Article 29 of the Saudi Real Estate Investment Schemes Law
المادة 29 من نظام المساهمات العقارية · الفصل الخامس: انقضاء المساهمة العقارية
The article lists the five cases in which a scheme ends and provides that it keeps its legal personality to the extent needed for liquidation, without prejudice to Article 17.
Official text (Arabic)
This article has not been amended since the law was issued.
دون إخلال بما نصت عليه المادة (السابعة عشرة) من النظام، تحتفظ المساهمة العقارية بالشخصية الاعتبارية بالقدر اللازم لتصفيتها، وتنقضي بإحدى الحالات الآتية:
1- بيعها وفقاً لأحكام النظام واللائحة.
2- انقضاء المدة المحددة لها ما لم تمدد وفقاً لأحكام النظام واللائحة.
3- استحالة تحقق الغرض الذي أسست من أجله.
4- إلغاؤها وفقاً لأحكام النظام واللائحة.
5- صدور حكم قضائي نهائي بتصفيتها.
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 29 explained in plain English
This article explains when a real estate investment scheme ends. A scheme ends in one of the following cases:
- Its sale in accordance with the provisions of the Law and the Implementing Regulations.
- Expiry of the term set for it, unless it is extended in accordance with the provisions of the Law and the Implementing Regulations.
- Impossibility of achieving the purpose for which it was established.
- Its cancellation in accordance with the provisions of the Law and the Implementing Regulations.
- A final court judgment ordering its liquidation.
The article sets out an important rule: the scheme keeps its legal personality to the extent needed for its liquidation. The ending of a scheme does not mean it disappears immediately in legal terms; it remains in existence within the limits of what the liquidation requires.
The article begins with the phrase "without prejudice to what Article 17 provides", which is the article providing that a scheme acquires legal personality when the Authority issues the license and is subject to the Law and the Implementing Regulations. The personality that arose with the license therefore continues after the scheme ends, to the extent needed for liquidation.
The first case is linked to Article 28, which sets out the methods of selling a scheme's assets. As for the case of the term, the article refers to the possibility of extension under the Law and the Implementing Regulations without stating its conditions, so the Implementing Regulations must be consulted.
If a shareholder believes their scheme has ended or should end, they would do well to consult a lawyer specializing in real estate cases to learn the effect on their rights.
Practical example
The term set for a real estate investment scheme in Riyadh expired without being extended in accordance with the Law and the Implementing Regulations, so the scheme ended. Even so, it kept its legal personality to the extent needed for its liquidation, until the liquidation work was completed.
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 29 of the Saudi Real Estate Investment Schemes Law
When does a real estate investment scheme end?
By its sale under the Law and the Implementing Regulations, expiry of its term unless extended, impossibility of achieving its purpose, its cancellation, or a final court judgment ordering its liquidation.
Does the scheme's legal personality end as soon as it ends?
No. The scheme keeps its legal personality to the extent needed for its liquidation.
Can the term of a real estate investment scheme be extended?
The article refers to the possibility of extension in accordance with the provisions of the Law and the Implementing Regulations.
Articles this article refers to
More articles on Selling Scheme Assets and Termination
- Article 27
The article prohibits selling a scheme's assets unless they have first been valued by accredited valuers under the Accredited Valuers Law and the Regulations' procedures, and makes any contrary act void.
لا يجوز بيع أصول المساهمة العقارية إلا بعد تقييم الأصول من مقيمين معتمدين وفقاً لنظام المقيمين المعتمدين، ووفقاً لما تحدده اللائحة من إجراءات. ويعد باطلاً أي تص
- Article 28
The article sets out the ways to sell a scheme's assets: public auction, direct sale of the whole scheme or part of it, or any other method that the Implementing Regulations specify.
يكون بيع أصول المساهمة العقارية بإحدى الطرق الآتية: 1- البيع بمزاد علني. 2- البيع المباشر لكامل أو لجزء من المساهمة العقارية. 3- أي طريقة أخرى تحددها اللائحة.
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.