In force
Saudi Real Estate Investment Schemes Law
نظام المساهمات العقارية
The Real Estate Investment Schemes Law of Saudi Arabia. This page presents the official Arabic text of each article with plain-English explanations for residents and businesses.
- Articles
- 38
- In force
- 38
- Amended
- 0
- Issued
- 28/12/1444 AH
Issued by: مرسوم ملكي رقم (م/203) وتاريخ 1444/12/28هـ · قرار مجلس الوزراء رقم (881) وتاريخ 1444/12/23هـ
Each article shows the official Arabic text, which is the only legally binding version, followed by our plain-English explanation.
Browse Real Estate Investment Schemes Law by topic
Definitions and Powers of the Real Estate Authority6 articlesLicensing a Real Estate Scheme4 articlesScheme Capital and Shares8 articlesObligations of the Licensee9 articlesReal Estate Scheme Manager4 articlesShareholders' Assembly6 articlesSelling Scheme Assets and Termination3 articlesScheme Violations and Penalties4 articlesGrievances Against the Violations Committee2 articles
Articles of the Saudi Real Estate Investment Schemes Law
الفصل الأول: تعريفات وأحكام عامةArticles 1–4
- Article 1The article defines the Law's key terms, such as real estate investment scheme, participant, licensee, scheme manager, escrow account and register of participants.
- Article 2The article states the Law's objectives: regulating real estate investment scheme activity, raising its level of transparency and disclosure, and protecting the rights of all parties to the scheme.
- Article 3The article makes the General Authority for Real Estate the regulator of real estate investment schemes and lists its powers, from licensing, classification and qualification conditions to fee-basis setting and oversight.
- Article 4The article prohibits offering, advertising, marketing or raising funds for a real estate investment scheme until the Capital Market Authority approves and the Authority issues a license, after verifying the property's title deed and development approvals.
الفصل الثاني: الترخيص والاشتراكاتArticles 5–12
- Article 5The article requires the licensee to be qualified and classified by the Authority to carry on real estate investment scheme activity, as the regulations specify.
- Article 6The article provides that a scheme's capital, on which the number and amount of shares are calculated, is set by the estimated cost from a licensed valuation entity after the approval of the Authority and the Capital Market Authority.
- Article 7The article allows the Authority to require a reserve amount, not exceeding 15% of the estimated cost, to be added to a scheme's capital, which may be used only with the participants' assembly's approval.
- Article 8The article allows a participant to join a real estate investment scheme with an in-kind or cash share, and refers to the regulations the type of in-kind share and its conditions.
- Article 9The article divides a scheme's capital into shares equal in value and rights, limits each participant's liability to the shares they own, and assigns regulation of the register of participants to the Capital Market Authority.
- Article 10The article prohibits lending from a scheme's capital and allows borrowing against the scheme's funds or assets if the scheme agreement includes this, under the conditions the regulations set.
- Article 11The article makes a scheme's net assets owned by the scheme and bars creditors of participants, the licensee and the scheme manager from any right in its funds or assets except what they own in shares.
- Article 12The article requires the licensee's percentage in the scheme to be no less than the regulations specify and held until the scheme ends, and allows other participants to dispose of their shares under the regulations' conditions.
الفصل الثالث: إدارة المساهمة العقاريةArticles 13–21
- Article 13The article makes the licensee responsible for everything connected with the scheme toward the participant, the Authority, the Capital Market Authority, relevant government bodies and third parties, and refers the licensee's powers and limits of responsibility to the regulations.
- Article 14The article requires the licensee, subject to Article 19, to supervise the scheme manager's work and enable the manager to carry out its duties.
- Article 15The article requires the licensee to open an escrow account in the scheme's name at a licensed bank, with controls set by the Authority in coordination with the Saudi Central Bank.
- Article 16The article assigns to the Capital Market Authority the regulation of issuing the real estate investment scheme certificate, which proves a participant's ownership of a share in the scheme.
