SAUDI REAL ESTATE REGULATIONS | DEVELOPER QUALIFICATION GUIDE Real Estate Developer Qualification Requirements for Off-Plan Projects in Saudi Arabia A practical legal guide to developer registration, minimum evaluation scores, financial and technical qualification, required documents, and licensing requirements for Saudi off-plan real estate projects. Developer Qualification Off-Plan Real Estate REGA Requirements Developer qualification, architectural planning and regulatory requirements for off-plan projects in Saudi Arabia. Real estate developers seeking to undertake off-plan sales and leasing activities in Saudi Arabia must satisfy regulatory qualification requirements before proceeding with licensed development projects. Under the Saudi Law of Selling and Leasing Off-Plan Real Estate Projects and its Implementing Regulations, developers are assessed against financial, professional, technical and administrative criteria. The Real Estate General Authority (REGA) oversees developer registration and project licensing within the applicable framework. In this guide, Atyar Advocates & Legal Consultants explains the principal requirements for developer qualification, minimum evaluation scores, supporting documentation, and legal compliance. What Is Real Estate Developer Qualification in Saudi Arabia? Real estate developer qualification is a regulatory assessment of an applicant’s eligibility and capabilities to undertake regulated real estate development activities. The evaluation may consider the following areas: Financial capacity and credit history. Previous real estate development experience. Technical and administrative resources. Professional and organizational requirements. Completion of approved qualification programs. Submission of supporting documentation. Important: Qualification supports registration in the developers’ register. Registration is not the same as obtaining a license for an individual off-plan project. REGA Developer Registration Requirements Article 3 of the Implementing Regulations establishes separate registration conditions for legal entities and natural persons. Companies and Legal Entities 35 / 100 Minimum evaluation score for registration, together with a valid commercial registration. Individual Developers 35 / 55 Minimum evaluation score for registration as a natural person under the applicable criteria. The minimum points for registration should not be confused with additional evaluation thresholds required when licensing a particular development. Qualification Criteria for Real Estate Development Companies Article 5 of the Implementing Regulations establishes evaluation criteria for legal entities applying for developer registration. 1 Financial Capacity Submit financial statements or the applicable financial declaration based on the company’s status and age. 2 Credit Standing Provide a qualifying credit certificate issued by a licensed credit services provider. 3 Administrative Compliance Address occupational safety, Saudization, social insurance and other professional documentary requirements. 4 Technical Resources Provide supporting evidence of relevant engineering capabilities and completion of approved programs. Establishing a compliant legal and organizational structure is an important consideration for development companies. Relevant guidance is available through Atyar’s corporate and commercial law services for Saudi businesses , including contractual and governance-related matters. Qualification Requirements for Individual Real Estate Developers The evaluation framework for natural persons differs from that applicable to companies and other legal entities. Approved Qualification Program An applicant must provide evidence of successful completion of the relevant approved real estate developer qualification program. Previous Development Experience Individual developers must present information about previously completed projects and supporting evidence, in accordance with the project types and conditions specified in the regulations. Credit Record A qualifying credit certificate must be issued by a licensed provider and satisfy the applicable validity period. VAT Registration The relevant VAT registration documentation forms part of the evaluation criteria for natural persons. Do Qualification Scores Vary According to Project Size? Yes. Article 11 of the Implementing Regulations establishes additional developer evaluation thresholds for project licensing. For legal entities, the required score depends on the project’s built-up area and the applicable licensing category. Regulatory distinction: The minimum developer registration score does not automatically satisfy every project license requirement. Developers must verify the appropriate score for their proposed development. Individual developers are also subject to specific conditions regarding project size, implementation periods, and the number of projects permitted under the regulations. Documents Required for Real Estate Developer Qualification The documentation required depends on the developer’s legal status and the relevant application category. Valid commercial registration for legal entities. Required financial statements or financial declaration. A qualifying credit certificate. Applicable zakat and VAT registration documentation. Social insurance and Saudization documents for companies. Certificates confirming completion of approved qualification programs. Records of previously completed projects and supporting evidence. Relevant technical and professional documents. Applicants should verify the requirements published through REGA’s official channels before submitting their applications. Developer Qualification Versus Off-Plan Project Licensing Developer registration and project licensing are separate regulatory processes serving different purposes. Developer Qualification Evaluates the applicant’s organizational, financial, technical and professional eligibility for inclusion in the developers’ register. Project Licensing Examines a specific development and its applicable legal, technical, financial and regulatory requirements before authorization. Developers should also review land ownership, development rights and project agreements before proceeding with licensing. These matters fall within the scope of real estate and construction legal services in Saudi Arabia , particularly where the developer and landowner are different parties. What Happens if a Developer No Longer Meets Qualification Criteria? Article 3 of the Implementing Regulations provides for suspension of registration when a developer no longer satisfies the minimum evaluation criteria. The developer is granted a three-month corrective period to remedy the deficiency. If the situation is not corrected within that period, registration may be removed in accordance with the regulations. The regulations also allow a registered developer to request re-evaluation when its capabilities improve. Common Mistakes in Developer Qualification Applications Incomplete preparation may affect the registration process or lead to additional documentary requirements. Incomplete financial statements or supporting documents. Credit certificates that fail validity requirements. Incorrect assumptions about minimum evaluation scores. Confusion between registration and project licensing. Insufficient documentation of completed development projects. Failure to review project-specific requirements before applying. Failure to update registration information when circumstances change. Contractual exposure can also arise where the project involves landowners, contractors, investors, consultants or financing institutions. Proper drafting and review of development, construction and commercial agreements can help clarify responsibilities, payment obligations and dispute-resolution arrangements. How Legal Counsel Can Support Real Estate Developers Developer qualification involves regulatory obligations that may overlap with corporate, contractual and property-related legal

SAUDI REAL ESTATE LAW | DEVELOPER GUIDE Wafi Off-Plan Sales in Saudi Arabia: Developer Licensing and Compliance Guide Understand Wafi off-plan real estate licensing, developer registration, escrow account requirements, project obligations, and the legal risks involved in property development in Saudi Arabia. Off-Plan Real Estate Saudi Property Law Developer Licensing Off-plan property development, architectural planning, and legal compliance in Saudi Arabia. Off-plan real estate development has become an important part of Saudi Arabia’s property market. It enables developers to sell or lease residential and commercial units before construction is completed, subject to applicable regulations. However, entering the off-plan market requires more than acquiring land, preparing architectural plans, or obtaining construction financing. Developers must satisfy specific licensing, financial, contractual, and regulatory requirements. In this guide, Atyar Advocates & Legal Consultants examines the principal legal considerations associated with Wafi off-plan sales in Saudi Arabia, including developer registration, project licensing, escrow arrangements, and ongoing compliance obligations. What Is Wafi in Saudi Arabia? Wafi is the commonly used name for Saudi Arabia’s regulatory framework governing the sale and lease of off-plan real estate projects. The framework operates under the Law of Selling and Leasing Off-Plan Real Estate Projects and its Implementing Regulations, administered by the Real Estate General Authority (REGA). The regulatory framework aims to: Regulate off-plan real estate sales and leasing. Promote transparency and project disclosure. Protect the contractual rights of purchasers, tenants, and developers. Establish oversight of project implementation and financial arrangements. Reduce regulatory violations and development risks. Important distinction: Developer registration and individual project licensing are separate regulatory requirements. Registration alone does not automatically authorize off-plan sales for a particular development. Wafi Off-Plan Sales License Requirements in Saudi Arabia The specific requirements depend on the developer’s legal status, the proposed project, and the type of authorization sought. Developers should address the following matters before undertaking regulated activities. 