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Case Study
Drafting a Real Estate Investment and Development Agreement Exceeding SAR 800 Million in Makkah
Dispute Value
SAR 800 million
High-value real estate projects require a comprehensive legal framework governing acquisition, ownership transfer, development, financial obligations, risk allocation, termination rights, and dispute resolution.
In this matter, Atyar Advocates and Legal Consultants provided legal services to a private client for the acquisition and development of a property in Makkah, with an investment value exceeding SAR 800 million.
The scope included legal advice, preparation of a legal study, and drafting the investment agreement regulating acquisition, development, implementation phases, financial commitments, safeguards, and consequences of delay or non-performance, while maintaining client and project confidentiality.
Quick Matter Overview
Investment Value
More than SAR 800,000,000
Project Location
Project Location
Nature of the Transaction
Acquisition, development, and investment of a real estate asset
Subject of the Investment
Implementation of a high-value real estate investment and development project
Applicable Legal Framework
Relevant Saudi real estate, investment, and contractual laws
Scope of Legal Services
Legal advice, comprehensive legal study, and drafting of the investment agreement
Background of the Real Estate Investment and Development Project
The matter involved a high-value investment project for the acquisition and development of a property in Makkah, exceeding SAR 800 million in value.
Due to the scale and complexity of the transaction, it required a structured legal review covering ownership, acquisition structure, transfer of title, development phases, financing, implementation, and risk allocation.
Atyar Advocates and Legal Consultants advised the client on the legal structure, assessed key risks and obligations, and drafted an investment agreement establishing a clear framework for the property acquisition and development.
Investment Value
Subject of the Transaction
Property Acquisition & Development
Investment & Development Site
Makkah, Saudi Arabia
Applicable Laws and Regulations
Saudi Real Estate Laws
Nature of the Investment Transaction
The transaction combined the acquisition of a high-value real estate asset with its development and investment within a single project. This required the parties’ legal relationship to be regulated from the negotiation stage through acquisition, transfer of ownership, development, implementation, completion, and handover.
The principal legal matters associated with the transaction included:
- Identifying the property and its principal legal particulars
- Reviewing ownership documents and rights affecting the property
- Regulating the terms for acquiring the real estate asset.
- Defining the purchase consideration and payment timetable
- Regulating the transfer-of-ownership procedure
- Defining the scope of the development works
- Structuring the project phases and implementation timetable.
- Allocating responsibility for financing and performance
- Distributing risks and liabilities between the parties
- Regulating licences and regulatory approvals.
- Governing the engagement of developers, contractors, and consultants
- Establishing procedures for approving works and variations.
- Regulating project costs and additional expenditure
- Establishing legal and financial safeguards
- Addressing delay and non-performance
- Regulating default, rescission, and termination
- Protecting confidential information and documents
- Establishing a clear dispute resolution mechanism
Essential Elements of the Real Estate Investment and Development Agreement
Real Estate Asset Information
Defining the location, area, description, ownership particulars, and any rights or restrictions capable of affecting the acquisition, development, or investment of the property.
Acquisition Terms and Transfer of Ownership
Regulating the purchase price, payments, deadlines, conditions precedent, required documents, and the procedures for transferring and documenting ownership.
Development Scope and Implementation Phases
Defining the nature of the project and the planning, design, development, construction, fit-out, completion, and handover works, while dividing the project into clearly structured phases.
Financing and Project Costs
Regulating funding sources, the parties’ contributions, payment obligations, project costs, additional expenditure, and the procedures for approving and paying such amounts.
Safeguards, Default, and Termination
Establishing legal and financial safeguards and defining events of default, notice and cure procedures, remedies, and the consequences of rescission or termination.
Dispute Resolution and Confidentiality
Establishing a clear dispute resolution mechanism and regulating confidentiality to protect the client, property, project, and sensitive financial and commercial information.
Key Legal Challenges
High Investment Value
The project value exceeded SAR 800 million, requiring clear regulation of financial obligations, payment arrangements, and liability for delay or non-performance, while defining each party’s responsibility for financing, payments, and additional costs.
Integration of Property Acquisition and Development
The transaction involved the acquisition, development, and investment of the property. The agreement governed each stage while defining the parties’ obligations and legal consequences.
Verification of Ownership and Property Rights
The transaction required reviewing ownership documents and any rights affecting the property, while allocating responsibility for the accuracy of property information, documents, and disclosures.
Defining the Scope of Development Works
The project required clear regulation of the planning, development, construction, and handover works. It also defined each party’s responsibilities and the procedure for approving changes to the project scope.
Structuring Financing and Project Costs
The transaction defined funding sources, payment schedules, and responsibility for cost increases, while linking financial obligations to project milestones and delayed funding.
Allocation of Project Risk
The project involved risks relating to ownership, licences, financing, costs, delays, and performance. The agreement allocated responsibility for each risk and defined the consequences and available remedies if it materialised.
