Article 2 of the Saudi Real Estate Investment Schemes Law
المادة 2 من نظام المساهمات العقارية · الفصل الأول: تعريفات وأحكام عامة
The 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.
Official text (Arabic)
This article has not been amended since the law was issued.
يهدف النظام إلى تنظيم نشاط المساهمات العقارية، وإلى رفع مستوى الشفافية والإفصاح فيه، وإلى حماية حقوق جميع أطراف 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 2 explained in plain English
This article sets out the purpose of the Law in three objectives:
- Regulating real estate investment scheme activity, that is, setting a clear framework for offering real estate projects in which a number of persons participate, managing them and ending them.
- Raising the level of transparency and disclosure, so that the participant knows what is happening in the scheme in which they have put their money.
- Protecting the rights of all parties to the real estate investment scheme; the protection is not limited to participants but covers all parties to the scheme.
This article does not itself create a specific obligation or penalty, but it helps in understanding and interpreting the other provisions; where the meaning of a provision of the Law is in doubt, these objectives are looked to for guidance. It is complemented by Article 3, which makes the General Authority for Real Estate the body that regulates this activity under the Law and the regulations, including issuing the license and overseeing and supervising schemes.
It is understood from the definitions in Article 1 that these objectives concern real estate investment schemes in the sense of the Law, that is, joint real estate development projects, not real estate investment funds. Anyone with a dispute or inquiry about a particular scheme is best advised to consult a lawyer specialized in real estate matters.
Practical example
Ahmed joined a real estate investment scheme to develop residential land in Qassim, and wanted to understand why the licensee is bound by so many regulatory procedures. When he read Article 2 he learned that the Law aims to regulate this activity, raise transparency and disclosure and protect the rights of the parties to the scheme, including participants like him.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentReal Estate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Real Estate Law lawyers
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 2 of the Saudi Real Estate Investment Schemes Law
What are the objectives of the Real Estate Investment Schemes Law?
Regulating real estate investment scheme activity, raising its level of transparency and disclosure, and protecting the rights of all parties to the scheme.
Does the Law protect only participants?
The article provides for protecting the rights of all parties to the scheme, so the protection is not limited to participants.
Which body regulates real estate investment scheme activity?
Under Article 3, the General Authority for Real Estate regulates the activity under the Law and the regulations.
More articles on Definitions and Powers of the Real Estate Authority
- Article 1
The article defines the Law's key terms, such as real estate investment scheme, participant, licensee, scheme manager, escrow account and register of participants.
لغرض تطبيق هذا النظام، يقصد بالعبارات والألفاظ الآتية -أينما وردت فيه- المعاني المبينة أمام كل منها، ما لم يقتض السياق غير ذلك: النظام: نظام المساهمات العقارية.
- Article 3
The 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.
دون إخلال باختصاصات الجهات الحكومية الأخرى، تتولى الهيئة تنظيم نشاط المساهمات العقارية وفقاً لما يحدده النظام واللائحة، ولها على وجه خاص ما يأتي: 1- إصدار الترخ
- Article 36
The 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.
دون إخلال باختصاصات الهيئة، تنظم هيئة السوق المالية بالاتفاق مع الهيئة ما يتعلق بجمع الأموال لغرض طرح المساهمة العقارية.
- Article 37
The 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.
يصدر المجلس اللائحة بالاتفاق مع هيئة السوق المالية، وذلك خلال (مائة وعشرين) يوماً من تاريخ صدور النظام، ويعمل بها من تاريخ العمل به.
- Article 38
The 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.
ينشر النظام في الجريدة الرسمية، ويعمل به بعد (مائة وعشرين) يوماً من تاريخ نشره، ويلغي كل ما يتعارض معه من أحكام.
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.