The following terms and phrases – wherever mentioned in this Regulation – shall have the meanings assigned thereto unless the
context requires otherwise:
Law: Real Estate Finance Law.
Regulation: Implementing Regulation of the Real Estate Finance Law.
SAMA: Saudi Central Bank.
PIF: Public Investment Fund.
Governor: Governor of Saudi Central Bank.
Real Estate Finance: Extending credit to a borrower for the purpose of owning a dwelling.
Real Estate Finance Contract: A deferred payment contract extended to a borrower to own a dwelling.
Real Estate Finance Contractual Rights: cash flows, mortgages, collaterals and other rights arising under a real estate finance
contract.
Transfer of Rights: transfer of a right to recover a debt or execute upon a mortgaged real estate, or any other right arising from a
real estate finance contract.
Sector: real estate finance sector.
Real Estate Finance Company: a joint stock company licensed to engage in real estate finance activity.
Real Estate Finance Entity: commercial banks and real estate finance companies licensed to engage in real estate finance activity.
Real Estate Refinance Company: a joint stock company licensed to engage in real estate refinance activities.
Originator: a real estate finance entity originating a real estate finance contract.
Borrower: a natural person who obtains real estate finance.
Consumer: any person targeted by real estate finance services.
Housing Subsidy: a financial or credit subsidy provided by the government, housing societies, or the like to make housing affordable.
Subsidized Real Estate Housing Finance Product: a product subsidized by a housing subsidy provider through a real estate finance
entity.
Secondary Market: trading of the rights of real estate finance entities resulting from primary market contracts.
The bank is responsible for regulating the sector in accordance with Article Two of the Law, and for this purpose:
1. To license real estate financing companies to engage in real estate financing activities, in accordance with the provisions of the Law, the Regulation of Financing Companies, and their bylaws.
2. To take the necessary procedures to maintain the safety and stability of the sector and the fairness of transactions within it.
3. To take the necessary procedures to encourage fair and effective competition among real estate financiers.
4. To issue rules and instructions to regulate the work of the sector.
5. To take appropriate measures to develop the sector, work on localizing its jobs, and enhance the efficiency of its employees, by organizing the obligations of real estate financiers regarding the training of human resources, enhancing their skills, and developing the knowledge of employees in the sector.
The real estate financier is not permitted to engage in any activity that is not licensed by the bank, including activities related to investment in real estate, development, marketing, and real estate appraisal. The real estate financier may own residential properties for the purpose of financing them to beneficiaries, provided that ownership is a condition for the validity of the real estate financing contract and that it does not generate non-financial profit.
1. Insurance against real estate financing risks shall be in accordance with the provisions of the Cooperative Insurance Companies Control Law and its executive regulations, as well as any instructions issued by the bank.
2. The real estate financier must declare in their annual reports the risks that can be insured against, and how to address them.
In accordance with the provisions of Article Four of the Law, the Ministry of Commerce and Investment, the Ministry of Justice, and the Ministry of Housing shall compile data related to the real estate market activity and publish it on their websites periodically, including data on property sales, prices, and mortgages.
Pursuant to the provision of Article 5 of the Law, agencies entrusted with registration of real estate ownership (courts, notaries public and real estate registration and documentation departments) shall grant real estate finance entities access to information recorded in real estate registers in accordance with the following procedures:
1. The real estate finance entity shall submit an application – in a written or electronic form – requesting access to the information.
2. The real estate finance entity shall attach a copy of the real estate finance license in order to access the information.
3. The agency entrusted with the registration of real estate ownership shall, as the case may be, issue a certificate in the form prepared by the Ministry of Justice that includes the following:
a) The name of real estate owner at the time of submitting the application;
b) Validity and integrity of the real estate title deed, based on its records or its invalidity – as the case may be – and rights related thereto.
c) The certificate shall be valid for a period not exceeding 30 days from the date of its issuance.
4. The agencies entrusted with the registration of real estate ownership shall provide the required information to the real estate finance entity within a period not exceeding five working days from the date of receipt of the application.
The real estate financier may refinance the real estate in accordance with Article Eleven of the law through the following:
1. Licensed real estate refinancing companies approved by the bank.
2. Issuing securities in accordance with the provisions of the Capital Market Law after obtaining a letter from the bank indicating no objection.