The Umm Al-Qura newspaper published in its issue issued yesterday, Friday. According to the system, the provisions of the system apply to the activity of selling and leasing real estate projects on the map, in which payments are received from buyers, tenants, or financiers of the real estate project, and the activity of selling and leasing real estate projects belonging to government agencies on the map in accordance with their nature and within the limits contained in the regulations.
According to the system, the provisions of the system apply to the activity of selling and leasing real estate projects on the map in accordance with their nature and within the limits contained in the regulations. The law stressed that no real estate developer has the right to engage in the activity of selling and leasing off-plan real estate projects unless he is registered in the developers" registration register, and it is not entitled to advertise them in the local or foreign media, nor to hold exhibitions and invite them; unless the real estate project is licensed by the competent authority; in accordance with the provisions of the law and the regulation.
The Sale and Leasing of Real Estate Projects on the Map also obliges the real estate developer wishing to sell or lease real estate projects on the map - after registering his name in the register of developers - to submit an application to the competent authority to obtain the special license for the real estate project by pledging to start construction work on the real estate project within 6 months from the date of obtaining the license.
While the developer is obliged to submit an application to the competent authority to obtain the license for the real estate project. <While the developer is obligated to finish the real estate project within the specified completion date. In the event of delay in handing over the land or real estate unit without a reason beyond his control, the buyer is entitled to a predetermined financial compensation if it is a developed land, or a similar rent if it is a residential unit.
While the developer is obliged to finish the real estate project by the specified completion date.
Text of the Articles of the Law
Article 1:
The following words and phrases, wherever used in these Regulations, shall have the meanings indicated in front of each of them, unless the context requires otherwise:Wherever used in these Regulations, the following words and phrases shall have the meanings indicated in front of each of them, unless the context requires otherwise:
System: The off-plan real estate sales and leasing system.
Regulations.
Regulation: The Executive Regulations of the System.
<Competent Authority: The competent authority to apply the provisions of the system, to be determined by an order issued by the Prime Minister.
Officer: The first official in the competent authority.
Real Estate Project: A real estate project to be developed for the sale or lease of developed lands or real estate units on the map, before starting its implementation or during the construction and development works according to the agreed design or plan.
Real Estate Project: A real estate project to be developed for the sale or lease of developed lands or real estate units on the map.
Escrow account: A special bank account for the real estate project, in which the amounts paid by the financiers of the real estate project, buyers, or tenants of the project are deposited.
Real Estate Development.
Real Estate Development: The construction of residential, commercial, office, service, service, industrial, tourism or other real estate projects.
Developer: A legal entity licensed to engage in the activity of owning or leasing real estate for development and selling or leasing it as the case may be, and includes the main and sub-developer.
Sub-developer: A person with a legal capacity licensed to engage in the activity of owning or leasing real estate for development and selling or leasing it as the case may be.
Sub-developer: A legal entity licensed to engage in the activity of owning or leasing real estate for development and selling or leasing it based on an agreement with the master developer.
Subdeveloper: A legal entity licensed to engage in the activity of owning or leasing real estate for development and selling or leasing it based on an agreement with the master developer.
Real Estate Broker: A natural or legal person, licensed to practice real estate brokerage or provide real estate services in accordance with the statutory provisions.
Real Estate Broker.
Consulting Office: A consulting engineering office licensed by the competent authority, approved by the competent authority for the real estate project.
Chartered Accountant: A person licensed by the competent authority, approved by the competent authority for the real estate project.
Developer Registration Register: A register in which the names of developers who are qualified to develop, sell and lease real estate projects licensed by the competent authority to practice real estate development activity in the Kingdom are registered.
Developer Registration Register.
Real Estate Unit: The separated part of the real estate, which is sold or leased by the developer to others.
Real Estate Unit.
Common Part: The part that is shared among the owners of the real estate units in the real estate project.
Common Part.
Second Article:
The provisions of the Law shall apply to the following:1- The activity of selling and leasing real estate projects on the map, in which payments are received from buyers, tenants, or financiers of the real estate project.
2- The activity of selling and leasing real estate projects belonging to government agencies on the map in accordance with their nature and within the limits contained in the regulations.
Article Three:
No real estate developer has the right to engage in the activity of selling and leasing off-plan real estate projects unless he is registered in the developers' registration register, and it is not entitled to advertise them in the local or foreign media, nor to hold exhibitions and invite them; unless the real estate project is licensed by the competent authority; in accordance with the provisions of the law and regulations.
