Buying an off-plan property often begins with an attractive image, an architectural rendering that suggests a fully finished home, and an advertised price that encourages booking before construction is complete. However, the period between the advertisement and receiving the keys is not merely a waiting period; it is a contractual, financial, and construction journey involving multiple checkpoints, and risks may arise regarding the clarity of specifications, the regularity of construction, payments, delivery dates, and the quality of the unit upon receipt.<\/p>\n\n\n\n
In the Saudi real estate market, off-plan sales and leasing are subject to regulations overseen by Public Authority for Real Estate<\/a><\/strong> Through the \u00abWafi\u00bb program, which aims to enhance transparency and disclosure and protect the rights of the parties to a contractual relationship.<\/p>\n\n\n\n However, the existence of a regulatory framework does not negate the importance of conducting individual due diligence before signing, nor does it mean that every project carries the same level of risk. Therefore, the buyer faces several questions, including: Is the price reasonable? What exactly am I buying? How will my money be managed? And what can I do if the project is delayed or the unit differs from the agreed-upon specifications?<\/p>\n\n\n\n The marketing phase represents the first point of contact between the buyer and the project; it is during this phase that the buyer\u2019s expectations regarding the location, size, design, amenities, level of finish, and expected delivery date are formed. However, renderings and marketing designs alone are not sufficient to prove that all visible elements will be executed exactly as depicted.<\/p>\n\n\n\n The executive regulations for the system governing the sale and lease of off-plan real estate projects stipulate requirements regarding marketing licenses and the disclosure of the project\u2019s status and future plans when collecting reservation fees under the license, and specify the data to be included in the real estate projects database.<\/p>\n\n\n\n Buyer protection begins by verifying that the listing matches the project\u2019s official information, checking the developer\u2019s name and licensing status, reviewing the plans and written specifications, and not relying solely on verbal promises or promotional materials.<\/p>\n\n\n\n The risk during the advertising phase is that the buyer may base their decision on a marketing image without reviewing the contractual details, only to discover later that some of the features they expected are not included in the binding specifications.<\/p>\n\n\n\n Once the buyer is satisfied with the listing, they proceed to make a reservation and sign the contract; at this point, the marketing promises become obligations that must be clear and verifiable in the event of a dispute.<\/p>\n\n\n\n The items that the buyer must review include the unit\u2019s description, area, and specifications; the payment schedule; the specified completion period; the delivery date; provisions regarding delays, compensation, and contract termination, as well as arrangements for shared ownership in projects that include common facilities and areas.<\/p>\n\n\n\n This stage becomes even more important when the proposal includes an estimated delivery date that differs from the binding date specified in the contract, or when the terms regarding specification changes and additional fees are not clear enough to the buyer.<\/p>\n\n\n\n Therefore, at this stage, the buyer should not sign a contract without reading its detailed terms and conditions, or rely on sales correspondence instead of the approved contract text.<\/p>\n\n\n\n The practical rule here is not to focus solely on the total price, but rather to understand what the price includes, what obligations the buyer may face later on, when each installment is due, and what rights apply in the event of a delay or a discrepancy in specifications.<\/p>\n\n\n\n Managing buyers\u2019 funds is one of the most sensitive stages in off-plan sales projects, because the buyer pays for a unit that has not yet been completed, while the project requires ongoing financing to carry out the work.<\/p>\n\n\n\n The implementing regulations stipulate that amounts paid by buyers must be deposited directly into the project\u2019s escrow account, and they also govern the mechanisms for disbursements from the account, including the documentation of disbursements and approval by the relevant authorities in accordance with established controls.<\/p>\n\n\n\n The regulation also allows the buyer or tenant to request access to the accounting records for their unit and requires the developer to provide a copy within 10 business days of the request.<\/p>\n\n\n\n The existence of an escrow account does not mean that the buyer can withdraw their funds immediately whenever they wish, or that a delay in performance automatically results in a full refund without any further procedures; rather, regulatory and contractual mechanisms determine how to handle cases of delay, default, and refunds.<\/p>\n\n\n\n The sticking point at this stage is either a failure to verify that payments are being transferred to the project\u2019s escrow account, or a lack of understanding of the relationship between the payment schedule and actual progress in implementation.<\/p>\n\n\n\n The project may face implementation, financing, or operational challenges that affect its progress, but the buyer should not be learning about the problem for the first time as the delivery date approaches, since monitoring the project\u2019s status and reviewing related reports helps determine whether implementation is proceeding according to the announced schedule.<\/p>\n\n\n\n The regulations govern the mechanisms for monitoring project progress through reports issued by the consulting firm, the certified public accountant, and the bank, and allow the Authority to request periodic reports on the project\u2019s progress in accordance with the circumstances and timeframes specified in the regulations. These include the following indicators that warrant monitoring: actual progress in construction; announced changes to the plans; the clarity of communication with buyers; and the availability of up-to-date official information regarding the project duration and delivery date.