1 Developer Registration Confirm that the developer satisfies the applicable registration and evaluation requirements established by the Real Estate General Authority. 2 Land Ownership and Development Rights Review title deeds, development agreements, and other documents demonstrating the legal basis for developing the land. 3 Technical and Financial Documentation Prepare the feasibility study, engineering layouts, architectural designs, and supporting documentation required for the relevant application. 4 Project Licensing Obtain the appropriate project authorization and distinguish between marketing activities and regulated sales or leasing. These requirements form part of the broader legal considerations addressed through real estate and construction legal services for developers in Saudi Arabia , particularly where multiple parties, financing arrangements, and development agreements are involved. Marketing Licenses Versus Off-Plan Sales Licenses Developers must distinguish between a license authorizing the marketing of an off-plan real estate project and the authorization required to conduct regulated sales or leasing activities. A marketing license does not automatically permit every activity associated with executing off-plan sales contracts or collecting purchaser payments. Reservation Payments During Marketing Article 10 of the Implementing Regulations provides specific conditions for receiving reservation payments during the validity of an off-plan project marketing license. Reservation payment limit: Under the applicable marketing license conditions, reservation fees must not exceed 5% of the real estate unit’s value. The developer must disclose the project’s status and future plans and deposit collected reservation amounts into the designated escrow account. Escrow Account Requirements for Off-Plan Projects Escrow accounts are an important regulatory mechanism for managing funds associated with licensed off-plan real estate projects. Saudi law establishes rules governing the deposit, use, and disbursement of funds collected from project financiers, purchasers, and tenants. Why Are Escrow Accounts Important? They organize project-related financial flows. They help ensure funds are used for the licensed development. They establish financial oversight and documentation requirements. They define responsibilities associated with payment and disbursement procedures. They help reduce financial and contractual exposure. Developers should align project financing, purchaser payment schedules, and contractual arrangements with the applicable escrow requirements. Developer Obligations After Obtaining a Wafi License Compliance responsibilities continue after the relevant project authorization is issued. Developers must consider their obligations throughout construction, project management, and unit delivery. Compliance With Approved Plans and Specifications Project implementation should be consistent with the approved technical documentation, contractual specifications, and applicable regulatory requirements. Disclosure of Material Project Information Purchasers and tenants should receive accurate information regarding the project, unit specifications, relevant contractual commitments, and other material matters. Construction Timelines and Handover Developers should monitor construction progress, contractor performance, technical changes, and handover requirements to identify potential delays and disputes. Contractual Risk Management Property development projects commonly involve landowners, contractors, engineering consultants, purchasers, and financial institutions. Proper drafting and review of development, construction, and commercial agreements can help clarify responsibilities, payment obligations, dispute-resolution procedures, and contractual remedies. Common Legal Risks in Off-Plan Property Development Off-plan developments can involve several sources of regulatory and contractual exposure. Their legal consequences depend on the applicable rules, agreement terms, and circumstances. Marketing or selling units without the necessary authorization. Disputes over land ownership or development rights. Non-compliance with escrow account requirements. Differences between approved specifications and completed work. Construction delays and late unit delivery. Disputes involving contractors, investors, landowners, or purchasers. Preventive legal review: Early assessment of project documentation, licensing requirements, and contractual arrangements can help identify legal risks before they develop into disputes. How Legal Counsel Supports Wafi Licensing and Compliance Off-plan real estate developments may involve overlapping regulatory, financial, ownership, and contractual obligations. Legal counsel can assist developers and investors in examining the risks associated with each stage of the project. Areas of Legal Review Land title and development agreements. Developer registration and project licensing. Off-plan sale and lease agreements. Construction and consultancy contracts. Escrow-related contractual obligations. Delays, compensation claims, and contractual disputes. Legal memoranda and dispute resolution. Where complex corporate or investment arrangements are involved, corporate and commercial law advisory for real estate developers and investors can assist in reviewing governance, commercial agreements, and the allocation of responsibilities among project participants. Legal Compliance Checklist Before Launching an Off-Plan Project Before marketing or selling off-plan units, developers should review the following matters: Confirm

LEGAL EXPERTISE | REAL ESTATE DEVELOPMENT | REGULATORY COMPLIANCE Saudi Off-Plan Sales Implementing Regulations: What Developers Need to Know Saudi Arabia’s Implementing Regulations for the Law of Selling and Leasing Off-Plan Real Estate Projects establish essential legal requirements for property developers operating within the Kingdom. The Regulations govern developer registration, project marketing and licensing, contracts, escrow accounts, construction implementation, regulatory supervision, and procedures involving delayed or distressed projects. Regulatory compliance is not completed merely by obtaining a project licence. Developers must also consider their continuing legal obligations throughout marketing, construction, project completion and handover. Atyar Advocates & Legal Consultants provides legal advisory, contract review and agreement drafting services concerning real estate investments, development arrangements, contractual responsibilities and legal risks. Developer Registration Project Licensing Escrow Compliance Regulatory Supervision Saudi off-plan development compliance: developer registration, project licensing, contracts, escrow accounts and regulatory oversight. What Are the Saudi Off-Plan Sales Implementing Regulations? The Implementing Regulations establish procedural and operational requirements for applying the Law of Selling and Leasing Off-Plan Real Estate Projects in Saudi Arabia. The Real Estate General Authority (REGA) exercises relevant regulatory functions, including developer registration, project licensing, supervision, inspection and enforcement under the applicable legal framework. 01 Developer Registration Registration and qualification requirements for developers. 02 Project Licensing Requirements for project marketing, licensing and implementation. 03 Delay and Distress Regulatory rules addressing incomplete and distressed projects. 04 Supervision and Inspection Regulatory monitoring, records and inspection obligations. 05 Final Provisions Additional rules completing the regulatory framework. Who Must Comply With Saudi Off-Plan Sales Regulations? The framework applies to developers, projects and activities falling within the scope of Saudi off-plan sales and leasing regulation. Applicable requirements may vary depending on the developer’s legal status, project characteristics, intended activities, and the type of authorisation sought. Important: Developers should review the legal scope of their activities before advertising properties, collecting reservation payments or entering into sale or lease agreements. Developer Registration vs. Marketing Licence vs. Project Licence Registration, marketing authorisation and project licensing are separate regulatory requirements. One does not automatically replace the others. Requirement Purpose Legal Consideration Developer Registration Establishes registration and qualification status. Does not automatically license every project. Marketing Licence Permits marketing within its authorised scope. Does not replace a full project licence. Project Licence Authorises the relevant project activity. Creates continuing project-specific obligations. What Are the Requirements for Developer Registration? The Regulations establish registration and qualification requirements for developers according to their legal status and the nature of the activity. Review the developer’s commercial registration. Identify applicable REGA registration conditions. Prepare required supporting documents. Verify professional qualification requirements. Check the validity of submitted information. Update relevant records when material details change. A company’s commercial registration should not be treated as proof that all off-plan developer requirements have been satisfied. What Is Required for an Off-Plan Project Marketing Licence? Article 10 addresses the marketing licence for off-plan real estate projects. Relevant application documents include property title information, marketing agreements where applicable, agreements with the landowner when relevant, and architectural and engineering documentation. 