Regulation 4:
Article Four:
Fourth Article:
The competent authority shall, in accordance with the law, undertake the following:
<1- Supervising real estate projects, including issuing the necessary licenses, following up on their implementation, and monitoring and inspecting them. The official may assign some of these tasks to the private sector, in accordance with the provisions of the law and regulations.
2. <2- Preparing a database for the public on real estate projects licensed in accordance with the law. The regulation shall specify the data to be included in the database.
3. <3- Preparing a special register called (Developer Registration Register). The regulation shall specify the controls and procedures for registration.
Article Five:
The competent authority may request the developer - if he wishes to market the real estate project through a real estate broker - to provide it with a copy of the agreement concluded with the real estate broker, as specified by the regulation.
The competent authority may request the developer - if he wishes to market the real estate project through a real estate broker - to provide it with a copy of the agreement concluded with the real estate broker. Article Six:
Sixth Article:
1- The developer wishing to sell or lease off-plan real estate projects - after registering his name in the developer registration register - must submit an application to the competent authority to obtain the special license for the real estate project, accompanied by the following:
a- A copy of the valid commercial register, which allows him to engage in real estate development activity.
B- Membership certificate of the Chamber of Commerce.
B- Membership certificate of the Chamber of Commerce.
c- A copy of the credit record from a company licensed by the competent authority for credit services.
d- Building license for the project. <Valid building license for the real estate project. E- Property registration deed (valid) for the property to be developed.
F- Copy of the agreement.
f- A copy of the agreement concluded between him and the owner of the land or the owner of its benefit in accordance with the provisions of the Law and Regulations.
g- A copy of the agreement concluded between him and the owner of the land or the owner of its benefit.
g- A copy of the agreement concluded between the main developer and the sub-developer - if any - in accordance with the provisions of the Law and Regulations.
h- Architectural designs and engineering plans approved by the competent authorities.
I- A copy of the contract. <i- A copy of the contract concluded between him and the consulting office, in accordance with the provisions of the Law and Regulations.
j- A copy of the contract concluded between him and the chartered accountant, in accordance with the provisions of the Law and Regulations.
k- Feasibility study.
k- An economic feasibility study of the real estate project from a consulting office that includes: The estimated costs of the real estate project, the necessary expenditures, the cash flow, and the expected time period for its implementation.
K- A pledge from him. L- A pledge from him to start the construction works of the real estate project within (six) months from the date of obtaining the license.
M- A form of sales contract for the real estate project.
m- A sales contract form between him and the buyer and the dates of delivery of the sale specified by the day in accordance with the provisions of the law and regulations and not in conflict with the provisions of Islamic Sharia. <N- An agreement to open an escrow account between him and a licensed bank in the Kingdom, in accordance with the provisions of the Law and Regulations. <The competent authority may add or amend some of the conditions. <The competent authority shall decide on the application within (thirty) days from the date of completion of the required documents, and if that period expires without a decision, it shall be considered an approval of the application. If the competent authority rejects the request, the decision must be reasoned. The competent authority shall set the necessary requirements for the approval of the real estate project in all its stages, and these requirements shall be specified in the regulation.
Article Seven:
The competent authority may - in order to achieve the objectives of the system and when necessary - register a natural person in the developer registration register and license him to engage in the activity of selling and leasing off-plan real estate projects; according to the controls determined by the regulation, which includes a specific ceiling for the size of the real estate project, and a specific number of real estate projects that he is allowed to implement annually, in accordance with the provisions of the system and the regulation.Article Eight:
<Without prejudice to the provisions of the Real Estate Registration Law, the competent authority shall, when issuing the special license for the real estate project, request that the property registration deed for the property to be developed be marked (at the competent notary) not to dispose of its ownership until the real estate development works are completed, and the mark on the property registration deed for that property shall not be removed unless the competent authority approves it. The regulation specifies the cases in which the indication of non-disposal is lifted. The person affected by the decision of the competent authority may appeal to the committee stipulated in Article (21) of the Law.
Article Nine:
A separate escrow account shall be established in the name of each real estate project, and shall not be activated until after obtaining the special license for the real estate project and indicating on the title deed of the property to be developed.
Article Ten:
1- The escrow account shall be for the purposes of disbursement on the licensed real estate project only, and the amounts deposited in it may not be seized for the benefit of the developer's creditors.
