Legislation & Regulations

Amlak publishes the text of the real estate auctions regulation

Public Authority for Real Estate - Off-plan Selling
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Amlak Real Estate

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The Umm Al-Qura Gazette revealed the terms of the real estate auctions regulation, which contains 12 articles including licensing provisions, licensee obligations, the electronic platform, the request to hold a real estate auction, and the conditions for holding it, to be effective from the date of its publication.

According to the Umm Al-Qura Gazette on its website, the regulation will be implemented from the date of its publication. According to the The Official Gazette, the provisions of this regulation apply to all real estate auctions in the Kingdom, including judicial real estate auctions and the like to the extent that no special provision is made to regulate them.

According to what was published by The Official Gazette on its website, this regulation applies to all real estate auctions in the Kingdom.

The text of the Real Estate Auctions Regulation is as follows:

Article One:
1- The words and terms mentioned in this regulation shall have the meanings indicated in front of each of them in Article (I) of the Real Estate Brokerage Law, issued by Royal Decree No. (M/130) on 30/11/1443 AH, and its executive regulations unless the context otherwise requires.
2- The following words and terms, wherever used in these regulations, shall have the meanings indicated in front of each of them, unless the context requires otherwise:
Real Estate Auction: The public bidding on a property in order to sell it, sell its benefit or lease it to maximize its price, including electronic auctions.
Owner: A natural or legal person who owns the asset or benefit or their legal representative, who contracts with the real estate broker to hold the real estate auction.
Certified appraiser: A person licensed to practice the profession of real estate valuation in accordance with the Certified Valuers Law.
Licensee: A legal person licensed to practice real estate auction service.
Real Estate Auction Manager: A qualified natural person affiliated with the licensed establishment, authorized to manage all the real estate auction business for the licensee.
License Provisions
Article II:
In addition to the requirements set forth in the Executive Regulations of the Real Estate Brokerage System, a license to practice the real estate auction service is required for establishments that provide it through electronic means as follows:
1- Linking the licensee's electronic real estate auction platform to the Authority's electronic platform.
2- Undertake to ensure the integrity of the operations carried out in the licensee's platform, and stop or re-auction the real estate auction in deals that are marred by technical errors or irregularities, in order to protect the competitiveness of supply and demand.
3- Undertaking to publish all the data of real estate auctions held on the licensee's platform on the Authority's electronic platform.
4- Obtaining all statutory licenses necessary to practice the activity, from the relevant authorities.
5- Linking the electronic platform with the national access platform, and beneficiaries access the electronic medium through it.

Obligations of the licensee

Article Three:

A licensee to conduct real estate auctions shall comply with the following:
1- Demonstrate integrity and sincerity, deal impartially and fairly, and not affect fair competition in any way.
2- Exercise professional diligence with care and sincerity to achieve the best prices.
3- Save all real estate auction bulletins and records, and record the proceedings of the visual auctions, documents and data of all his transactions for (five) years from the date of the end of the real estate auction.
4- Holding the real estate auction during the validity period of the brokerage contract.
5- Obtaining the necessary approvals from the competent authorities in holding the real estate auction.
6- Practicing the service by qualified individuals affiliated with the licensee and registered with the Authority.
7- Compliance with the regulations and instructions of the competent authorities in the practice of real estate auctions.
8- Announcing the bulletin of the real estate auction a minimum of five days before the date of holding it.
Article Four:
<In addition to the provisions of the brokerage contract stipulated in the Law and the Executive Regulations, the licensee shall include the following information:
1- The method of holding the real estate auction.
2- The date of holding the real estate auction and its duration - if any -.
3- The type of disposition of the property subject to the real estate auction.
4- The minimum acceptable award value for the disposal of the property after the auction.
5- The minimum starting value of the real estate auction.
6- The bid entry amount, if any, provided that the amount does not exceed (5%) percent of the estimated value of the property based on an evaluation by a certified appraiser, and specifying the type of amount (deposit - down payment - refundable insurance).
5- The minimum starting value of the real estate auction.
6- The minimum amount of the real estate auction.
7- The time limit for awarding the highest price after bidding and the possibility of extending it for a similar period once.
8- Mechanisms and durations for receiving and delivering the price after the award.
9- Provisions related to the disposal of the property such as the right of intercession, council option, conditional option, sale of the deposit, etc.
8- Mechanisms and periods for the receipt and delivery of the price after the award.

Electronic Platform

Article V:

A real estate auction registry shall be established in the electronic platform of the Authority, in which the following shall be recorded:
a- Licensees" data record.
b- Data of all real estate auctions organized by licensees, whether online or offline.
c- Publish all statistical indicators of auctions periodically.
d- Request to hold auctions.
d- Request to hold a real estate auction.

