Article 5 of the Saudi Real Estate Unit Ownership, Division and Management Law
المادة 5 من نظام ملكية الوحدات العقارية وفرزها وإدارتها · الفصل الثالث: أحكام الملكية
The article requires the partnership contract for building shared property to include the partners' details, the land, the deed, and their rights and obligations, and lets partners divide their shares into divided units, with recourse to the court in case of dispute.
Official text (Arabic)
This article has not been amended since the law was issued.
1- على الشركاء عند بناء عقار مشترك تضمين عقد الشراكة أسماء أصحاب الحصص العينية وأصحاب الحصص النقدية، وأوصاف الأرض المعدة للبناء، ورقم صك الملكية وتاريخه ومصدره، والتزامات الشركاء وحقوقهم.
2- للشركاء في عقار مشترك أن يتقاسموا حصصهم المشاعة فيه، ويختص كل منهم بوحدة عقارية مفرزة أو أكثر، فإن لم يتفقوا على القسمة فلطالبها اللجوء إلى 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 5 explained in plain English
This article governs a common situation: more than one person partnering to build a building, for example where one contributes the land and another contributes money. It contains two provisions:
- Details required in the partnership contract: When partners build shared property, the partnership contract must include:
- The names of the holders of in-kind shares (such as the person who contributed the land) and the holders of cash shares (such as the person who contributed the money).
- The descriptions of the land designated for building.
- The number, date and source of the ownership deed.
- The partners' obligations and rights.
- Dividing undivided shares: The partners may divide their undivided shares in the property, so that each of them takes one or more divided units. If they do not agree on the division, the person requesting it may resort to the competent court.
An undivided share means that each partner owns a percentage of the entire property without a specific part being designated; division converts this percentage into specific units that each partner owns independently, which he can then dispose of on its own.
Article 4 clarifies that approving division and re-division is the responsibility of the General Authority for Real Estate, and that the Regulations set its procedures. Because the partnership contract sets the rights of each party, it is advisable to draft it carefully with the help of a lawyer specialized in real estate matters.
Practical example
Saad, who owns land in Dammam, agreed with Fahd that Fahd would finance building a 6-apartment building. Their contract must include the name of Saad as holder of the in-kind share and Fahd as holder of the cash share, the descriptions of the land and the number, date and source of its deed, and the rights and obligations of each. After construction they can divide the apartments between them, and if they disagree, the person requesting the division may resort to the competent court.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentA question about Article 5 of Real Estate Unit Ownership, Division and Management Law?
Describe what happened and specialist lawyers answer. You can write in English.
- Completely free
- Lawyers from the directory answer
- Your name stays hidden
Commercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
شركة امتداد النظام للمحاماة والاستشارات المهنية
- Labour & Employment Law
- Criminal Law
- Criminal Law
- Commercial & Corporate Law
Frequently asked questions about Article 5 of the Saudi Real Estate Unit Ownership, Division and Management Law
What details must a contract for a partnership to build a building include?
The names of the holders of in-kind and cash shares, the descriptions of the land, the number, date and source of the ownership deed, and the partners' obligations and rights.
What can I do if my partner refuses to divide the apartments?
If the partners do not agree on the division, the person requesting it may resort to the competent court.
Can each partner take specific apartments?
Yes. The partners may divide their undivided shares so that each takes one or more divided real estate units.
More articles on Dividing Real Estate into Units
- Article 1
The article defines the Law's basic terms, such as division, the divided real estate unit, common parts, the shared property, the real estate complex, the owners' association, the manager and maintenance.
يقصد بالكلمات والعبارات الآتية - أينما وردت في هذا النظام - المعاني المبينة أمام كل منها، ما لم يقتض السياق غير ذلك: النظام: نظام ملكية الوحدات العقارية وفرزها
- Article 2
The article allows a landowner holding a compliant deed to build on it and divide the building into independent units with a deed for each, and requires the units to be numbered sequentially without repetition.
1- لكل مالك أرض بصك مستوفٍ للمتطلبات الشرعية والنظامية أن يبني عليها بناءً ويفرزه إلى وحدات مستقلة، وله إصدار صك ملكية لكل وحدة عقارية مفرزة، وذلك بحسب الإجراءا
- Article 3
The article allows re-dividing the shared property or changing its use with the approval of the general assembly and any mortgagee, with the plan amended, and sets owners' shares in what results from the change.
1- يجوز إعادة فرز العقار المشترك أو جزء منه أو تغيير استعمالاته؛ بعد موافقة الجمعية العامة، وموافقة المرتهن إن وجد. ولا يخل ذلك بحق المتضرر في اللجوء إلى المحكم
- Article 4
The article makes the General Authority for Real Estate responsible for approving division and re-division, leaves the procedures to the Regulations, and lets the Authority assign some of its activities to the private sector.
تعتمد الهيئة الفرز وإعادة الفرز، وتحدد اللائحة الإجراءات اللازمة لذلك، وللهيئة إسناد بعض أنشطتها في هذا الخصوص إلى القطاع الخاص.
- Article 31
The article provides that the Authority's board of directors proposes the Implementing Regulations and that they are issued by decision of the Minister of Housing within 180 days of the Law's issuance.
يقترح مجلس إدارة الهيئة اللائحة وتصدر بقرار من وزير الإسكان خلال (مائة وثمانين) يوماً من تاريخ صدور النظام.
- Article 32
The article provides that this Law replaces the Real Estate Unit Ownership and Division Law issued by Royal Decree No. M/5 dated 11/2/1423 AH, and repeals any provisions that conflict with it.
يحل النظام محل نظام ملكية الوحدات العقارية وفرزها، الصادر بالمرسوم الملكي رقم (م / 5) والتاريخ 11 / 2 / 1423هـــ، 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.