10 Working Days The prescribed decision period for a completed marketing application under Article 10. 180 Days Maximum initial marketing licence duration, subject to applicable extension provisions. 5% Reservation Limit Maximum reservation amount as a percentage of unit value, where collection is permitted. Can Developers Collect Reservation Payments During Marketing? Reservation payments may be collected in qualifying circumstances, subject to specific regulatory conditions. Disclose the project’s status and planned development. Observe the 5% reservation amount limit. Deposit collected funds into the designated escrow account. Comply with the scope and duration of the marketing licence. Regulatory Distinction: Marketing permission does not authorise unrestricted use of purchaser funds and does not replace the full project licence. What Documents Are Required for Full Off-Plan Project Licensing? Article 11 addresses project licensing documentation, including a feasibility study covering expected financial, construction and marketing matters, projected expenditure, delivery periods and financing sources. Project Feasibility Study Estimated development costs, income, financing, expenditure and project timelines. Property and Development Documents Review of land title, agreements and rights related to the development. Plans and Engineering Designs Relevant architectural drawings, engineering plans and technical approvals. Delivery and Contractual Obligations Consistency between delivery dates, payment arrangements, financing and contracts. What Contractual Responsibilities Must Developers Understand? Article 20 addresses standard contract provisions for categories of property within its scope, subject to the particular rules applicable to registered real estate. Defining purchaser and tenant payment schedules. Addressing late payment by purchasers. Regulating developer delay and compensation. Establishing implementation periods and extensions. Addressing applicable common-property arrangements. Recognising REGA’s statutory replacement-developer powers. The appropriate contract form must be assessed against the nature of the property and applicable registration and regulatory requirements. What Escrow Account Rules Apply to Off-Plan Projects? Saudi off-plan legislation establishes a dedicated escrow-account framework for regulated developments. The framework governs account separation, deposits, withdrawals and the use of funds for permitted project purposes. 01 Separate Accounts Maintain a dedicated escrow arrangement for each relevant project. 02 Project Deposits Deposit funds subject to the applicable escrow requirements. 03 Permitted Withdrawals Use project funds for authorised purposes with required documentation. 04 Documentation Maintain evidence of payments, expenditure and progress. 05 Financial Restrictions Observe applicable limits on expenditure outside direct construction costs. 06 Retention Requirements Comply with the relevant rules concerning retained funds, surplus and guarantees. Who Is Responsible for Escrow Withdrawals? Responsibilities for escrow withdrawal procedures are allocated among the developer, bank, engineering consultant and legal accountant under the applicable framework. Requests for withdrawal must relate to the project and satisfy the required documentary and certification conditions. Merely opening a bank account does not establish compliance with the full escrow withdrawal and oversight requirements. What Responsibilities Continue During Project Construction? Regulatory compliance continues throughout implementation and does not end when the licence is issued. Follow approved plans and specifications. Monitor construction progress and project milestones. Document modifications requiring approval. Maintain technical, financial and contractual records. Cooperate with regulators and relevant professionals. Manage purchaser and tenant communications. Evaluate delays and their legal

LEGAL EXPERTISE | OFF-PLAN REAL ESTATE | DELAY COMPENSATION AND DISTRESSED PROJECTS Delayed Delivery of Off-Plan Projects in Saudi Arabia: Rights and Legal Options Delayed delivery of an off-plan real estate project can cause financial and contractual losses to purchasers and create legal and regulatory obligations for developers. The legal implications become particularly important when the approved completion period has expired, construction works have stopped, or financing and implementation arrangements have become distressed. Where an off-plan real estate unit is delivered late without a cause beyond the developer’s control, Article 35 of the Implementing Regulations provides for compensation agreed between the parties, subject to a minimum equivalent to the unit’s rental value assessed by an accredited valuer, where the Article’s conditions apply. Atyar Advocates & Legal Consultants provides legal services involving real estate contracts, contractual performance, delay-related obligations, compensation claims and distressed development disputes. Delayed Property Handover Purchaser Compensation Equivalent Rent Distressed Projects Delayed off-plan development, purchaser rights, equivalent-rent compensation and legal options for addressing project distress. When Is an Off-Plan Project Legally Considered Delayed? Article 34 of Saudi Arabia’s Implementing Regulations for the Law of Selling and Leasing Off-Plan Real Estate Projects provides that a developer is considered delayed if the project is not completed after its prescribed period without a cause beyond the developer’s control. The assessment must therefore examine the project’s authorised implementation period, any approved extensions, and the reasons for incomplete construction. Important: The officially approved project completion period may differ from the delivery date stated in the purchaser’s contract. Both dates should be reviewed when assessing contractual and regulatory rights. What Is the Difference Between Project Delay and Project Distress? Delay and distress are separate regulatory concepts. Identifying the correct classification helps determine the legal and regulatory measures that may apply. Status Legal Test Potential Consequence Delayed Project Failure to complete after the prescribed period without a cause beyond the developer’s control. Assessment of compensation, responsibility and remedial measures. Additional Period REGA may approve an extension not exceeding one year. Continued implementation within the approved period. Distressed Project Failure to complete after the period including extension, or stoppage exceeding 180 days. Potential regulatory distress procedures. Accepted Legitimate Reason A legitimate reason accepted by REGA under Article 34. May affect the distress classification. Can an Off-Plan Developer Obtain an Extension of Time? Article 34 allows the Real Estate General Authority to grant an additional period for completing an off-plan project after its initial period has expired. The additional period cannot exceed one year under this provision. It is not an unrestricted right for the developer to change project deadlines without regulatory consideration. 01 Original Completion Period Review the authorised implementation period and the developer’s contractual commitments. 02 Approved Extension Check whether the competent authority approved an additional period and assess its legal effect. What Rights Do Purchasers Have When an Off-Plan Unit Is Delivered Late? Article 35 addresses compensation where a developer delays delivery of a real estate unit beyond the relevant completion date without a cause beyond the developer’s control. Compensation is determined by agreement between the parties, but cannot be lower than the equivalent rental value of the unit assessed by an accredited valuer, when the provision applies. Legal Consideration: The equivalent rental value should not be assumed from unsupported market estimates. The relevant valuation, applicable period, contractual provisions and legal conditions require review. Is Compensation Different When the Project Involves Developed Land? Yes. Article 35 distinguishes delayed delivery of a real estate unit from delayed delivery of developed land. Rent Residential or Other Real Estate Unit Compensation follows the parties’ agreement, subject to a minimum equivalent to the unit’s rental value determined by an accredited valuer. 2% Developed Land Compensation follows the parties’ agreement, subject to a minimum of 2% of the sale value calculated annually, where the statutory conditions apply. Important Distinction: The 2% annual minimum applies to developed land. It should not automatically be applied to delayed handover of apartments, villas or other units. How Is Compensation for Delayed Apartment or Villa Handover Assessed? Assessing compensation requires examining legal entitlement, the appropriate valuation and the supported delay period. 01 Establish Entitlement Assess the contractual delivery obligation, delay and factors affecting responsibility. 02 Determine Equivalent Rent Obtain the appropriate accredited valuation when Article 35 is applicable. 