Saudi Off-Plan Sales Implementing Regulations: What Developers Need to Know

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.

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.

Registration, marketing authorisation and project licensing are separate regulatory requirements. One does not automatically replace the others.

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.

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.

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.

Article 11 addresses project licensing documentation, including a feasibility study covering expected financial, construction and marketing matters, projected expenditure, delivery periods and financing sources.

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.

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.

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.

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 consequences.
• Monitor continuing compliance with licence terms.

Article 34 addresses delay where a project has not been completed after its prescribed period without a cause beyond the developer's control.

REGA may grant an additional period of up to one year under the provision.

Relevant circumstances include failure to complete after the prescribed period, including any extension, or cessation of construction for more than 180 days, subject to the accepted legitimate-reason provisions.

Article 35 provides rules for compensation where its conditions are satisfied.

Article 36 provides for a technical guide concerning delayed and distressed projects.

Depending on the case, measures may include corrective completion plans, technical and financial adjustments, extensions and regulatory intervention.

Relevant powers may include appointing a replacement developer where the statutory conditions and procedures apply.

REGA has regulatory functions involving supervision, inspection and enforcement of applicable off-plan requirements.

Developers should maintain relevant project documents, respond to lawful regulatory requests, and ensure consistency between project operations, licensing documents and contractual obligations.

The following checklist supports an initial review before launching or progressing an off-plan development project.

Atyar Advocates & Legal Consultants has provided legal studies and agreement drafting services for substantial real estate investment and development transactions.

Atyar Advocates & Legal Consultants provides legal advisory, legal assessment, contract review and drafting services involving real estate investment and development.

• Reviewing real estate agreement structures.
• Assessing development-related rights and obligations.
• Reviewing sale and delivery provisions.
• Analysing financing and guarantee clauses.
• Identifying contractual risks.
• Evaluating delay and default provisions.
• Assessing legal disputes and remedies.
• Preparing relevant legal studies and memoranda.

These published Atyar case studies demonstrate legal experience in development agreement drafting, contractual responsibility and investment risk allocation.

The legal framework discussed on this page includes the Law of Selling and Leasing Off-Plan Real Estate Projects, its Implementing Regulations, and the applicable guidance issued by the Real Estate General Authority.

Visit the Saudi Real Estate General Authority (REGA) for the official regulations and guidance.