the General Real Estate Authority today launched a platform for receiving applications for real estate contribution licenses, in the presence of Majed Al-Hogail, Minister of Municipal, Rural Affairs, and Housing and Chairman of the Board of Directors of the General Real Estate Authority, and Mohammed Al-Qweiz, Chairman of the Board of the Capital Market Authority.
Real Estate Contribution System
According to the Real Estate Contributions System and its governing regulations, real estate contributions are classified, based on size, into two main categories: the first is small real estate contributions, where the total funds raised do not exceed 100 million riyals, and the second is large real estate contributions, where the total funds raised exceed 100 million riyals.
The draft regulation also divides real estate developers into four categories based on their technical, financial, and institutional capabilities, namely: qualified real estate developers, established real estate developers, licensed real estate developers, and unlicensed real estate developers.
Real estate contributions involving the same property may not be licensed during the same period, and the property subject to the contribution must meet one of the following conditions:
The share must be a registered in-kind share; it must be purchased for the benefit of the contribution; and the property must be purchased for the benefit of the contribution. The license application must also include the agreement concluded with the property owner, which must contain a property appraisal by three certified appraisers. Additionally, the owner must commit to transferring the property to the contribution.
Meanwhile, the property owner must register a document of ownership in the real estate registry, restricting disposal of the property until the real estate contribution license is issued and the offering and fundraising are completed.
Last July, the Saudi Cabinet, chaired by the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz, approved during its weekly session on Tuesday Real Estate Contribution System. The system aims to regulate real estate contribution activities, enhance transparency and disclosure, and protect the rights of all parties involved in real estate contributions.