03 Determine the Relevant Period Review dates, notices, delivery records, agreements and other supporting evidence. Additional compensation claims may require a separate legal basis and evidence of loss and causation. What Causes of Delayed Off-Plan Delivery Should Be Investigated? Contractor or subcontractor delays. Incomplete infrastructure or utility connections. Financing and cash-flow difficulties. Engineering or design modifications. Problems obtaining materials or equipment. Prolonged interruption of construction works. Delays involving necessary regulatory approvals. Events asserted to be beyond the developer’s control. Identifying a reason for delay does not automatically excuse the developer from liability. Supporting evidence, causation and the applicable legal provisions must be examined. What Are the Developer’s Responsibilities During a Delivery Delay? The developer’s responsibilities may involve project completion, contractual performance, regulatory compliance, reporting and the rights of purchasers. Reviewing construction and delivery obligations. Responding to relevant contractual notices. Providing information required by REGA. Assessing the impact on purchaser and tenant rights. Cooperating with regulatory procedures when applicable. Following the restrictions on project and escrow funds. Implementing authorised corrective plans. Maintaining records concerning causes of delay. What Should a Purchaser Do When a Property Handover Is Delayed? The purchaser should preserve the sale agreement, payment records, correspondence, and any project or handover notices. It is also important to check the project’s regulatory status, any approved extension, and whether the delay satisfies the conditions for a legal claim. A developer’s delay does not automatically cancel all purchaser payment obligations. Withholding instalments or declaring termination requires separate legal review. What Happens if Construction Stops for More Than 180 Days? Article 34 identifies a construction stoppage exceeding 180 days at any stage of the project as a potential condition of project distress, unless the developer provides a legitimate

LEGAL EXPERTISE | REAL ESTATE CONTRACTS AND PROTECTION OF CONTRACTUAL RIGHTS Off-Plan Sale Contracts in Saudi Arabia: Key Clauses and Legal Risks An off-plan property sale contract is a legally significant agreement when purchasing a real estate unit before its construction or development has been completed in Saudi Arabia. The purchaser contracts for a property to be delivered in the future according to agreed plans and specifications. The developer assumes obligations concerning construction, delivery, and the relevant contractual and regulatory requirements. Ambiguity in contract terms, payment schedules, handover dates, or property specifications can create serious financial and legal disputes. A Saudi off-plan sale agreement should clearly identify the unit, purchase price, payment schedule, construction and delivery period, delay consequences, compensation, warranties, termination provisions, and common-property rights, subject to applicable law. Atyar Advocates & Legal Consultants provides legal services involving real estate contract drafting and review, contractual obligations, development agreements, guarantees, and dispute assessment. Off-Plan Sale Contract Purchaser Rights Delivery Delays Contract Termination Reviewing off-plan property sale contracts, payment obligations, delivery terms, purchaser rights, and contractual risks in Saudi Arabia. What Is an Off-Plan Sale Contract in Saudi Arabia? An off-plan sale contract is an agreement governing the sale of a property unit or other real estate asset covered by the applicable framework before its development has been completed. Unlike the purchase of completed real estate, construction and delivery may take place after signing. This makes project timelines, property specifications, payment obligations, and legal safeguards particularly important. Quick Legal Answer: An off-plan sale contract identifies the property, purchase price, instalments, completion and handover periods, delay consequences, contractual guarantees, and termination rights in accordance with applicable Saudi law. Is There a Standard Off-Plan Sale Contract in Saudi Arabia? Article 20 of the Implementing Regulations addresses the standard off-plan sale contract for the property categories falling within its scope. The provision includes particular treatment for real estate registered under the Real Estate Registration Law. The standard contract addresses payment schedules, late-payment obligations, compensation for developer delay, the project completion period, extensions, and common ownership. Legal Note: Amendments to the standard contract are subject to approval by the competent authority where such approval is required by the applicable Regulations. 12 Essential Clauses in an Off-Plan Property Sale Contract Developers and purchasers should review the following contractual issues before signing, taking into account the project’s nature, licences, and annexes. 01 Contracting Parties Identify the purchaser, developer, their legal capacities and signing powers, and the relationship with the landowner where applicable. 02 Property Unit Description Specify the unit’s number, location, area, components, specifications, floor plans, and contractual annexes. 03 Purchase Price and Payment Schedule Define the full price, instalment amounts, payment dates, conditions for payment, and the authorised payment procedure. 04 Project Completion Period Identify construction milestones, the planned completion date, and extensions permitted under applicable law. 05 Delivery and Handover Specify the handover date, inspection process, acceptance procedures, and documentation of outstanding defects. 06 Purchaser Payment Default Address late instalments, notices, contractual consequences, and remedies permitted by the governing provisions. 07 Developer Delivery Delay Examine compensation, fair market rent where applicable, termination rights, and other delay-related legal consequences. 08 Changes to Specifications Clarify when the unit’s area, design, materials, or specifications may change and which approvals are required. 09 Construction Warranties and Defects Review construction quality obligations, warranties, defect notification procedures, and remedial responsibilities. 10 Common Ownership Address shared facilities, common areas, ownership rights, management responsibilities, and associated obligations. 11 Termination and Rescission Identify termination grounds, necessary notices, legal procedures, and financial consequences for the contracting parties. 12 Dispute Resolution Review the competent legal forum, permitted resolution mechanisms, notices, and supporting evidence requirements. What Does Article 20 of the Implementing Regulations Address? Article 20 is a key reference when reviewing the standard sale contract under the applicable Saudi off-plan framework. Contract Clause Legal Purpose Payment Schedule Defines instalment amounts and due dates. Purchaser or Tenant Delay Addresses the consequences of late payment. Developer Delay Addresses compensation, fair market rent and termination where applicable. Project Completion Period Defines completion periods and permitted extensions. Common Ownership Addresses rights and duties connected with shared property. Project Distress Addresses acknowledgement of the authority’s power to appoint a replacement developer where permitted. The application of these provisions should be assessed according to Article 20, the category of property, the project’s legal status, and the applicable registration requirements. How Should an Off-Plan Sale Contract Structure Instalment Payments? The payment schedule should clearly identify the total purchase price, individual instalments, their due dates, and the authorised payment method. Payment provisions should also be consistent with the requirements governing the relevant project’s escrow arrangements. Contract Review Question: Can the purchaser determine how much is payable, when the instalment becomes due, why it is payable, and how payment will be recorded? What Are the Purchaser’s Rights if the Developer Delays Delivery? Saudi off-plan legislation addresses a developer’s delay in delivery and the legal consequences that may arise. Depending on the applicable provisions, the type of property, and the circumstances, rights may involve compensation, fair market rent, or other contractual remedies. A legal assessment should review the contractual delivery date, actual construction progress, reasons for delay, correspondence, contractual exceptions, and supporting evidence. Important: Compensation should not be presented as one fixed amount applicable to every delayed off-plan development. Can a Developer Change the Unit’s Area or Specifications? A developer’s ability to alter a unit’s area, design, materials, or specifications should not be treated as unrestricted. Proposed changes should be reviewed against the contract, annexed plans, required approvals, and the purchaser’s legal rights. Technical Changes Assess whether the proposed modification is consistent with the approved development plans and applicable project requirements. Contractual Consequences Consider the impact on unit area, agreed specifications, purchase consideration, and the parties’ contractual rights. What Are the Main Legal Risks of Signing an Off-Plan Sale Contract? Unclear Project Authorisation Failure to verify the developer’s status, project licence, and authorised activities. Incomplete Unit Description Missing approved plans, insufficient specifications, or unclear measurements.

