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Case Study
Drafting Real Estate Investment Agreements Based on Lease with a Promise to Transfer Ownership Exceeding SAR 50 Million in Al-Summan
Dispute Value
SAR 50 million
Lease arrangements with a promise to transfer ownership require clear legal drafting to regulate the lease, future transfer of title, payment terms, parties’ obligations, default provisions, and exit arrangements.
In this matter, Atyar Advocates and Legal Consultants advised a private client on a land investment in Mishlah Centre, Al-Summan, with a value exceeding SAR 50 million.
The scope of work included legal advice, a comprehensive legal study, drafting lease-to-own real estate investment agreements, regulating ownership transfer, litigation, legal research, drafting pleadings and memoranda, and preparing an exit agreement between the parties.
Quick Matter Overview
Investment Value
More than SAR 50,000,000
Investment Location
Mishlah Centre, Al-Summan, Saudi Arabia
Subject of the Investment
Land and real estate assets
Nature of the Transaction
Lease with a promise to transfer ownership
Subject of the Legal Work
Investment Agreements & Ownership Transfer
Scope of Legal Services
Legal Advice, Drafting & Exit Agreement
Background of the Investment Relationship
The matter concerned a real estate investment involving several parcels of land located in Mishlah Centre in Al-Summan, with a total financial value exceeding SAR 50 million.
The transaction was structured through lease agreements incorporating a promise to transfer ownership. Under this arrangement, the relevant party was entitled to use the property for a specified period, while the future transfer of ownership remained subject to satisfaction of the agreed financial and contractual conditions.
Given the value of the investment and the involvement of several properties and parties, the matter required careful regulation of the particulars of each property, the lease term, financial consideration, payment schedule, conditions for exercising the promise to transfer ownership, the mechanism for assigning ownership, and the rights and obligations arising at each stage.
The client engaged Atyar Advocates and Legal Consultants to provide legal advice, prepare the legal study, and draft the investment agreements. The firm also provided litigation-related services and prepared an exit agreement governing termination of the relationship and settlement of the parties’ rights.
Value of the Investment Transactions
Subject of the Investment
Lease-to-Own Land Investment
Property Location
Mishlah Centre, Al-Summan
Legal Framework
Relevant Saudi Real Estate, Investment & Contract Laws
Nature of the Lease with a Promise to Transfer Ownership
The transaction focused on regulating the right to use the land during the lease term while establishing a contractual promise that ownership would be transferred after satisfaction of the conditions specified in the investment agreements.
The principal legal matters included:
- Identifying the properties subject to the investment.
- Reviewing title documents and rights affecting the properties.
- Defining the lease term and commencement and expiry dates.
- Regulating the financial consideration and payment schedule.
- Distinguishing rent from amounts connected with the transfer of ownership.
- Defining the conditions for exercising the promise to transfer ownership.
- Regulating the use and preservation of the properties.
- Allocating maintenance obligations and related costs.
- Addressing delay and non-payment.
- Regulating the assignment of contractual rights or ownership.
- Defining the procedures for transferring and documenting title.
- Regulating rescission, termination, and return of the properties.
- Addressing claims and disputes between the parties.
- Preparing an exit agreement and settling the parties’ rights.
Essential Elements of the Exit Agreement
Shares and Rights Subject to the Exit
Identifying the location, area, description, title particulars, and any rights or restrictions affecting each property.
Lease and Financial Consideration
Regulating the lease term, rent, payment schedule, method of payment, and the consequences of delay or non-payment.
Promise to Transfer Ownership
Defining the conditions for exercising the promise, its duration, the associated consideration, and the requirements to be satisfied before ownership may pass.
Assignment and Transfer of Ownership
Regulating the assignment of real estate rights, procedures for transferring and documenting title, applicable fees, and the parties’ respective responsibilities.
Default and Rescission
Defining events of default, notice and cure procedures, termination rights, compensation, and return of the properties.
Key Legal Challenges
Regulating the withdrawal of a party or termination of the relationship and defining the financial consideration, releases, claims, and final obligations.
Key Legal Challenges
Distinguishing the Lease from the Promise to Transfer Ownership
The agreement clearly distinguished the lease rights from the future transfer of ownership, defining the parties’ rights and obligations while preventing premature transfer of title.
Multiple Properties and Ownership Particulars
The investment involved multiple land parcels, requiring accurate identification of each property and verification that the agreement matched the title documents and plans.
Financial Terms & Payments
Transactions exceeding SAR 50 million required detailed regulation of rent, instalments, and payments related to the future transfer of ownership, including the treatment of paid amounts upon completion or termination.
Conditions for Transfer of Ownership
The agreements defined the conditions, approvals, and procedures for ownership transfer, while allocating responsibility for completing the transfer and documentation.
Default and Non-Payment
The agreements regulated payment defaults, notice requirements, remedies, and the impact of default on the promise to transfer ownership.