Regulation of Licences and Approvals
The matter assessed the investment manager’s compliance with agreed authority and disclosure duties, and liability for unauthorised decisions or inadequate disclosure.
Control of Implementation Phases and Timetable
The development works were divided into defined phases, with the contract regulating approvals, delays, extensions, disruption, and project milestones.
Default, Rescission, and Termination
The agreement regulated breaches, remedies, and the consequences of termination on property ownership, payments, completed works, and continuing obligations.
Our Legal Strategy
Identifying the Client’s Investment Objectives
The engagement began with an assessment of the client’s objectives in acquiring and developing the property, the nature of the proposed project, its phases, and the intended investment outcome. This assisted in selecting a contractual structure aligned with the project and capable of protecting the client’s legal and commercial interests.
Reviewing the Property and Ownership Documents
The available documents and information concerning the property, its location, ownership, and any rights or restrictions affecting it were reviewed. The purpose of this review was to identify the legal matters requiring resolution before execution of the agreement or completion of the acquisition.
Structuring the Transaction in Clear Legal Phases
The agreement addressed the purchase consideration, payment timetable, transaction documents, conditions precedent, and requirements for completing the acquisition. Responsibility for the transfer-of-ownership and documentation procedures was also allocated, together with the consequences of failing to satisfy the completion requirements.
Regulating Acquisition and Completion
The agreement addressed the purchase consideration, payment timetable, transaction documents, conditions precedent, and requirements for completing the acquisition. Responsibility for the transfer-of-ownership and documentation procedures was also allocated, together with the consequences of failing to satisfy the completion requirements.
Defining the Development Scope and Responsibilities
The development works were defined clearly, and responsibility for planning, design, licensing, implementation, supervision, and handover was allocated between the parties. The agreement also regulated approval of works and variations to the agreed development scope.
Structuring Financing and Project Costs
The financial obligations, funding sources, payment timetable, and procedures for approving expenditure were defined. The agreement also addressed cost increases, additional funding requirements, and the consequences of delayed funding or failure to provide funds when due.
Legal Services Provided
Legal Advice
Providing advice concerning the acquisition and development structure, the client’s rights and obligations, the principal legal and financial risks, and the safeguards required to protect the client’s position.
Comprehensive Legal Study
Preparing a specialised legal assessment covering the property information, investment structure, acquisition terms, development phases, contractual obligations, and principal legal risks.
Drafting the Investment Agreement
Preparing a comprehensive real estate investment and development agreement governing acquisition, transfer of ownership, development scope, financing, implementation, licences, safeguards, default, termination, and dispute resolution.
Legal Insight
A real estate investment and development agreement should do more than record the parties’ understanding concerning the acquisition or development of a property. It should provide a comprehensive legal and operational framework governing the project from negotiation through implementation, completion, and handover.
Careful legal drafting becomes particularly important where the project has substantial value and involves multiple phases and obligations. The agreement should define responsibilities, financing arrangements, project risks, licences, safeguards, implementation procedures, and the consequences of default.
An early legal assessment helps identify risks and contractual gaps before execution, determine the appropriate transaction structure, and establish clear provisions capable of addressing disputes concerning ownership, financing, cost, performance, or responsibility.
Legal Value Delivered to the Client
- Identified an appropriate legal structure for the project.
- Reviewed the property information and ownership documents
- Regulated the terms for acquiring the real estate asset.
- Defined the conditions precedent to completion
- Structured the transfer-of-ownership procedure
- Defined the scope of the development works.
- Divided the project into clear implementation phases
- Regulated financing and financial obligations.
- Addressed additional project costs and expenditure
- Allocated risks and responsibilities between the parties.
- Regulated licences and regulatory approvals.
- Established legal and financial safeguards.
- Addressed delay and non-performance.
- Regulated default, rescission, and termination
- Established a clear dispute resolution mechanism.
- Reduced ambiguity and inconsistency between contractual provisions
- Provided a legal and interpretative reference for the parties.
- Protected the confidentiality of the client and project information.
Scope of Legal Work
Atyar Advocates and Legal Consultants provided legal advice, prepared a comprehensive legal study, and drafted an investment agreement for a private client in connection with the acquisition and development of a property in Makkah, with an investment value exceeding SAR 800 million.
The scope of work included reviewing the transaction structure and available property information, analysing the relevant risks, regulating the acquisition terms and transfer of ownership, defining the development scope and implementation phases, and structuring the financial obligations, safeguards, and consequences of default or termination.
The firm also prepared a comprehensive investment agreement governing the relationship between the parties without disclosing the client’s identity, property details, or the project’s confidential financial and commercial 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 or Reviewing a Real Estate Investment and Development Agreement?
If you are involved in a speculative trading arrangement, investment partnership, or dispute concerning capital, management, accounting, or partner withdrawal, Atyar Advocates and Legal Consultants provides legal advice, comprehensive studies, legal research, drafting, litigation, settlement, and exit-agreement services throughout Saudi Arabia.
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- 00966555398969
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