- Article 17The article provides that a real estate investment scheme acquires legal personality when the Authority issues the license, and that it is then subject to the Law and the Implementing Regulations.
- Article 18The article requires the licensee to appoint a certified accountant and an engineering consultant for each scheme, and refers their conditions, responsibilities and way of working to the Implementing Regulations.
- Article 19The article provides that a real estate investment scheme is run by a scheme manager appointed by the licensee, and refers the manager's conditions, requirements, powers, duties and responsibilities to the Implementing Regulations.
- Article 20The article allows the licensee, the Authority and the assembly to remove the scheme manager, in accordance with the Implementing Regulations, if the manager abuses their powers or fails to perform their obligations, without prejudice to any penalty.
- Article 21The article prohibits the licensee and the scheme manager from taking any decision or action involving an existing or potential conflict of interest, without prejudice to Article 14, and refers the handling of such cases to the Implementing Regulations.
الفصل الرابع: جمعية المساهمينArticles 22–26
- Article 22The article provides that every real estate investment scheme has an assembly made up of all shareholders registered in the scheme register, and refers the assembly's powers to the Implementing Regulations.
- Article 23The article specifies who may call assembly meetings: the licensee, the scheme manager, shareholders representing 10% of the capital, or the Authority on request, with the place of the meeting stated in the notice.
- Article 24The article makes the licensee, or its representative, chair of the shareholders' assembly and confirms the right of all shareholders to attend its meetings.
- Article 25The article sets the quorum for shareholders' assembly meetings: two-thirds of the capital for the first meeting, half for the second within 15 days, and the third within 7 days at any percentage with at least three attendees; decisions by majority.
- Article 26The article allows assembly meetings to be held, and their decisions voted on, by the modern technology means that the Implementing Regulations specify.
الفصل الخامس: انقضاء المساهمة العقاريةArticles 27–30
- Article 27The article prohibits selling a scheme's assets unless they have first been valued by accredited valuers under the Accredited Valuers Law and the Regulations' procedures, and makes any contrary act void.
- Article 28The article sets out the ways to sell a scheme's assets: public auction, direct sale of the whole scheme or part of it, or any other method that the Implementing Regulations specify.
- Article 29The article lists the five cases in which a scheme ends and provides that it keeps its legal personality to the extent needed for liquidation, without prejudice to Article 17.
- Article 30The article requires all financial proceeds relating to a real estate investment scheme to be deposited directly in the escrow account.
الفصل السادس: المخالفات والعقوباتArticles 31–35
- Article 31The article assigns the detection of violations of the Law or the Regulations to employees of the Authority or of bodies it uses, and lets them enter sites and the licensee's premises, seize documents and call on security bodies.
- Article 32The article punishes violations of the Law or the Regulations with a warning, license suspension of up to one year, license cancellation, a fine of up to SAR 10,000,000, or a ban from scheme work of up to 10 years.
- Article 33The article provides for one or more committees formed by the head of the Authority, of at least three members including a Sharia or legal adviser, to consider violations and impose the Article 32 penalties.
- Article 34The article allows a grievance against the Article 33 committee's decision before the Administrative Court within 60 days of the date of notification of the decision.
- Article 35The article punishes with imprisonment for up to three years anyone who violates Articles 4, 21, 27 and 30, with referral to the Public Prosecution for investigation and prosecution before the competent court.
الفصل السابع: أحكام ختاميةArticles 36–38
- Article 36The article gives the Capital Market Authority, in agreement with the Real Estate General Authority, the regulation of raising funds for the purpose of offering a real estate investment scheme, without prejudice to the Authority's powers.
- Article 37The article requires the Authority's board to issue the Implementing Regulations in agreement with the Capital Market Authority within 120 days of the Law's issuance, with effect from the date the Law takes effect.
- Article 38The article provides that the Law is published in the Official Gazette and takes effect 120 days after its publication, and that it repeals every provision that conflicts with it.