Article 14 of the Saudi Real Estate Investment Schemes Law
المادة 14 من نظام المساهمات العقارية · الفصل الثالث: إدارة المساهمة العقارية
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.
Official text (Arabic)
This article has not been amended since the law was issued.
مع مراعاة ما نصت عليه المادة (التاسعة عشرة) من النظام، على المرخص له الالتزام بالإشراف على أعمال مدير المساهمة العقارية، وتمكينه من القيام بواجباته.
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 relationship between the licensee and the real estate investment scheme manager, and imposes two obligations on the licensee:
- Supervising the manager's work; the licensee does not detach itself from the scheme merely because a manager has been appointed, but follows what the manager does.
- Enabling the manager to carry out its duties; that is, not obstructing the manager or withholding what the manager needs to do the work.
The article provides that this is subject to Article 19, which provides that the scheme manager is the one who manages it, that the licensee is the one who appoints the manager, and that the regulations set the manager's conditions, requirements, powers, tasks and responsibilities. So supervision here does not cancel the manager's role in management but operates alongside it within what Article 19 and the regulations provide.
This provision is complemented by Article 13, which makes the licensee responsible for everything connected with the scheme toward the participant, government bodies and third parties; its supervision of the manager is part of bearing that responsibility. It is also linked to Article 15, which requires it to open an escrow account in the scheme's name.
If participants see shortcomings in management or in supervising it, they may consult a lawyer specialized in real estate matters to learn the options available under the Law.
Practical example
A licensee company appointed a manager for a real estate investment scheme in Jeddah. The manager asked for the project documents to start work, so the company must hand them over to enable the manager to carry out its duties, and must also follow and supervise the manager's work, under Article 14.
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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Lawyers who handle this kind of case
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Mohammed bin Saleh Al-Qarawi Law and Notary Office, Riyadh
Frequently asked questions about Article 14 of the Saudi Real Estate Investment Schemes Law
Does the licensee still have a role after a scheme manager is appointed?
Yes, the licensee must supervise the scheme manager's work and enable the manager to carry out its duties.
Who appoints the real estate investment scheme manager?
Under Article 19, the licensee appoints the scheme manager.
Where are the scheme manager's powers set?
Article 19 provides that the regulations set the manager's conditions, requirements, powers, tasks and responsibilities.
Articles this article refers to
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 13
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.
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
- 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.