Article 16 of the Saudi Real Estate Investment Schemes Law
المادة 16 من نظام المساهمات العقارية · الفصل الثالث: إدارة المساهمة العقارية
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
تقوم هيئة السوق المالية بتنظيم إصدار شهادة المساهمة العقارية التي تثبت تملك المساهم حصة في المساهمة العقارية.
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 16 explained in plain English
This article deals with the document proving ownership of a share, which is the real estate investment scheme certificate. It sets two provisions:
- This certificate proves the participant's ownership of a share in the real estate investment scheme.
- The Capital Market Authority is the body that regulates its issuance.
The article does not state the form of the certificate, its contents or the procedures for issuing it; these matters are left to the Capital Market Authority's regulation.
The certificate complements the register of participants, which Article 1 defines as a register in which the names of participants, their shares and any change in their ownership are entered. And the participant, under Article 1, is the one who owns an undivided share in the scheme. So the participant has two means of knowing and proving their ownership: their entry in the register, and the certificate proving their ownership.
This is also linked to Article 15, which requires the licensee to open an escrow account in the scheme's name, and to Article 17, which gives the scheme legal personality on the license being issued.
It is important for the participant to keep what proves their share. If a dispute arises about the ownership or number of a share, you may consult a lawyer specialized in real estate matters.
Practical example
Noura joined a real estate investment scheme to develop a residential plan in Buraidah, and wanted something proving her ownership of her share. The document that proves this is the real estate investment scheme certificate, whose issuance is regulated by the Capital Market Authority.
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 16 of the Saudi Real Estate Investment Schemes Law
What document proves ownership of a share in a real estate investment scheme?
The real estate investment scheme certificate proves the participant's ownership of a share in the scheme.
Who regulates issuing the real estate investment scheme certificate?
The Capital Market Authority regulates issuing this certificate.
Does the article set the procedures for issuing the certificate?
No, the article assigns the regulation of issuance to the Capital Market Authority without detailing the procedures.
More articles on Scheme Capital and Shares
- Article 6
The 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.
يحدد رأس مال المساهمة العقارية، الذي على أساسه يُحتسب عدد الحصص ومقدارها من خلال التكلفة التقديرية من قبل جهة تقييمية مرخصة، بعد موافقة الهيئة وهيئة السوق المال
- Article 7
The 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.
للهيئة اشتراط إضافة مبلغ احتياطي إلى رأس مال المساهمة العقارية بما لا يتجاوز (15%) من تكلفتها التقديرية، وذلك لمقابلة أي مصاريف إضافية غير متوقعة. ويكون التصرف
- Article 8
The 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.
يحق للمساهم الاشتراك في المساهمة العقارية، بحصة عينية أو نقدية. وتحدد اللائحة نوع الحصة العينية والشروط الواجب توافرها فيها.
- Article 9
The 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.
1- يقسم رأس مال المساهمة العقارية إلى حصص متساوية القيمة والحقوق، وتكون مسؤولية المساهمين في حدود ما يملكون من حصص في المساهمة العقارية. 2- تقوم هيئة السوق الما
- Article 10
The 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.
لا يجوز الإقراض من رأس مال المساهمة العقارية، ويجوز الاقتراض بضمان أموال أو أصول المساهمة العقارية على أن يتم تضمين اتفاقية المساهمة ذلك، وتحدد اللائحة الاشتراط
- 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
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.