LEGAL EXPERTISE | REAL ESTATE DEVELOPMENT AND PROJECT FINANCIAL COMPLIANCE Escrow Accounts in Saudi Off-Plan Projects: Rules and Responsibilities An escrow account is an important legal and financial safeguard under Saudi Arabia’s off-plan property development regulatory framework. Developers may receive purchaser payments, reservation amounts, and project financing before construction is complete. Saudi law regulates how qualifying funds are deposited, managed, and withdrawn. An off-plan escrow account is a dedicated bank account for a regulated real estate project. Withdrawals must follow the applicable legal requirements, supported by the necessary documents and professional approvals. Atyar Advocates & Legal Consultants provides legal advisory services involving real estate development agreements, investment structures, contractual guarantees, and legal risk assessment. Saudi Real Estate Escrow Off-Plan Sales Withdrawal Controls Developer Obligations Project escrow accounts, financial oversight, and controlled withdrawals in Saudi off-plan real estate developments. What Is an Escrow Account in a Saudi Off-Plan Project? An escrow account is a bank account established specifically for a real estate project, into which qualifying funds are deposited by purchasers, tenants, or financiers in accordance with Saudi law. The framework provides for an independent account for each real estate project covered by the applicable rules. This separates the project’s funds from the developer’s other business activities. Quick Legal Answer: A Saudi off-plan escrow account is not a general corporate operating account. It is dedicated to a licensed project and subject to statutory deposit, withdrawal, and supervision requirements. What Is the Legal Basis for Off-Plan Escrow Accounts in Saudi Arabia? Articles 9 through 14 of Saudi Arabia’s Law of Selling and Leasing Off-Plan Real Estate Projects establish key requirements concerning project accounts, deposits, withdrawals, expenditure limitations, surplus funds, and post-completion safeguards. The Implementing Regulations provide further details concerning the bank agreement, withdrawal documentation, and the responsibilities of the developer, engineering consultant, and legal accountant. Official Legal Reference: Law of Selling and Leasing Off-Plan Real Estate Projects . When Is an Off-Plan Escrow Account Established and Activated? Article 9 provides for an independent escrow account in the name of each relevant real estate project. Activation is linked to obtaining the relevant project licence and recording the applicable notation on the property’s registered title, in accordance with the Law. 01 Account Establishment Prepare the banking arrangements and dedicated account agreement for the project. 02 Account Activation Fulfil the applicable licensing, title, and legal requirements before using the account. What Funds Must Be Deposited Into the Escrow Account? The account holds relevant project funds in accordance with the Law, contracts, and applicable project authorisation. Purchaser payments for covered property units. Tenant payments covered by the regulatory framework. Financing obtained for the licensed project. Reservation amounts subject to marketing-licence conditions. Qualifying funds associated with project agreements. Deposits requiring identification by unit or transaction reference. Project financing obtained by the developer or landowner for the licensed development is subject to the escrow deposit requirements established by the Law. Can Escrow Funds Be Used for Another Property Development? The escrow account is dedicated to the licensed project. The funds must not be used to finance unrelated developments contrary to the governing restrictions. Article 10 also contains protection against attachment of escrow funds for the developer’s creditors. Core Principle: Developers should separate the funds of individual projects rather than treating escrow balances as general business liquidity available for other investments. Who Is Responsible for Managing an Off-Plan Escrow Account? Responsibilities are distributed between the developer, bank, engineering consultant, legal accountant, and the competent regulatory authority. 01 Real Estate Developer Prepares withdrawal requests, maintains documentation, and uses project funds for permitted purposes. 02 Escrow Bank Operates the account, processes permitted transfers, and follows the contractual and regulatory restrictions. 03 Engineering Consultant Reviews relevant technical matters and participates in certifying withdrawal documentation. 04 Legal Accountant Reviews financial documentation, expenditure limits, and certifications within the applicable professional scope. 05 Real Estate General Authority Exercises the regulatory and supervisory functions assigned under the applicable framework. How Are Withdrawals Made From an Off-Plan Escrow Account? Article 11 requires withdrawal documentation signed by the developer, engineering consultant, and legal accountant, subject to the special rules governing exceptional circumstances. The supporting documentation must satisfy the relevant professional and regulatory requirements. 1. Identify the Project Expense Confirm that the proposed expenditure relates to the licensed development. 2. Prepare Supporting Documents Assemble the relevant invoices, payment certificates, and project records. 3. Issue the Withdrawal Request The developer prepares the request stating the amount and justification for payment. 4. Obtain Consultant Review The engineering consultant reviews the relevant technical aspects of the expense. 5. Obtain Accountant Certification The legal accountant verifies the applicable financial requirements and limits. 6. Submit to the Bank The certified withdrawal documentation is submitted for processing. 7. Process the Payment The bank executes the permitted payment under the relevant account restrictions. 8. Maintain Transaction Records Preserve documentation for financial review, regulatory monitoring, and contractual records. The developer cannot assume an unrestricted unilateral right to withdraw money from a regulated project escrow account. What Must the Escrow Agreement With the Bank Include? Article 26 of the Implementing Regulations establishes requirements for the agreement between the developer and the escrow bank. An independent account for each project. Account denomination in Saudi riyals. Spending limited to the project. Specified withdrawal documentation and procedures. Payments by permitted cheques or bank transfers. Deposit references identifying relevant property units. Account statements available to the authority on request. Restrictions on closing the account without approval. No ATM or credit cards issued for the account. Compliance with further applicable banking restrictions. Can Marketing and Administrative Expenses Be Paid From Escrow? Article 12 allows developers to request payment of qualifying administrative, marketing, and other non-construction expenses associated with the licensed project. 20% Statutory Expenditure Limit Aggregate non-construction expenses are limited to 20% of the total value of property units sold, subject to the statutory calculation rules. 02 Verification and Certification The legal accountant verifies compliance with the relevant expenditure limit, while normal supporting documentation and certification requirements continue to apply. Important: The

LEGAL EXPERTISE | REAL ESTATE DEVELOPMENT AND REGULATORY LICENSING Off-Plan Sales Licence in Saudi Arabia: Legal Requirements and Compliance Steps Obtaining an off-plan property sales licence in Saudi Arabia is an essential regulatory consideration for developers intending to sell qualifying units before project completion. The licensing process involves more than submitting an electronic application. Developers must review legal eligibility, land ownership, architectural documentation, financial arrangements, project escrow, and contractual obligations. To obtain an off-plan project sales licence, a developer must satisfy the relevant registration requirements, prepare the necessary documents, apply through the authorised regulatory channels, and comply with the conditions of the licence issued. Atyar Advocates & Legal Consultants provides legal services involving real estate development agreements, property rights, investment structures, contractual safeguards, and assessment of legal and regulatory risks. Off-Plan Sales Licence REGA Licensing Project Escrow Real Estate Compliance Off-plan real estate licensing, development documentation, and regulatory compliance in Saudi Arabia. What Is an Off-Plan Sales Licence in Saudi Arabia? An off-plan sales licence is a project-related regulatory authorisation under Saudi Arabia’s Law of Selling and Leasing Off-Plan Real Estate Projects. It governs the licensed activities for selling qualifying property units or developed land before completion, subject to the applicable licence and legal requirements. The activity is regulated under the supervision of the Real Estate General Authority (REGA). Quick Answer: Off-plan project licensing requires appropriate developer registration, land and technical documents, financial information, relevant escrow arrangements, and approval for the intended development activity. Developer Registration vs Marketing Licence vs Sales Licence 01 Developer Registration Establishes the developer’s relevant eligibility and qualification to undertake the activities regulated by the Law. 02 Project Marketing Licence Authorises specified promotional activities before full project licensing, subject to its terms, validity and conditions. 03 Off-Plan Sales Licence Concerns the project and the authorised sales or leasing activity after the relevant requirements are fulfilled. Key Distinction: Registration concerns the developer, the marketing licence controls permitted advertising, and the sales licence relates to the authorised project activity. Which Authority Issues Off-Plan Sales Licences? The Real Estate General Authority supervises and regulates off-plan real estate sales and leasing in Saudi Arabia under the applicable Law and Implementing Regulations. Its electronic services support developer registration, project licence applications, and related regulatory procedures. Official Reference: REGA — Off-Plan Sales and Leasing Services . What Are the Legal Requirements for an Off-Plan Sales Licence? Exact requirements depend on the licence category and project circumstances. They can be considered across six principal areas. 