Assignment and Exit Arrangements
The agreements regulated assignment, party exit, settlement terms, and the treatment of existing obligations to prevent conflicting rights.
Our Legal Strategy
Property & Title Review
The land and real estate assets were reviewed to confirm ownership, identify restrictions, and support drafting agreements for the investment.
Determining the Appropriate Legal Structure
The contractual structure defined the lease, ownership transfer, and exit stages, with the parties’ rights and obligations at each stage.
Financial Structure & Payments
The agreements regulated rent, instalments, ownership transfer payments, payment schedules, defaults, and treatment of paid amounts upon termination.
Promise Conditions
The conditions, documents, procedures, and responsibilities required for ownership transfer were defined.
Legal Position & Litigation
Legal studies, research, pleadings, and representation were provided for the agreements and related claims.
Drafting the Exit Agreement
An agreement was prepared to regulate party exit, settlement of rights, transfer of obligations, confidentiality, and breach consequences.
Legal Services Provided
Legal Advice
Providing advice concerning the lease-with-promise-to-transfer-ownership structure, the client’s rights and obligations, assignment, exit arrangements, and the available legal options.
Comprehensive Legal Study
Preparing a specialised legal assessment of the properties, agreements, financial consideration, conditions for transfer of ownership, and the principal risks associated with the transaction.
Litigation
Representing the client in matters and disputes arising from the investment agreements within the agreed scope of engagement.
Drafting Pleadings and Legal Memoranda
Preparing pleadings, legal memoranda, defences, responses, and other submissions required to protect the client’s legal position.
Legal Research
Conducting legal research concerning leasing, promises to transfer ownership, property rights, assignment, exit arrangements, and evidentiary matters.
Drafting the Investment Agreements and Exit Agreement
Drafting the lease-with-promise-to-transfer-ownership agreements, regulating the assignment of ownership, and preparing the exit agreement between the parties.
Legal Insight
A lease with a promise to transfer ownership requires drafting that clearly separates the existing lease relationship from the future promise to transfer title and explains the legal effect of each payment and the parties’ rights at every stage.
This becomes particularly important where the transaction involves multiple properties and substantial financial value. The particulars of each property, the conditions of use, ownership transfer, assignment, and documentation should be defined separately and clearly.
An exit agreement can also provide an orderly mechanism for terminating the relationship where it regulates the settlement of accounts and claims, releases, transfer of rights, performance deadlines, and the consequences of default.
Legal Value Delivered to the Client
- Reviewed the land particulars and title documents.
- Identified the appropriate legal structure for the transaction.
- Regulated the lease term and use of the properties.
- Structured the financial consideration and payment schedule.
- Structured the financial consideration and payment schedule.
- Defined the conditions for exercising the promise to transfer ownership.
- Regulated assignment and transfer-of-title procedures.
- Allocated maintenance responsibilities and related costs.
- Addressed delay and non-payment.
- Regulated rescission and termination.
- Reviewed the parties’ competing rights and claims.
- Prepared a comprehensive legal study.
- Conducted supporting legal research
- Drafted pleadings and legal memoranda.
- Provided litigation and legal representation.
- Drafted the investment agreements
- Prepared the exit agreement
- Protected the confidentiality of the parties and properties
Scope of Legal Work
Atyar Advocates and Legal Consultants* provided legal services to a private client concerning an investment in land located in Mishlah Centre, Al-Summan, with a financial value exceeding SAR 50 million. The investment was structured as a lease with a promise to transfer ownership.
The scope of work included legal advice, preparation of a comprehensive legal study, drafting investment agreements structured as leases with a promise to transfer ownership, regulating the assignment of real estate ownership, litigation, drafting pleadings and legal memoranda, and conducting legal research.
The engagement also included preparation of an exit agreement governing termination of the investment relationship and settlement of the parties’ rights, claims, and obligations.
The work was undertaken without disclosing the client’s identity, the other parties, the detailed property information, or the confidential financial terms.
Legal Team Responsible for This Matter
Prof. Dr. Turki Al-Tayyar
Founder and Managing Partner, and an expert in the judiciary, legal practice, arbitration, and university education, with more than 25 years of combined experience.
Mr. Salem Saad Al-Dosari
Partner specialising in administrative contracts, investment, and litigation, with extensive experience in administrative and commercial cases.
Practice Areas Related to This Matter
- Real Estate Dispute Resolution
- Property Ownership Claims
- Litigation Before the General Courts
- Investment Disputes
- Government Contracts and Administrative Matters
- Compensation Claims
Need Assistance Drafting a Lease with a Promise to Transfer Ownership?
If you are preparing to invest in land or real estate through a lease with a promise to transfer ownership, or require assistance with a real estate assignment or exit arrangement, Atyar Advocates and Legal Consultants provides legal advice, comprehensive studies, drafting, review, litigation, and settlement services throughout Saudi Arabia.
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- 3132 شارع الأمير تركي، الكورنيش، 6309, الخبر
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- 00966555398969
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