Article 13 of the Saudi Real Estate Investment Schemes Law
المادة 13 من نظام المساهمات العقارية · الفصل الثالث: إدارة المساهمة العقارية
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
يكون المرخص له هو المسؤول عن جميع ما يتعلق بالمساهمة العقارية تجاه المساهم والهيئة وهيئة السوق المالية وأي من الجهات الحكومية ذات العلاقة والغير. وتحدد اللائحة اختصاصات المرخص له، وحدود مسؤولياته.
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 13 explained in plain English
This article identifies who is accountable for the scheme: the licensee, that is, under Article 1 the person who holds the scheme license from the Authority. Its responsibility covers everything connected with the real estate investment scheme toward:
- The participant.
- The General Authority for Real Estate.
- The Capital Market Authority.
- Any relevant government body.
- Third parties, such as those dealing with the scheme.
The article refers to the regulations the setting of the licensee's powers and the limits of its responsibilities; so the article establishes the principle of responsibility and its comprehensiveness, while its detailed scope is shown by the regulations.
In practice, the participant has a clear party to turn to concerning the scheme: the licensee. This is complemented by Article 14, which requires the licensee to supervise the scheme manager's work and enable the manager to carry out its duties, so the existence of a scheme manager does not mean the licensee has no role. It is also linked to Article 12, which requires it to retain a minimum percentage in the scheme until it ends.
This article does not set claim procedures or the body to which a claim is brought. Anyone with a claim concerning a scheme is best advised to consult a lawyer specialized in real estate matters to learn their route in their case.
Practical example
The handover of the plan was delayed in a real estate investment scheme in Al-Ahsa, and one participant complained of the absence of updates. By the text of Article 13, the licensee is responsible for everything connected with the scheme toward participants and government bodies, even if it has appointed a manager to run it.
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 13 of the Saudi Real Estate Investment Schemes Law
Who is responsible for a real estate investment scheme toward participants?
The licensee is responsible for everything connected with the scheme toward the participant and the other parties named in the article.
Is the licensee's responsibility limited to participants?
No, it also covers the Authority, the Capital Market Authority, relevant government bodies and third parties.
Where are the limits of the licensee's responsibility set?
The regulations set the licensee's powers and the limits of its responsibilities.
More articles on Obligations of the Licensee
- Article 5
The article requires the licensee to be qualified and classified by the Authority to carry on real estate investment scheme activity, as the regulations specify.
يجب أن يكون المرخص له مؤهلاً ومصنفاً من الهيئة لممارسة نشاط المساهمات العقارية وفقاً لما تحدده اللائحة.
- Article 11
The 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.
يكون صافي أصول المساهمة العقارية من أصول ثابتة نقدية وعينية أو حقوق لدى الغير؛ مملوكة للمساهمة العقارية. وليس لدائني المساهمين أو المرخص له أو مدير المساهمة الع
- Article 12
The 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.
1- يجب ألا تقل نسبة المرخص له في المساهمة العقارية عن النسبة التي تحددها اللائحة، وأن يحتفظ لنفسه بملكية هذه النسبة حتى انقضاء المساهمة العقارية. 2- يجوز لبقية
- Article 14
The article requires the licensee, subject to Article 19, to supervise the scheme manager's work and enable the manager to carry out its duties.
مع مراعاة ما نصت عليه المادة (التاسعة عشرة) من النظام، على المرخص له الالتزام بالإشراف على أعمال مدير المساهمة العقارية، وتمكينه من القيام بواجباته.
- Article 15
The 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.
يفتح المرخص له حساب ضمان في أحد البنوك المرخص لها باسم المساهمة العقارية. وتضع الهيئة بالتنسيق مع البنك المركزي السعودي الضوابط اللازمة لحساب الضمان.
- Article 18
The 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.
يجب على المرخص له تعيين محاسب قانوني واستشاري هندسي لكل مساهمة عقارية. وتحدد اللائحة شروط ومتطلبات ومسؤوليات ومهمات وآلية عمل كل منهما وما يترتب عليه، فيما يتعل
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.