01 Developer Eligibility Registration, qualification, commercial records, and relevant legal documentation. 02 Land Ownership Title deed, property rights, restrictions, and development agreements where applicable. 03 Engineering Documentation Building-related approvals, architectural plans, engineering designs, and required permits. 04 Financial Feasibility Project cost estimates, financing, expected expenditure, and completion planning. 05 Escrow Arrangements Dedicated project accounts, deposit controls, financial oversight, and relevant supervision. 06 Contracts and Obligations Rights and duties of developers, landowners, contractors, consultants, and purchasers. What Documents Are Required for an Off-Plan Sales Licence? The Law and Implementing Regulations specify documentation associated with developer eligibility and project licensing. Document Purpose Valid commercial registration Establish developer identity and business activity. Chamber of Commerce membership Addresses relevant developer documentation requirements. Credit report Provides the required credit information. Land title documentation Identifies ownership and property rights. Development agreement, if applicable Establishes landowner and developer authority. Architectural and engineering drawings Defines the proposed project and units. Building permits and approvals Addresses relevant construction requirements. Project feasibility study Supports financial, construction and marketing assessment. Financing and delivery information Explains anticipated funding and completion timing. Escrow and oversight arrangements Addresses project financial controls and supervision. The final documentation depends on the type of project, licence category, and applicable regulatory requirements. Eight Steps to Obtain an Off-Plan Sales Licence in Saudi Arabia The licensing procedure generally involves the following stages, subject to the applicable project category. Step 1: Verify Developer Registration Confirm registration, qualification, and eligibility under the relevant rules. Step 2: Identify the Licence Category Determine whether the application concerns marketing, off-plan sales, leasing, or another applicable project category. Step 3: Prepare Project Documents Review land ownership, development rights, engineering designs, required approvals, and supporting records. Step 4: Complete Financial and Technical Requirements Prepare project feasibility, financing information, escrow arrangements, and required professional oversight. Step 5: Submit the Electronic Application Use the official REGA services to enter project information, attach documents, and complete declarations. Step 6: Address Regulatory Observations Monitor the application and provide supplementary records or clarifications requested by the authority. Step 7: Review the Issued Licence Confirm its validity, category, authorised scope, and any applicable conditions. Step 8: Maintain Compliance After Approval Continue to address escrow, reporting, project execution, supervision, and delivery obligations as required. Submitting a complete application does not guarantee that a licence will be granted. The licensing decision remains with the authority. How Do You Apply for an Off-Plan Sales Licence Online? An application is submitted through the electronic services authorised by REGA. The process generally includes accessing the service, selecting the licence category, creating an application, completing the project details, uploading required documents, submitting declarations, and monitoring application status. Official Application Service: REGA — Off-Plan Sales and Leasing . Follow the current portal instructions and applicable service requirements. What Are the Requirements for a Project Marketing Licence? Article 8 of the Implementing Regulations permits a developer to request a marketing licence before obtaining the full project licence. Specified marketing application information includes: Registered land title deed number. Marketing contract number, where applicable. Development agreement with the landowner, if applicable. Architectural designs and engineering plans. Important: A marketing licence does not replace the full sales licence where that authorisation is required for the activity. Can Reservation Fees Be Collected Under a Marketing Licence? Article 10 of the Implementing Regulations establishes requirements for collecting reservation amounts during the marketing licence period. 01 Project Disclosure Disclose the project’s status and future plans to prospective purchasers. 5% Reservation Limit Do not collect more than 5% of the relevant property’s unit value.

LEGAL EXPERTISE | REAL ESTATE DEVELOPMENT AND PRE-LAUNCH REGULATORY COMPLIANCE Saudi Off-Plan Sales Law: Developer Obligations Before Project Launch Launching an off-plan property development in Saudi Arabia marks the transition from project planning, design, and financing to marketing, reservations, and purchaser agreements. Before advertising units or accepting reservations, the developer must consider the applicable registration, project licensing, land ownership, construction plans, development agreements, financing, and escrow requirements. Owning land, preparing architectural drawings, or holding a commercial registration does not automatically authorise a developer to sell property off-plan. The relevant regulatory approvals must be obtained for the intended activity. Atyar Advocates & Legal Consultants provides legal services involving real estate investment and development structures, property ownership review, agreement drafting, and assessment of legal and contractual risks before binding commitments are made. Saudi Off-Plan Sales Law Developer Obligations Wafi Licensing Project Escrow Legal and regulatory preparations before launching an off-plan real estate development project in Saudi Arabia. What Must a Developer Do Before Launching an Off-Plan Project? A real estate developer’s obligations begin before the first property advertisement, reservation, or sales agreement. Important areas of review include developer registration, project authorisation, land and development rights, project documentation, financing, escrow, and purchaser-related obligations. Quick Legal Answer: Before launching an off-plan project in Saudi Arabia, verify developer registration, the appropriate marketing and sales licences, legal rights over the land, approved plans, funding, escrow arrangements, and purchaser contracts. Complete developer registration requirements. Identify the correct project licence. Obtain appropriate marketing authorisation. Review land ownership and development rights. Prepare development agreements where necessary. Complete required plans, approvals, and studies. Arrange project financing and escrow. Review purchaser contracts and payment terms. Organise contractor and consultant responsibilities. Plan completion, delivery, and regulatory monitoring. Obligation 1: Complete Developer Registration Before Undertaking Off-Plan Activities Article 3 of Saudi Arabia’s Law of Selling and Leasing Off-Plan Real Estate Projects regulates registration of developers before undertaking the relevant off-plan activities. A developer should confirm that the required registration and qualification requirements are satisfied and that the intended activities are compatible with the relevant regulatory permissions. Important: A commercial registration for a real estate business does not necessarily replace the separate registration and project licensing requirements for off-plan sales. Obligation 2: Identify the Correct Marketing and Sales Licences Developers should distinguish between authorisation to market a proposed real estate project and the licence required to undertake full off-plan sales or leasing activities. 01 Project Marketing Licence This permits specified marketing activities under its conditions before the complete off-plan project licensing process has been finalised. 02 Full Sales or Leasing Licence This authorises the relevant off-plan project activities after the applicable project, technical, and financial requirements have been satisfied. Key Question: Does the developer’s existing authorisation permit advertising only, or does it also permit the proposed contracts and financial transactions? Obligation 3: Review Advertising Compliance Before Launching Marketing Campaigns The regulatory framework applies to marketing an off-plan project, including advertising through websites, digital platforms, real estate brokers, and property exhibitions. Before publishing advertisements, the developer should review project descriptions, unit details, drawings, specifications, pricing, delivery information, and reservation conditions. Review property listing pages. Examine digital advertising campaigns. Verify the accuracy of project information. Review broker and exhibition materials. Check published reservation terms. Confirm the permitted licence scope. Marketing readiness does not independently establish regulatory authorisation. Advertising must remain within the scope of the applicable project licence. Obligation 4: Review Land Ownership and Development Rights The legal status of the development site is an important element of project readiness. The review should address title information, land description, area, relevant rights and restrictions, and the developer’s legal authority to undertake the intended works. Land Title Review Examine the title records, boundaries, property area, ownership details, and rights or restrictions that could affect development. Development Agreement Where the developer does not own the land, regulate the parties’ development authority, funding obligations, project phases, approvals, returns, and contractual responsibilities. Obligation 5: Prepare Engineering Plans, Approvals, and Financial Studies Developers should prepare the technical, financial, and regulatory documents required for the relevant project licensing procedure. 