Article 35 of the Saudi Real Estate Investment Schemes Law
المادة 35 من نظام المساهمات العقارية · الفصل السادس: المخالفات والعقوبات
The article punishes with imprisonment for up to three years anyone who violates Articles 4, 21, 27 and 30, with referral to the Public Prosecution for investigation and prosecution before the competent court.
Official text (Arabic)
This article has not been amended since the law was issued.
دون إخلال بأي عقوبة منصوص عليها في أي نظام آخر، يعاقب بالسجن مدة لا تزيد على (ثلاث) سنوات، كل من يخالف أيًّا من أحكام المواد الآتية: (الرابعة)، و(الحادية والعشرون)، و(السابعة والعشرون)، و(الثلاثون)، من النظام، وتحال إلى النيابة العامة؛ للتحقيق فيها، والادعاء فيها أمام المحكمة المختصة.
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 35 explained in plain English
This article sets a criminal penalty for violating specific articles of the Law, summarized as follows:
- The penalty: imprisonment for a period not exceeding 3 years.
- Who is covered? Anyone who violates any of the provisions of Articles 4, 21, 27 and 30 of the Law.
- The procedure: the violation is referred to the Public Prosecution for investigation and for prosecution before the competent court.
The text uses the words "anyone who violates", so it does not limit the penalty to a particular category of person; what matters is the violation of the provisions of those articles. The provisions of those articles are to be read in their own texts.
The article begins with the phrase "without prejudice to any penalty provided for in any other law", so the imprisonment penalty here does not prevent the penalties of other laws from being applied if they apply.
The path for this penalty differs from the path of the committee's decisions: Article 34 allows a grievance against the decision of the committee provided for in Article 33 before the Administrative Court within 60 days of notification, whereas the imprisonment penalty goes through investigation by the Public Prosecution and then prosecution before the competent court.
Article 36 then provides that the Capital Market Authority regulates, in agreement with the Authority, matters relating to raising funds for the purpose of offering a real estate investment scheme, without prejudice to the Authority's powers.
Anyone facing an investigation or an accusation under this article needs a lawyer specializing in criminal cases without delay.
Practical example
It emerged that a person in Jeddah had violated one of the provisions in the articles listed by Article 35. The violation was referred to the Public Prosecution for investigation, and the Public Prosecution then prosecuted before the competent court; the penalty that may be imposed is imprisonment for a period not exceeding three years.
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 35 of the Saudi Real Estate Investment Schemes Law
Does the Real Estate Investment Schemes Law include an imprisonment penalty?
Yes. Anyone who violates any of the provisions of Articles 4, 21, 27 and 30 is punished by imprisonment for a period not exceeding 3 years.
Who investigates these violations?
They are referred to the Public Prosecution for investigation and for prosecution before the competent court.
Does this penalty prevent the penalties of other laws from being applied?
No. The article provides that it is without prejudice to any penalty provided for in any other law.
Articles this article refers to
- Article 4
The article prohibits offering, advertising, marketing or raising funds for a real estate investment scheme until the Capital Market Authority approves and the Authority issues a license, after verifying the property's title deed and development approvals.
لا يجوز طرح المساهمة العقارية ولا الإعلان عنها ولا تسويقها ولا جمع الأموال لها إلا بعد موافقة هيئة السوق المالية والحصول على ترخيص من الهيئة -وفقاً لأحكام النظا
- 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
- 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 30
The article requires all financial proceeds relating to a real estate investment scheme to be deposited directly in the escrow account.
يجب أن تودع جميع العوائد المالية المتعلقة بالمساهمة العقارية مباشرة في حساب الضمان.
More articles on Scheme Violations and Penalties
- Article 31
The article assigns the detection of violations of the Law or the Regulations to employees of the Authority or of bodies it uses, and lets them enter sites and the licensee's premises, seize documents and call on security bodies.
يتولى ضبط ما يقع من مخالفات لأحكام النظام أو اللائحة موظفون من الهيئة ومن أي جهة أخرى ترى الهيئة الاستعانة بموظفيها، يصدر بتعيينهم قرار من الرئيس بعد موافقة جها
- Article 32
The article punishes violations of the Law or the Regulations with a warning, license suspension of up to one year, license cancellation, a fine of up to SAR 10,000,000, or a ban from scheme work of up to 10 years.
دون إخلال بما نصت عليه المادة (الخامسة والثلاثون) من النظام، يعاقب كل من يخالف أيًّا من أحكام النظام أو اللائحة بواحدة أو أكثر من العقوبات الآتية: 1- الإنذار. 2
- Article 33
The article provides for one or more committees formed by the head of the Authority, of at least three members including a Sharia or legal adviser, to consider violations and impose the Article 32 penalties.
تُكوّن بقرار من رئيس الهيئة لجنة أو أكثر لا يقل عدد أعضائها عن ثلاثة ويسمى أحدهم رئيساً، ويكون من بينهم مستشار شرعي أو نظامي؛ تتولى النظر في المخالفات وإيقاع ال
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.