Article Six:

The licensee shall apply to the Authority to hold the real estate auction in the electronic platform of the Authority, and fill out the approved form - at least fifteen days before holding it - with the following data and requirements:
1- Determine the place and method of holding the real estate auction.
2- The date and duration of the real estate auction.
3- Identify the affiliated real estate auction manager.
4- The type of disposition of the property subject to the real estate auction.
5- Mechanisms for safeguarding the funds of the competitors in the real estate auction.
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6- The bidding and award mechanisms contained in paragraphs (5-9) of Article 4 of the Regulations.
7- Registration of real estate auction property data, including the following:
A- Data of the owner of the property or the owner of the benefit.
b- Spatial and location data, property specifications, and condition of the property.
c- Determination of the ownership of the property on the asset or benefit, joint, common or otherwise.
d- Disclose the in rem rights associated with the property.
e- Existing disputes regarding the property - if any-.
f. Mortgage or restriction affecting the utilization of the property - if any -.
g- Rights and obligations on the property that are not documented in the real estate document - if any -.
h- Services related to the property - if any-.
i - Information that may affect the value of the property - if any -.

Article VII:

1- The Authority shall study the request to hold a real estate auction within a period not exceeding (five) working days from the completion of the request, and the Authority may, if it needs any additional data or documents it deems necessary, notify the applicant and he must complete the necessary within a period not exceeding (five) working days from the date of informing him, otherwise the request shall be considered rejected.
1- The Authority shall notify the applicant and he must complete what is necessary within a period not exceeding (five) working days from the date of informing him of this.
2- The Authority shall issue the approval or reject the real estate auction, stating the reasons for the rejection and informing the applicant thereof.
The provisions of holding a real estate auction

Article Eight:

The licensee must include the (real estate auction prospectus) on the electronic platform before publishing it to the public, including:
1- Specifying the place, method and time of holding the real estate auction.
2- Property cadastral and location data, property specifications, and property condition.
3- Determine the type of disposal of the property subject to the real estate auction.
4- Disclose the in rem rights associated with the property.
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5- Existing disputes regarding the property - if any -.
4- Disclosure of in rem rights associated with the property.
6. Mortgage or restriction affecting the utilization of the property - if any -.
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7- Rights and obligations on the property that are not documented in the real estate document - if any -.
8- Services related to the property - if any-.
9- Information that may affect the value of the property - if any -.
10- Link to live video streaming of the auctions - if any-.
9- Information that may affect the value of the property - if any-.
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11- The data mentioned in paragraph (6) of Article (6) of this regulation.

Article Nine:

1- The real estate auction manager shall manage the price bidding between the competitors, and the real estate auction shall start according to the starting value of the real estate auction specified in the brokerage contract, and the auction may start without that value if the owner - or his legal representative - agrees to this in writing.
2- If one of the competitors submits the highest bid and no one bids for it, within the time limit specified in the mediation contract, the real estate auction manager may extend it for a similar period once.
3- If the real estate auction does not reach the agreed value to accept the sale in the mediation contract, it will be dealt with in one of the following cases:
A- The owner - or his legal representative - acknowledges in writing to accept the award and dispose of the property at the price reached by the bidding.
b- Terminate the bidding if the owner - or his legal representative - does not acknowledge the award and make a record of it.
4- The real estate auction shall be awarded to the competitor who submitted the highest bid and no one bids for it, and the specified period for bidding has expired, according to the following cases:
A- The bid reaches or exceeds the value set for accepting the award and disposing of the property stipulated in the brokerage contract.
b- The bid does not reach the value specified for the acceptance of the award and disposal of the property stipulated in the mediation contract, and the owner - or his legal representative - acknowledges in writing the acceptance of the award and disposal of the property, in accordance with paragraph (3a) of this Article.
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5- The procedures for disposing of the property and reserving the amount of the deposit shall be completed according to the period specified for the receipt and delivery of the price in the brokerage contract.
Article Ten:
1- The licensee must close the real estate auction in the electronic platform of the Authority after the completion of its holding within a period not exceeding (five) working days.
2- The licensee shall return all monetary amounts to the competitors received by him in the real estate auction - except for those who won the real estate auction - within a period not exceeding (three) working days from the date of completion of its holding.

Final Provisions in the Real Estate Auction Regulations

Article XI:

The provisions of this regulation shall apply to all real estate auctions in the Kingdom, including judicial real estate auctions and the like to the extent that no special provision is made to regulate them.

Article Twelve:

These Regulations shall be published in the Official Gazette and shall enter into force from the date of publication.

Real Estate Auction Regulations

Newly published

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