1. Architectural and Engineering Plans Define the project, property units, design specifications, and relevant approved drawings. 2. Building Permits and Approvals Review the permits, project authorisations, and construction requirements applicable to the development. 3. Project Feasibility Study Address financial, construction, and marketing projections, expected costs, funding sources, and delivery timing. 4. Construction and Delivery Programme Establish planned project phases, milestones, resources, responsibilities, and completion targets. The preparation of a commercially viable business plan does not replace the technical and regulatory requirements of the relevant licence. Obligation 6: Establish Project Escrow and Financial Controls Saudi off-plan real estate legislation establishes project-specific escrow arrangements for real estate developments covered by the relevant provisions. Developers should review the account’s establishment, its relationship to the licensed project, purchaser payment deposits, permitted withdrawals, financial supervision, and reporting obligations. Establish the required project-specific account. Organise purchaser payment deposits. Review withdrawal and payment controls. Connect permitted spending to project needs. Maintain financial reports. Preserve accounting and transaction records. Core Principle: Funds belonging to a licensed project must not be diverted to unrelated projects contrary to the governing escrow requirements. Obligation 7: Comply With Reservation Payment Rules Article 10 of the Implementing Regulations addresses the conditions for receiving reservation fees during a project marketing licence period. 5% Reservation Fee Limit Where reservation payments are permitted during the marketing licence stage, the collected amount must not exceed 5% of the relevant unit’s value. 02 Disclosure and Escrow The developer must satisfy the relevant disclosure conditions and deposit the collected reservation amounts into the designated escrow account. The Regulations also address repayment of reservation amounts where the marketing licence expires without the required project licence being obtained. A project marketing licence does not give unrestricted permission to carry out all sales and payment collection activities. Obligation 8: Review Purchaser Contracts Before Offering Units Purchaser agreements should be reviewed before being offered to prospective buyers, taking into account approved forms, licensing conditions, and applicable

LEGAL EXPERTISE | REAL ESTATE DEVELOPMENT, LICENSING AND CONTRACTS Off-Plan Property Sales in Saudi Arabia: A Legal Guide for Real Estate Developers Off-plan property sales are an important model of real estate development in Saudi Arabia, allowing developers to sell property units before the project has been completed, subject to applicable licences and regulatory requirements. However, developing an off-plan property project involves more than preparing architectural plans or signing agreements with purchasers. It also involves licensing, land ownership, development agreements, escrow accounts, construction obligations, delivery requirements, and purchaser protection. A real estate developer must verify the applicable registration, project licence, and authorised scope of activity before marketing or undertaking off-plan sales under the relevant Saudi regulations. Atyar Advocates & Legal Consultants provides legal services concerning real estate investment and development structures, contract drafting, contractual responsibilities, and legal risk assessment. Off-Plan Property Sales Wafi Licensing Escrow Accounts Real Estate Development Contracts Off-plan property sales in Saudi Arabia: project licensing, escrow accounts, real estate contracts, and developer obligations. What Are Off-Plan Property Sales in Saudi Arabia? Off-plan property sales involve selling real estate units or developed land within a project before the relevant development has been completed, according to agreed plans, designs, and specifications. The activity is governed by Saudi Arabia’s Law of Selling and Leasing Off-Plan Real Estate Projects and its Implementing Regulations, under the supervision of the Real Estate General Authority. Quick Legal Answer: Off-plan sales are regulated real estate transactions involving property sold before project completion. Developers must satisfy the applicable requirements concerning licensing, contracts, escrow accounts, execution, and delivery. Off-Plan Property Sales vs Completed Property Sales 01 Buying a Completed Property The property already exists and can generally be inspected before the transaction, allowing the purchaser to assess its current condition and specifications. 02 Buying Property Off-Plan The purchaser relies on approved plans, property specifications, the construction schedule, and the developer’s future delivery obligations. This makes contractual disclosures, payment arrangements, change procedures, warranties, and completion dates especially important. Which Law Governs Off-Plan Property Sales in Saudi Arabia? The Law of Selling and Leasing Off-Plan Real Estate Projects and its Implementing Regulations govern the relevant activity. The Real Estate General Authority supervises licensing, regulation, and compliance within its statutory powers. Developer registration and qualification. Project licensing. Marketing and advertising controls. Land ownership and development documentation. Separate project escrow accounts. Payment and fund withdrawal controls. Technical and financial supervision. Construction and delivery obligations. Delay and violation-related provisions. Reporting and regulatory compliance. Official Regulatory Resource: Real Estate General Authority — Wafi Off-Plan Sales and Leasing . Can Developers Advertise an Off-Plan Project Before Licensing? Article 3 of the Law establishes developer registration requirements and restricts advertising, promoting, or exhibiting off-plan projects without the relevant project licence. The Real Estate General Authority provides a marketing licence route, which has a different scope and requirements from a complete off-plan sales or leasing licence. Important for Developers: Before marketing a project, confirm whether the applicable authorisation permits marketing only or also permits concluding sales and collecting money under the required conditions. What Are the Requirements for an Off-Plan Sales Licence? Licensing documentation and conditions differ according to the project and the applicable procedure. Common areas of review include: 1. Developer Registration and Commercial Activity Verify the required developer registration, qualification, and commercial authorisation to undertake the proposed activity. 2. Land and Title Documentation Review the property’s title deed, ownership, relevant rights, restrictions, and the developer’s authority. 3. Building Permit and Project Plans Prepare the engineering documentation, approved designs, building permits, and other required approvals for the particular project. 4. Development Agreement Where Applicable Regulate the developer’s relationship with the landowner or holder of relevant development rights. 5. Financial Arrangements and Escrow Satisfy project-specific financial requirements and the applicable escrow account conditions. 6. Professional Supervision Requirements Address requirements concerning the engineering consultant, certified accountant, and other professionals involved in project oversight. This is an illustrative licensing review, not an exhaustive checklist. The developer should confirm the requirements currently applicable to the relevant licence category. Why Are Land Ownership and Development Agreements Important? Developers should verify the legal details of the property, including title, ownership, relevant rights, and restrictions affecting development or disposition of the land. Where the developer is not the landowner, an appropriate agreement should regulate the parties’ authority, funding commitments, permits, development duties, returns, and liabilities. Land Title Review the legal description of the property, ownership documents, relevant rights, and restrictions. Development Agreement Define the development scope, financial contributions, project phases, guarantees, default provisions, and termination consequences. What Is an Escrow Account for Off-Plan Property Projects? An escrow account is a bank account specifically established for a real estate project, into which relevant funds from purchasers, lessees, or financing sources are deposited according to the regulations. The Law requires separate escrow arrangements for each covered project. The use and withdrawal of project funds are subject to applicable controls. Key Principle: A project escrow account should not be treated as a general operating account for unrelated real estate projects or purposes contrary to the relevant regulations. How Do Purchaser Payments Work in Off-Plan Projects? The Real Estate General Authority explains that payments for off-plan units are associated with the project’s escrow account, engineering completion percentages, and the agreed payment schedule. The sales contract should specify the amounts, payment dates or milestones, and the relevant financial obligations of the purchaser. During the marketing licence stage, reservation payments may be permitted under specific conditions. REGA describes a limit of 5% of the unit value for that route, together with relevant disclosure and escrow deposit requirements. What Clauses Should an Off-Plan Sales Contract Include? 01 Property Identification Identify the unit location, number, area, plans, specifications, and associated rights. 02 Price and Payment Schedule Address the purchase price, payment obligations, authorised account, and applicable payment mechanism. 03 Completion and Delivery Define completion dates, handover procedures, notices, and consequences of delay. 04 Changes and Specifications Regulate modifications to design, area, or specifications under the applicable contract and law.

