The words and phrases mentioned below - wherever they appear in this Law - shall have the meanings specified next to each of them, unless the context requires otherwise:

Law: Law on the Sale and Lease of Real Estate Projects Off-Plan.

Regulation: Implementing Regulation of the Law.

Competent Authority: The authority responsible for implementing the provisions of the Law, which is designated by an order from the President of the Council of Ministers.

Responsible: The primary person in the Competent Authority.

Real Estate Project: A real estate project intended to be developed for the sale or lease of developed lands or real estate units off-plan, before commencing its execution or during the construction and development works according to the agreed design or plan.

Guarantee Account: A bank account specific to the real estate project, in which the amounts paid by the financiers of the real estate project, or the buyers, or the tenants of the project are deposited.

Real Estate Development: The construction of residential, commercial, office, service, industrial, tourism, or other real estate projects.

Developer: A Corporate Personality licensed to engage in the activity of owning or leasing real estate for the purpose of developing, selling, or leasing it as applicable, including both the main and subsidiary developer.

Subsidiary Developer: A Corporate Personality licensed to engage in the activity of owning or leasing real estate for the purpose of developing, selling, or leasing it based on an agreement with the main developer.

Real Estate Broker: A natural or legal person, licensed to practice real estate mediation or provide real estate services in accordance with the regulatory provisions.

Consulting Office: An engineering consulting office licensed by the competent authority, approved by the competent authority for the real estate project.

Certified Accountant: A person licensed by the competent authority, approved by the competent authority for the real estate project.

Register of Developers: A register in which the names of qualified developers for the development, sale, and lease of real estate projects licensed by the competent authority to engage in real estate development activities in the Kingdom are recorded.

Real Estate Unit: The portion of the real estate that the developer sells or leases to others.

Common Area: The portion shared among the owners of the real estate units in the real estate project.

The provisions of the Law apply to the following:

1- The activity of selling and leasing real estate projects off-plan, in which amounts are received from buyers, or from tenants, or from financiers of the real estate project.

2- The activity of selling and leasing real estate projects owned by government entities off-plan, in accordance with their nature and within the limits set forth in the Regulation.

No real estate developer has the right to engage in the activity of selling and leasing real estate projects off-plan unless they are registered in the developers' registration record. They are also not permitted to advertise them in local or foreign media, nor to hold exhibitions for them or invite others to such exhibitions; unless the real estate project is licensed by the competent authority, in accordance with the provisions of the law and the regulation.

The competent authority shall undertake the following in accordance with the law:

1- Supervise real estate projects, including issuing the necessary licenses for them, monitoring their implementation, and conducting oversight and inspection. The responsible person may delegate some of these tasks to the private sector, in accordance with the provisions of the law and regulation.

2- Prepare a public database specifically for licensed real estate projects in accordance with the law. The regulation shall specify the data that must be included in the database.

3- Prepare a special register called (Developers Registration Record). The regulation shall specify the controls and procedures for registration.

The competent authority may request from the developer - if they wish to market the real estate project through a real estate broker - to provide a copy of the agreement concluded with the real estate broker, in accordance with what is specified in the regulation.

1- The developer wishing to sell or lease real estate projects off-plan - after registering their name in the Developers Registration Record - must submit a claim to the competent authority to obtain the specific license for the real estate project, accompanied by the following:

• A- A copy of a valid commercial register that permits them to engage in real estate development activities.

• B- A certificate of membership from the Chamber of Commerce.

• C- A copy of the credit report from a company licensed by the competent authority for credit services.

• D- A valid building permit for the real estate project.

• E- A valid title deed for the property intended for development.

• F- A copy of the agreement concluded between them and the landowner or the owner of its usufruct, in accordance with the provisions of the law and regulation.

• G- A copy of the agreement concluded between the main developer and the sub-developer - if any - in accordance with the provisions of the law and regulation.

• H- The architectural designs and engineering plans approved by the competent authorities.

• I- A copy of the contract concluded between them and the consulting office, in accordance with the provisions of the law and regulation.

• J- A copy of the contract concluded between them and the legal accountant, in accordance with the provisions of the law and regulation.

• K- A feasibility study for the real estate project from a consulting office that includes: estimated costs of the real estate project, necessary expenditures, cash flow, and the expected duration for its implementation.

• ل- A commitment from them to commence construction works for the real estate project within (six) months from the date of obtaining the license.

• م- A model sales contract between them and the buyer, with delivery dates specified by the day, in accordance with the provisions of the law and regulation and not conflicting with the provisions of Sharia.

• ن- An agreement to open an escrow account between them and a licensed bank in the Kingdom, in accordance with the provisions of the law and regulation.

And the competent authority may add or amend some conditions.

2- The competent authority shall decide on the claim within (thirty) days from the date of completing the required documents, and if that period elapses without a decision, it shall be considered as approval of the claim. In the event of the competent authority rejecting the claim, the decision must be substantiated.

And the competent authority must set the necessary conditions for approving the real estate project at all its stages, and these conditions shall be specified in the regulation.

For the competent authority - in order to achieve the objectives of the law and when necessary - to register the natural person in the developers' registration record and to license them to engage in the activity of selling and leasing real estate projects on the map; in accordance with the controls specified by the regulation, provided that it includes a specified ceiling for the size of the real estate project, and a specified number of real estate projects that they are allowed to implement annually, in accordance with the provisions of the law and the regulation.

Without prejudice to the provisions of the Real Estate Registration Law; the competent authority, when issuing the specific license for the real estate project, shall request to make a notation on the property ownership registration deed of the real estate intended for development (at the competent notarization authority) prohibiting any action regarding its ownership until the real estate development works are completed. The notation on the property ownership registration deed for that real estate shall not be lifted except after the approval of the competent authority. The regulation specifies the cases in which the notation prohibiting action may be lifted. Those affected by the decision of the competent authority may appeal before the committee stipulated in Article (Twenty-One) of the law.

A separate guarantee account is established in the name of each real estate project, and it shall not be activated except after obtaining the specific license for the real estate project and the notation on the property registration deed of the real estate to be developed.