<\/p>\n\n\n\n The absence of updates alone is not enough to prove that the project has stalled, just as the continued release of marketing announcements is not enough to prove that implementation is proceeding on schedule. Therefore, a distinction must be made between official information, marketing statements, and observations from the field.<\/p>\n\n\n\n The problem buyers face at this stage is a lack of regular follow-up on their part, or relying on general assurances that do not include a clear schedule of remaining work and an updated delivery date.<\/p>\n\n\n\n A delay in delivery is one of the most sensitive scenarios, especially when the buyer has arranged for his family to move, or for his lease to end, or has made financial commitments based on a specific date.<\/p>\n\n\n\n The implementing regulations distinguish between delay and default. According to Article 34, a developer is considered to be in default if the project has not been completed by the end of its term for reasons beyond the developer\u2019s control, and the Authority may grant the developer an extension of no more than one year, Article 34 also addresses cases of project failure, including failure to complete the project after the expiration of the extension or a suspension of construction work for more than 180 days at any stage, unless the developer provides a valid reason accepted by the Authority.<\/p>\n\n\n\n Article 35 provides for compensation for delays not caused by reasons beyond the developer\u2019s control. In developed land projects, compensation is determined by agreement between the parties, provided that it is not less than 2% of the sale value annually. As for real estate units, compensation shall be determined by agreement between the parties, provided that it is not less than the fair market rent for the unit as assessed by a certified appraiser.<\/p>\n\n\n\n These provisions should not be interpreted as automatic compensation payable in every case of delay without regard to the circumstances, as their application depends on the facts, the cause, the contract, and the relevant statutory provisions.<\/p>\n\n\n\n In the event of a dispute regarding compensation or contractual obligations, the FAQs for the \u00abWafi\u00bb program explain that the matter should be referred to the competent courts or the Saudi Real Estate Arbitration Center, as stipulated in the contract signed between the parties.<\/p>\n\n\n\n The sticking point at this stage is that the buyer waits too long without documenting correspondence, reviewing the contract, or finding out what options are available to them if the delivery date is missed.<\/p>\n\n\n\n Even after construction is complete, the purchasing process does not end simply with the handover of the keys; as the final inspection is essential to verify that the unit complies with the contract, plans, and agreed-upon specifications; to identify any defects that need to be addressed; and to ensure that the relevant documents and warranties are provided.<\/p>\n\n\n\n The regulations require the developer to carry out the project in accordance with the agreed-upon specifications and to provide the buyer with the actual as-built drawings of the unit, They also include provisions for addressing defects in construction and finishes, including the possibility of taking action regarding amounts retained in the escrow account in accordance with regulatory requirements.<\/p>\n\n\n\n The FAQs for the \u00abWafi\u00bb program explain that the warranty for construction work related to foundations, concrete, and insulation is valid for 10 years from the date of unit handover, and that the warranty for mechanical and electrical installations is valid for one year from the date of handover.<\/p>\n\n\n\n The buyer must document any observations in the acceptance report, request that defects be remedied in accordance with contractual and regulatory procedures, and retain copies of documents and warranties, rather than relying on verbal assurances.<\/p>\n\n\n\n The laws and regulations make it clear that off-plan purchases are not without safeguards; there is a project permit, an escrow account, contractual obligations, mechanisms for monitoring construction progress, and provisions regarding delays and defects.<\/p>\n\n\n\n However, the effectiveness of these tools for the buyer also depends on the buyer\u2019s ability to access information, understand the contract, monitor the project, keep records, and take timely action when a problem arises.<\/p>\n\n\n\n Therefore, the challenge is not limited to the possibility of project delays; it also involves the buyer\u2019s ability to identify early warning signs, distinguish between marketing promises and written commitments, and understand the course of action to take if things do not go as agreed.<\/p>\n\n\n\n Read also:<\/strong><\/p>\n\n\n\n Before Paying a Deposit: 5 Steps to Protect Property Buyers from Fake Listings<\/a><\/strong><\/p>\n\n\n\n 15 minutes free and 4 occasions without fees.. Draft of new regulations for paid parking<\/a><\/strong><\/p>\n\n\n\n <\/p>","protected":false},"excerpt":{"rendered":" Reading time: <\/span> 5<\/span> Minutes<\/span><\/span>\u00abAmlak\u00bb tracks the process of purchasing off-plan real estate in Saudi Arabia\u2014from the listing and signing of the contract to payments and delivery\u2014and explains the key risks, the buyer\u2019s rights, and the legal safeguards.<\/p>","protected":false},"author":84,"featured_media":111603,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_titles_title":"","_seopress_titles_desc":"\u062a\u0631\u0635\u062f \u00ab\u0623\u0645\u0644\u0627\u0643\u00bb \u0631\u062d\u0644\u0629 \u0634\u0631\u0627\u0621 \u0627\u0644\u0639\u0642\u0627\u0631 \u0639\u0644\u0649 \u0627\u0644\u062e\u0627\u0631\u0637\u0629 \u0641\u064a \u0627\u0644\u0633\u0639\u0648\u062f\u064a\u0629\u060c \u0645\u0646 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Is the image shown here what will actually be delivered?<\/h2>\n\n\n\n
Reservations and Contracts... Where Are the Real Commitments Set Out?<\/h2>\n\n\n\n
Financial payments... Are they linked to the project's progress?<\/h2>\n\n\n\n
The Construction Phase... When Schedules Fall Short of Reality<\/h2>\n\n\n\n
Delayed Delivery... What Rights Should You Be Aware Of?<\/h2>\n\n\n\n
Handover... Does the completion of construction mean the fulfillment of the obligation?<\/h2>\n\n\n\n
Where does the gap lie between theory and practice?<\/h2>\n\n\n\n