LEGAL EXPERTISE | CONSTRUCTION DISPUTES AND PRE-LITIGATION CLAIM ASSESSMENT Developer–Contractor Disputes in Saudi Arabia: Assessing Claims Before Escalation Disputes between real estate developers, project owners, and contractors can arise during construction due to delays, unpaid payment certificates, additional works, defective performance, or disagreements over contractual compensation. However, the emergence of a dispute does not necessarily mean that litigation or arbitration should begin immediately. A claim may have a valid contractual basis but lack essential technical, financial, or documentary evidence. Early legal assessment may also identify opportunities for negotiation and settlement before costly proceedings begin. Assessing a construction claim before escalation involves reviewing legal entitlement, supporting evidence, liability, causation, claimed amounts, possible defences, procedural risks, and settlement opportunities. Atyar Advocates & Legal Consultants provides legal services involving developer–contractor disputes, construction claim assessment, contractual evidence, negotiation, litigation, and arbitration. Construction Disputes Claim Assessment Negotiation & Settlement Litigation & Arbitration Legal assessment of developer–contractor disputes in Saudi Arabia before negotiation, litigation, or arbitration. What Is Construction Claim Assessment? Construction claim assessment is a legal, technical, and financial review of a claim arising under a construction or engineering contract. The objective is to determine whether the claim has an identifiable contractual or legal basis, whether the available evidence supports the alleged breach, and which dispute-resolution approach may be appropriate. The assessment also considers potential counterclaims, available defences, the cost of escalation, and whether any eventual financial recovery can be enforced. Quick Answer: Before escalating a developer–contractor dispute, review the contract, identify the alleged breach, analyse liability, verify the evidence, evaluate financial exposure, and compare negotiation, settlement, litigation, and arbitration options. What Causes Disputes Between Developers and Contractors? 01 Construction Delays Disagreements over the causes of delay, responsibility, extensions of time, completion dates, delay damages, and prolongation costs. 02 Delayed or Unpaid Payment Certificates Claims for completed works and objections concerning certification, quantities, deductions, approvals, or performance requirements. 03 Variations and Additional Works Disputes about changes to project scope, authority to issue instructions, contractual approvals, and valuation of additional works. 04 Defects and Nonconforming Work Disagreements relating to quality, specifications, correction costs, completion certificates, and project handover. 05 Compensation and Liquidated Damages Claims concerning delayed completion, contractual breach, responsibility, and calculation of agreed compensation. 06 Retention Money and Guarantees Disputes involving retention releases, performance guarantees, final certificates, and financial security obligations. 07 Suspension or Contract Termination Claims arising from suspension, withdrawal, termination, completed works, remaining obligations, and financial consequences. Eight Steps to Assess a Construction Claim Before Escalation 01 Review the Construction Contract Examine the agreement, amendments, Particular Conditions, scope of works, payment requirements, notice procedures, and dispute-resolution provisions. Identify the governing law and competent forum. 02 Separate and Classify the Claims Distinguish unpaid certificates, additional works, retention, extensions of time, damages, and prolongation costs. Each claim requires its own contractual and evidentiary basis. 03 Identify Breach and Responsibility Establish the obligation allegedly breached, the responsible party, the relevant events, and whether the claimant’s conduct contributed to the circumstances. 04 Examine Notices and Correspondence Review claim notices, official letters, meeting minutes, approvals, objections, releases, and previous settlements. Consider the legal effects of any missed notice requirements. 05 Analyse Technical Evidence Examine drawings, project schedules, quantities, site reports, completion records, inspection results, and specialist findings when needed. 06 Verify Claim Values and Causation Check calculations, previous payments, deductions, completed works, alleged losses, and whether the claimed consequences are connected to the breach. 07 Review Defences and Counterclaims Consider arguments based on defects, delay responsibility, disputed approvals, partial payments, contractual conditions, and previous settlements. 08 Select the Appropriate Strategy Compare additional evidence collection, negotiation, mediation, settlement, litigation, and arbitration according to the contract and the surrounding circumstances. What Documents Are Needed to Evaluate a Construction Dispute? The relevant evidence depends on the type of claim and the contract. Common documents include: Document Purpose of Review Construction Contract and Amendments Identify contractual rights, obligations, and claim procedures. Scope of Works and Specifications Establish the agreed deliverables and performance requirements. Construction Programme and Updates Assess project delays and extensions of time. Payment Certificates and Records Identify outstanding amounts and disputed payments. Variation Orders Document changes, instructions, and approvals. Site Reports Establish actual progress and relevant site events. Notices and Correspondence Record claims, objections, and contractual communications. Meeting Minutes Document project decisions and instructions. Inspection and Completion Records Examine defects, acceptance, and completion issues. Retention and Guarantee Records Assess financial security and release obligations. Technical and Financial Reports Support liability, causation, and claim valuation. Settlement Agreements and Releases Determine the effect of previous agreements. Not every document will be required for every dispute. The necessary evidence depends on the specific claims, contractual requirements, and factual circumstances. How Do You Evaluate the Strength of a Construction Claim? A practical pre-escalation assessment can be organised around five key areas. 01 Legal Entitlement Does the contract or applicable law support the claimed right? 02 Strength of Evidence Are reliable documents available to establish the relevant events? 03 Liability and Causation Can the alleged breach and its consequences be connected to the other party? 04 Claim Valuation Is the claimed amount properly calculated and supported by evidence? 05 Risks and Procedures What defences, time limits, costs, delays, and enforcement issues may affect the claim? Professional Consideration: This framework does not produce a guaranteed litigation success rate. Outcomes depend on the evidence, applicable legal requirements, parties’ arguments, and the competent decision-maker. When Is Negotiation or Settlement Better Than Litigation? Negotiation may be appropriate when certain payments are undisputed, the parties wish to preserve an ongoing construction project, or a practical agreement could resolve outstanding obligations. Payment Arrangements Agreeing on specified amounts, payment milestones, and clearly documented settlement obligations. Completion of Remaining Works Defining outstanding works, completion dates, project responsibilities, and acceptance requirements. Resolution of Claims Identifying which damages, variations, deductions, retention amounts, or guarantees are being settled. Before signing a settlement agreement or release, the parties should review which rights and claims are included, reserved, or waived. When Should a Construction Dispute Proceed to