Article 20 of the Saudi Real Estate Investment Schemes Law
المادة 20 من نظام المساهمات العقارية · الفصل الثالث: إدارة المساهمة العقارية
The article allows the licensee, the Authority and the assembly to remove the scheme manager, in accordance with the Implementing Regulations, if the manager abuses their powers or fails to perform their obligations, without prejudice to any penalty.
Official text (Arabic)
This article has not been amended since the law was issued.
يحق للمرخص له وللهيئة وللجمعية عزل مدير المساهمة العقارية وفق ما تحدده اللائحة في حال إساءته استخدام صلاحياته أو إخلاله بتنفيذ التزاماته، ولا يخل ذلك بأي عقوبة قد تفرض عليه جراء ذلك.
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 20 explained in plain English
This article deals with the removal of the scheme manager and answers three questions:
1- Who may remove the manager? Three parties:
- The licensee.
- The Real Estate General Authority.
- The assembly, meaning the shareholders' assembly.
2- When may the manager be removed? In two cases:
- The manager abuses their powers.
- The manager fails to perform their obligations.
3- How is it done? As determined by the Implementing Regulations; the procedures are left to them.
The article adds that removal does not prejudice any penalty that may be imposed on the manager as a result, meaning that removal does not relieve the manager of accountability.
The importance of this provision for shareholders is that it gives their assembly a direct means of protecting their interests, without depending entirely on the licensee who appointed the manager under Article 19. Article 21 then prohibits the licensee and the manager from taking any decision or action involving an existing or potential conflict of interest.
Before seeking to remove a manager, shareholders would do well to check the procedures in the Implementing Regulations and that one of the two cases exists, and to consult a lawyer specializing in real estate cases.
Practical example
Shareholders in a real estate investment scheme in Jazan noticed that the manager had entered into contracts beyond the manager's powers. They called a meeting of the assembly to consider removing the manager as determined by the Implementing Regulations, bearing in mind that removal does not prevent any penalty due from being imposed.
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 20 of the Saudi Real Estate Investment Schemes Law
Who may remove the manager of a real estate investment scheme?
The licensee, the Real Estate General Authority and the shareholders' assembly.
When may the scheme manager be removed?
When the manager abuses their powers or fails to perform their obligations, as determined by the Implementing Regulations.
Does removal relieve the manager of penalties?
No. The article provides that removal does not prejudice any penalty that may be imposed on the manager as a result.
More articles on Real Estate Scheme Manager
- 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 19
The article provides that a real estate investment scheme is run by a scheme manager appointed by the licensee, and refers the manager's conditions, requirements, powers, duties and responsibilities to the Implementing Regulations.
يدير المساهمة العقارية مدير المساهمة العقارية الذي يُعيّنه المرخص له. وتحدد اللائحة اشتراطات ومتطلبات مدير المساهمة العقارية وصلاحياته ومهماته ومسؤولياته.
- Article 21
The article prohibits the licensee and the scheme manager from taking any decision or action involving an existing or potential conflict of interest, without prejudice to Article 14, and refers the handling of such cases to the Implementing Regulations.
دون إخلال بما نصت عليه المادة (الرابعة عشرة) من النظام، لا يجوز للمرخص له ولا لمدير المساهمة العقارية اتخاذ أي قرار أو إجراء إذا كان هناك تعارض مصالح قائم أو مح
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.