Article 3 of the Saudi Real Estate Investment Schemes Law
المادة 3 من نظام المساهمات العقارية · الفصل الأول: تعريفات وأحكام عامة
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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 الترخيص وتعديله وإلغاؤه. وتحدد اللائحة الشروط والمتطلبات والإجراءات اللازمة لذلك.
2- تصنيف المساهمات العقارية بحسب الحجم أو النوع أو الموقع، ووضع الشروط والمتطلبات الملائمة والمدد الزمنية للمساهمة العقارية بحسب تصنيفها.
3- وضع شروط تأهيل وتصنيف المطورين العقاريين لغرض طرح المساهمات العقارية.
4- وضع شروط تأهيل وتصنيف ممارسي نشاط المساهمات العقارية.
5- وضع أسس تحدد استحقاقات المرخص له نظير أتعابه، وما يتقاضاه من عمولات.
6- الرقابة والإشراف على المساهمات العقارية.
وللهيئة الاستعانة بأي جهة حكومية أخرى أو بالقطاع الخاص؛ للقيام بأي مهمة مسندة إليها بموجب النظام أو اللائحة.
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 3 explained in plain English
This article identifies the body responsible for regulating real estate investment schemes, the General Authority for Real Estate, without prejudice to the jurisdiction of other government bodies and as the Law and the regulations specify. Its powers include in particular:
- Issuing, amending and cancelling the license, with the regulations setting the conditions, requirements and procedures.
- Classifying schemes by size, type or location, and setting the appropriate conditions, requirements and time periods for each classification.
- Setting the conditions for qualifying and classifying real estate developers for the purpose of offering schemes.
- Setting the conditions for qualifying and classifying practitioners of real estate investment scheme activity.
- Setting the bases of the licensee's entitlements in return for its fees and the commissions it receives.
- Oversight and supervision of real estate investment schemes.
The Authority may use any other government body or the private sector to carry out any task assigned to it under the Law or the regulations.
In practice, this article means that the licensee's fees and commissions are not left entirely to its free agreement; the Authority sets their bases, and the duration and conditions of a scheme may differ according to its classification. The details themselves are found in the regulations and the Authority's decisions, not in this article. Article 4 then ties the offering of any scheme to obtaining the Authority's license after the Capital Market Authority's approval. To learn the effect of these powers on a particular scheme, you may consult a lawyer specialized in real estate matters.
Practical example
A development company in Jeddah wants to offer a scheme to develop a commercial plan. Before it starts, it must check the qualification and classification conditions the General Authority for Real Estate has set for developers, and the classification its scheme will fall under and the conditions and periods tied to it, because this article makes these matters the Authority's powers.
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 3 of the Saudi Real Estate Investment Schemes Law
Who issues the license for a real estate investment scheme?
The General Authority for Real Estate issues, amends and cancels the license, and the regulations set its conditions, requirements and procedures.
Does the licensee set its commission as it likes?
The article provides that the Authority sets the bases that determine the licensee's entitlements in return for its fees and the commissions it receives.
On what basis are real estate investment schemes classified?
The Authority classifies them by size, type or location, and sets conditions, requirements and time periods for each classification.
Can the Authority use the private sector?
Yes, the Authority may use any other government body or the private sector to carry out any task assigned to it under the Law or 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 2
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.
يهدف النظام إلى تنظيم نشاط المساهمات العقارية، وإلى رفع مستوى الشفافية والإفصاح فيه، وإلى حماية حقوق جميع أطراف المساهمة العقارية.
- 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.