2- If the developer obtains a special license for the real estate project. <2- If the developer or landowner obtains financing for the licensed real estate project, it must be deposited in the escrow account, and the financing amount shall be disposed of in accordance with the provisions of the Law and Regulations. Article Eleven:
<Disbursement from the escrow account shall be based on a disbursement document signed by the developer, the consultant office and the legal accountant, and in emergency cases, disbursement may be made at the request of the competent authority, as specified in the regulations. Article Twelve:
<The developer may request disbursement from the escrow account for administrative and marketing expenses - and other non-construction expenses of the licensed real estate project - at a rate not exceeding (20%) of the value of the real estate unit sold. The Chartered Accountant shall ensure that the total amount disbursed from the escrow account for non-construction expenses does not exceed (20%) of the total value of the real estate units sold.
Article Thirteen:
<After the approval of the competent authority, the developer may withdraw more than the total actual cost of finishing the real estate project and its services, based on a report from the contractor and the consulting office. The legal accountant shall keep (20%) in the escrow account until the completion of the real estate project.
Article Fourteen:
<The Chartered Accountant must keep (5%) of the total value of the construction cost in the escrow account, or the developer must provide the Chartered Accountant with a bank guarantee for the same amount, after the developer obtains the completion certificate, and the amount kept in the escrow account shall not be paid to the developer until after the expiration of a period (one year) from the date of completion of the licensed real estate project. Or in the event of submitting an insurance policy for hidden defects of buildings and constructions in accordance with the regulations. Article Fifteen:
The developer is obligated to submit financial statements - prepared by the chartered accountant - for each licensed real estate project; to the competent authority.
Article Sixteen:
<Neither the developer nor the landowner has the right to dispose of the common part of the licensed real estate project before sorting the real estate units. Disposal after sorting shall be in accordance with the system of ownership, sorting and management of real estate units.
Article Seventeen:
<The buyer or tenant, or their representative, shall have the right to view the accounting records and be provided with copies of them, as specified in the regulations. Article Eighteen:
The competent authority may request the chartered accountant and the consulting office to provide it with the information and data it deems necessary to review, and it may also seek the assistance of whomever it deems necessary to audit such information and data.
1- The competent authority may request the chartered accountant and the consulting office to provide it with the information and data it deems necessary to review. <The competent authority may request a report on the progress of the licensed real estate project from the chartered accountant and the consulting office, as specified in the regulations. Article Nineteen:
1- The Chartered Accountant and the Consulting Office - each in their respective fields - must inform the competent authority of any violation of the provisions of the Law or the Regulations that they become aware of by virtue of their work.
2- If it is proven that the licensee has violated the provisions of the Law or the Regulations. <If the competent authority proves that the developer, chartered accountant or consultant office has committed any violation of the provisions of the Law or the Regulations, it must inform the violator of this in writing and set a deadline for him to correct the violation, without prejudice to the application of the penalties stipulated in the Law against him. The violator must notify the competent authority in writing of the correction of the violation within that period of time.
3. <If the competent authority proves that the bank has committed any violation of the provisions of the Law or the Regulation, it shall notify the Saudi Central Bank in writing. Article Twenty:
Article Twenty:
1- The developer is obligated to finish the real estate project on the date set for its completion. If the delivery of the land or real estate unit is delayed without a reason beyond its control, the buyer is entitled to a predetermined material compensation if it is a developed land, or a similar rent if it is a residential unit.
2- If there is any delay in the delivery of the land or real estate unit without a reason beyond its control, the buyer is entitled to a predetermined material compensation.
2- If any emergency circumstance occurs that results in the non-completion of the licensed real estate project, the competent authority - in consultation with the legal accountant and the consultant office of the real estate project - may take the necessary measures to ensure the completion of the licensed real estate project or its liquidation and return the amounts paid to the real estate project; as specified in the regulation.
3- If a violation of the provisions of the Law or Regulation occurs, the competent authority may take the necessary measures, including stopping the licensed real estate project until the violation is removed.
Article Twenty-First:
Violations of the provisions of the Law and Regulations - except for the violations mentioned in Article (24) thereof - and the imposition of a fine not exceeding one million riyals shall be considered by a committee (or more) formed by a decision of the official for a renewable period of (three) years, consisting of not less than three members, and the decision to form it shall specify who shall preside over it, provided that he is a specialist in Sharia or regulations, and its decisions shall be issued by majority and shall be reasoned and approved by the official.
