Article 30 of the Saudi Real Estate Investment Schemes Law
المادة 30 من نظام المساهمات العقارية · الفصل الخامس: انقضاء المساهمة العقارية
The article requires all financial proceeds relating to a real estate investment scheme to be deposited directly in the escrow account.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب أن تودع جميع العوائد المالية المتعلقة بالمساهمة العقارية مباشرة في حساب الضمان.
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 30 explained in plain English
This article sets a clear rule for the path of the scheme's money: all financial proceeds relating to the real estate investment scheme must be deposited directly in the escrow account.
The rule has three elements:
- Scope: the words "all proceeds" cover every financial proceed relating to the scheme, with no exception in the text.
- Directness: the deposit is made "directly", so the proceeds do not pass through an intermediate account such as the licensee's or the manager's account.
- Destination: the escrow account, which under Article 1 is the bank account dedicated to the real estate investment scheme.
This rule matters greatly to shareholders; it ensures that money generated by the scheme, such as the proceeds of selling its assets, goes to the account dedicated to it, which limits its mixing with other funds and makes it easier to trace.
This article is linked to Article 29, which makes the sale of the scheme in accordance with the Law and the Implementing Regulations one of the cases in which it ends, so the proceeds of that sale are among the proceeds relating to the scheme. It is also linked to Article 31, which makes the detection of violations of the Law or the Implementing Regulations a task for employees of the Authority and of any other body whose employees the Authority uses.
If a shareholder learns that their scheme's proceeds were deposited anywhere other than the escrow account, they can consult a lawyer specializing in real estate cases.
Practical example
Plots of land from a real estate investment scheme in Khobar were sold, and the buyer asked to transfer the price to the licensed company's account. But Article 30 requires all financial proceeds relating to the scheme to be deposited directly in the escrow account, so the price must be transferred to it.
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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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 30 of the Saudi Real Estate Investment Schemes Law
Where are a real estate investment scheme's proceeds deposited?
All financial proceeds relating to the scheme must be deposited directly in the escrow account.
May the scheme's proceeds be deposited in the developer's account and then transferred?
The article requires that the deposit be made directly in the escrow account.
What is the escrow account?
Under Article 1, it is the bank account dedicated to the real estate investment scheme.
More articles on Obligations of the Licensee
- Article 5
The article requires the licensee to be qualified and classified by the Authority to carry on real estate investment scheme activity, as the regulations specify.
يجب أن يكون المرخص له مؤهلاً ومصنفاً من الهيئة لممارسة نشاط المساهمات العقارية وفقاً لما تحدده اللائحة.
- 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
- Article 12
The article requires the licensee's percentage in the scheme to be no less than the regulations specify and held until the scheme ends, and allows other participants to dispose of their shares under the regulations' conditions.
1- يجب ألا تقل نسبة المرخص له في المساهمة العقارية عن النسبة التي تحددها اللائحة، وأن يحتفظ لنفسه بملكية هذه النسبة حتى انقضاء المساهمة العقارية. 2- يجوز لبقية
- Article 13
The article makes the licensee responsible for everything connected with the scheme toward the participant, the Authority, the Capital Market Authority, relevant government bodies and third parties, and refers the licensee's powers and limits of responsibility to the regulations.
يكون المرخص له هو المسؤول عن جميع ما يتعلق بالمساهمة العقارية تجاه المساهم والهيئة وهيئة السوق المالية وأي من الجهات الحكومية ذات العلاقة والغير. وتحدد اللائحة
- 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 15
The article requires the licensee to open an escrow account in the scheme's name at a licensed bank, with controls set by the Authority in coordination with the Saudi Central Bank.
يفتح المرخص له حساب ضمان في أحد البنوك المرخص لها باسم المساهمة العقارية. وتضع الهيئة بالتنسيق مع البنك المركزي السعودي الضوابط اللازمة لحساب الضمان.
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.