, data on her credit behavior is entered in her record with a licensed credit information provider. If she is late on some installments, this data appears in her record as the Implementing Regulations and the Agency's instructions specify.
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 7 of the Saudi Real Estate Finance Law
Is a credit record required to get real estate finance?
The article provides that the beneficiary must have a credit record with one of the licensed service providers under the Credit Information Law.
Is my late payment on real estate finance recorded?
The beneficiary's credit behavior data is entered in the record during the finance term.
What is the minimum length of the credit record?
The article does not specify it; it refers it to the Implementing Regulations and the Agency's instructions.
More articles on Beneficiary Protection and the Credit Record
- Article 2
The article makes the Agency responsible for regulating the real estate finance sector and lists its powers, from licensing financiers to reviewing contracts and setting cost disclosure principles.
تختص المؤسسة بتنظيم قطاع التمويل العقاري، بما في ذلك ما يأتي: 1 - السماح للبنوك بمزاولة التمويل العقاري بتملك المساكن لأجل تمويلها - استثناءً من حكم الفقرة (5)
- Article 6
The article allows real estate financiers and real estate refinancing companies to cover real estate finance risks through cooperative insurance, in accordance with the Implementing Regulations.
للممولين العقاريين وشركات إعادة التمويل العقاري تغطية مخاطر التمويل العقاري بالتأمين التعاوني وفقًا لأحكام اللائحة.
- Article 13
The competent court decides disputes over real estate finance contracts, and imposes the penalty in the Finance Companies Control Law on anyone proven to have delayed paying their debt.
تتولى المحكمة المختصة الفصل في المنازعات الناشئة عن عقود التمويل العقاري، وإيقاع العقوبة المنصوص عليها في الفقرة (1) من المادة (الخامسة والثلاثين) من نظام مراقب
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.