1. The regulation shall specify the committee's work rules, procedures, and remuneration of its members.
2- The regulation shall specify the committee's work rules, procedures, and remuneration. 3- The committee's decisions may be challenged before the Administrative Court within (sixty) days from the date of notification of the decision.
3- The committee's decisions may be challenged before the Administrative Court. Article Twenty-Two:
Without prejudice to the provision of paragraph (1) of Article (26) of the Law, inspectors - to be determined by a decision issued by the official - shall jointly or individually control, prove and investigate violations of the provisions of the Law and the Regulations, and the Regulations shall specify their work mechanism.
Article Twenty-Three:
<The official shall, by his decision, issue a classification table for violations - other than those stipulated in Article (24) of the Law - and specify the penalties within the limits stipulated in Article (21) of the Law, taking into account the nature and gravity of each violation and the aggravating and mitigating circumstances.
Article Twenty-Four:
Without prejudice to any harsher penalty stipulated by another law, a penalty of imprisonment of not more than five years or a fine of not more than ten million riyals, or both:
1- Anyone who engages in the activity of selling and leasing real estate projects on the map, or collecting sums from buyers or tenants of properties in a real estate project, without obtaining a license.
2- Anyone who offers to sell or lease real estate projects on the map, or collects sums from buyers or tenants of real estate projects, without obtaining a license. 2- Whoever submits false documents or data to apply for a license for the real estate project.
2- Whoever submits false documents or data to obtain a license for the real estate project. <3- Anyone who knowingly offers or advertises the sale or rental of off-plan properties in fictitious real estate projects. 4 - Whoever embezzles, squanders or unlawfully uses sums handed over to him for the purpose of establishing the real estate project.
5 - Whoever receives a license for the real estate project. <5 - Anyone who received sums for the purpose of reserving lands or real estate units with the intention of selling or renting them off-plan, as the case may be, and did not deposit them in the escrow account. 6. Any chartered accountant who deliberately makes an incorrect report as a result of his review of the financial position of the real estate project, or deliberately conceals material facts in his report.
6. <7- Any consultant who knowingly certifies incorrect documents related to the real estate project. Article Twenty-Five:
1- The competent authority may remove the developer's registration from the Developer Registration Register in any of the following two cases:
A. a- If he does not start the construction works of the licensed real estate project after the expiration of (six) months from the date of obtaining the license, without an acceptable excuse.
B- If he does not start the construction works of the licensed real estate project after (six) months from the date of obtaining the license, without an acceptable excuse. If he repeatedly delays or fails to complete a number of real estate projects, or it is proven that he violates the quality of their implementation in a way that results in harm to buyers or tenants.
2.
2- The competent authority shall remove the developer's registration from the developer registration register in any of the following two cases:
A. a- If it declares bankruptcy.
B- If he is punished for committing any serious violation of the provisions of the Law or the provisions of the laws and regulations governing the practice of real estate development activity in the Kingdom during the implementation of the real estate project, provided that the regulation shall specify the serious violations.
Article Twenty-Six:
<The Public Prosecution shall be responsible for investigating and prosecuting the offenses stipulated in Article (24) of the Law before the competent court.
2- The competent court is responsible for hearing cases arising from violations stipulated in Article (24) of the Law and imposing penalties on violators.
3- The competent court is responsible for hearing cases arising from violations stipulated in Article (24) of the Law. The competent court may include in the judgment issued with the penalty a provision to publish its summary at the expense of the violator in a local newspaper published in his place of residence, or if there is no newspaper in his place of residence in the nearest area, or published in any other appropriate means, depending on the type of violation committed, its gravity and its impact, provided that the publication is after the judgment has acquired final status.
3- The competent court may include a provision to publish its summary at the expense of the violator in a local newspaper published in his place of residence, or in any other appropriate means.
Article Twenty-seven:
<The competent authority may charge a financial remuneration for the services it provides in accordance with the provisions of the Law, in accordance with the regulations.
Article Twenty-eight:
The official shall issue the regulations within (ninety) days from the date of publication of the Law in the Official Gazette, and they shall be effective from the date of its implementation.
Article Twenty-nine:
Article Twenty-nine:
<The Law shall repeal all provisions that contradict it. Article Thirty:
Article Thirty:
The Law shall enter into force ninety (90) days after its publication in the Official Gazette.
