The official gazette “Umm Al-Qura” announced the rules regulating real estate brokers qualified to market small and medium-sized off-plan projects.
4 clear objectives
These rules aim to establish requirements for registering qualified real estate brokers to market off-plan small and medium-sized projects in the registry, to encourage real estate brokers to actively engage in the marketing of small and medium-sized real estate, to regulate real estate practices for marketing small and medium-sized projects before their completion, and to involve the private sector in the awareness-raising role regarding off-plan real estate projects.
Requirements for a "real estate broker"
According to the new system, the real estate broker submits a license application to be registered in the real estate brokers register after paying the financial fee according to the form prepared for this purpose to the Off-Plan Sales or Leasing Committee “Wafi”, either in paper or electronically, attaching a copy of the valid commercial registration, a copy of the ownership certificate of the brokerage premises or its lease contract, and a certificate of passing the qualification program.
The real estate broker must renew his registration in the register before the license expires by a period of no less than 15 days. If 30 days have passed since the license expires and it has not been renewed, the application will be treated as a new registration application. It is also required before advertising or marketing any small and medium-sized off-plan real estate project to ensure that several requirements are met, most notably a copy of the electronic deed of ownership of the project property, obtaining prior written approval from the landowner, and submitting the regulatory licenses and approved engineering and architectural designs from the competent authorities approving the establishment of the project. The building area must not exceed 10,000 square meters unless he has obtained a license to sell or market off-plan.
Project data registration
The real estate broker is obligated to register all data of the announced projects on an electronic platform, while keeping in his own record all the transactions that were conducted through him, as well as the documents and papers related to them, and to provide “Wafi” on a quarterly basis, and not to dispose of the funds that he receives from buyers or tenants for purposes other than those for which they were allocated, and he must pay them or deliver them in accordance with what was stipulated for him.
Among the obligations of the intermediary is that he should not place himself as a second party in the contract that he mediated to conclude unless the contracting party authorizes him to do so, and in this case he is not entitled to a commission, and that he should be responsible for any losses or damages incurred by any of the contracting parties as a result of fraudulent or deceptive mediation or without regard to the principles that should be followed, in addition to educating buyers about the provisions of off-plan sales or purchases and explaining their rights and obligations, which are necessary to remove ignorance from them, and not marketing small and medium real estate projects off-plan when the license expires.
Penalties for violators
The new project grants the committee the authority to impose any penalties on the real estate broker who violates any provision of these rules or decisions issued thereunder, starting with a written warning, then suspending registration in the register with a grace period not exceeding 6 months, until the penalties reach the cancellation of the broker’s registration and not registering him in the register for a period not exceeding 5 years.
The Off-Plan Sales and Leasing Committee (Wafi) seeks to create a stimulating regulatory environment for real estate within which the private sector operates, through a series of real estate legislations regulating the real estate market that ensure the development of real estate regulations for projects, in a way that supports and strengthens the bonds of trust, honesty and transparency between the parties of the equation in the real estate market, and within a framework that achieves a convergence of interests and protects rights, while keeping pace with emerging challenges.
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