Real Estate Regulations in the Kingdom: Moving Forward
The Implementation of the Real Estate Brokerage System Is One of the World’s Most Notable Digitalization Initiatives
Reported by: Abdullah Al-Salih
The official spokesperson for the General Real Estate Authority, Mr. Tayseer Al-Mufarraj, confirmed that the implementation of the real estate brokerage system was gradual, explaining that monitoring efforts have increased approximately three months after the system’s implementation—a period sufficient for stakeholders to understand and adapt to the relevant regulations. He confirmed that the Authority had summoned a number of real estate brokerage entities and individuals as a result of certain violations detected under the system, This came during a panel discussion titled “The Future of Real Estate with Modern Real Estate Regulations,” organized by the “Nazl” real estate platform on Saturday, October 14, 2023, and moderated by Mr. Al-Aboudi bin Abdullah.
13 real estate regulations
Al-Mufarraj explained that the Authority has enacted 13 real estate laws, including regulations, bylaws, and rules, and noted that there will be regulations related to marketing and media, as well as regulations for property management—regulatory provisions aimed at organizing the market and elevating it to its rightful status. He explained that the regulations go through several stages: the first stage involves proposing and approving the regulations, followed by the enactment of legislation and laws and their monitoring until they are approved for publication and implementation; the third stage involves implementation, accountability, and follow-up, as well as periodic, thorough review of all feedback from stakeholders and specialists in the real estate sector; and finally, sharing this experience with the world.
3 Electronic Contracts for Real Estate Brokerage
Regarding digital advancements in real estate regulations, Aban Al-Mufarrij noted that the COVID-19 pandemic helped drive the digital transformation of many government sectors; this was reflected in the implementation of the new real estate brokerage system, which is considered one of the most prominent examples of digital transformation worldwide, as the system facilitates the use of three types of contracts: the broker’s contract with the buyer or tenant, the broker’s contract with another broker, and the broker’s contract with the owner, Work is underway to implement all provisions of the system by making all contracts available soon on the Authority’s website. He emphasized that those who fail to keep pace with the digital transformation of the real estate sector in all its aspects will miss out on many investment opportunities.
Feasibility Study for Real Estate Contributions
Regarding the real estate contributions system overseen by the Authority and the Capital Market Authority, Al-Mufarraj said: “This system was established to ensure the protection of rights by requiring the submission of a feasibility study and financial statements for real estate contributions prior to the approval of a license, and to safeguard these rights, the system mandates the establishment of an escrow account to ensure that all funds collected for the contribution are subject to oversight and are attractive and secure for both the investment and the investors.”
Service Updates
There will be updates to certain services related to the real estate market, in an effort to meet the expectations of those working in the sector and its beneficiaries, including: The ability to add additional clauses to registered agreements between contracting parties, as well as the option to upload property documents to the Authority’s website.
Highlights of the Implementation of the Real Property Registration System
- The results of the first phase of the Al-Falah neighborhood pilot were positive and surprising, with the entire neighborhood registered in the system.
- For the first time in the Kingdom, we have a precise technical map of the Al-Falah neighborhood, and we aspire to implement it in all neighborhoods of Riyadh.
- The second phase covers seven neighborhoods in Riyadh.
- We plan to cover all parts of the Kingdom over the next five years.
Key Points on Real Estate Regulations
– Repeated violations by some brokers have led to the revocation of their licenses.
– Real estate brokers play a role in curbing the phenomenon of front companies in the market by reporting any violations they encounter.
– The number of real estate platforms licensed by the Authority has reached twenty, and the number is growing.
– Regulations are currently under review to govern the following areas: real estate consulting and real estate auctions.
– We value everyone’s awareness, efforts, and conduct in the real estate market in accordance with established regulations and legislation.
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