Article 15 of the Saudi Real Estate Investment Schemes Law
المادة 15 من نظام المساهمات العقارية · الفصل الثالث: إدارة المساهمة العقارية
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.
Official text (Arabic)
This article has not been amended since the law was issued.
يفتح المرخص له حساب ضمان في أحد البنوك المرخص لها باسم المساهمة العقارية. وتضع الهيئة بالتنسيق مع البنك المركزي السعودي الضوابط اللازمة لحساب الضمان.
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 15 explained in plain English
Under Article 1, the escrow account is the bank account specific to the real estate investment scheme, and this article sets how it is opened and under what controls:
- Who opens it? The licensee.
- Where? At a licensed bank.
- In whose name? In the name of the real estate investment scheme itself, not in the name of the licensee or the manager.
- Under what controls? The controls are set by the General Authority for Real Estate in coordination with the Saudi Central Bank.
The fact that the account is in the name of the scheme itself ties it to the scheme and not to the person of the licensee. As for the details of the controls, such as how funds are withdrawn from the account or deposited in it, the article does not state them and refers them to what the Authority sets in coordination with the Central Bank.
This is linked to Article 14, which sets the licensee's obligations in supervising the scheme manager, and to Article 16, which assigns to the Capital Market Authority the regulation of issuing the real estate investment scheme certificate that proves a participant's ownership of their share.
A participant may check that the scheme has an escrow account in its name at a licensed bank. If there is doubt about the soundness of the management of a scheme's funds, you may consult a lawyer specialized in real estate matters.
Practical example
After a company in Riyadh obtained a real estate investment scheme license, it opened an escrow account at a licensed bank in the name of the scheme itself. When a participant asked where his money was, he was told it was in the scheme's escrow account and not in the company's account.
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 15 of the Saudi Real Estate Investment Schemes Law
Who opens the escrow account for a real estate investment scheme?
The licensee opens it at a licensed bank in the name of the real estate investment scheme.
Is the escrow account in the developer's name?
No, the article provides that it is opened in the name of the real estate investment scheme.
Who sets the controls for the escrow account?
The General Authority for Real Estate sets them in coordination with the Saudi Central Bank.
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 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 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.