item	Violation	Penalties (1)
item	Violation	First Offense	Second Offense	Third Offense
1	Delay by the developer in commencing construction works of the licensed real estate project after the lapse of six months from the date of obtaining the license without an acceptable excuse.	Warning	A fine of 2% of the real estate project value, as per the feasibility study approved in the license, not exceeding five hundred thousand riyals	Removal from the registry of developers
2	Delay or failure by the developer to complete the real estate project, or a proven compromise of the quality of its execution, causing harm to purchasers or lessees.	Warning		Removal from the registry of developers
3	Declaration of bankruptcy by the developer.	Removal from the registry of developers
4	Declaration of bankruptcy by the developer.	A fine of not less than twenty thousand riyals and not more than fifty thousand riyals
5	Developer’s suspension of project execution for a period of six months during the project term without an acceptable excuse recognized by REGA.	Warning	A fine of 0.5% of the real estate project value, as per the feasibility study approved in the license,not exceeding one hundred thousand riyals	A fine of 1% of the real estate project value, as per the feasibility study approved in the license,not exceeding two hundred thousand riyals
6	Developer entering into a contract between the land owner and developer and the purchaser or lessee, other than the standard contract prepared by REGA, or modifying the standard contract without REGA's approval.	Warning	A fine of 5% of the real estate unit value for which the contract subject to the violation was concluded, not exceeding one hundred thousand riyals	Removal from the registry of developers and prohibition from registration therein for up to one year
7	Developer's failure to disclose, in the real estate project marketing license and while receiving unit reservation amounts, information on the project status and future plans to purchasers or lessees.	Warning	A fine of 2% of the real estate unit value, not exceeding fifty thousand riyals	A fine of 4% of the real estate unit value, not exceeding one hundred thousand riyals
8	Developer receiving a reservation amount exceeding 5% of the off-plan real estate unit value in the real estate project marketing license	A fine of 2% of the real estate unit value, not exceeding fifty thousand riyals	A fine of 4% of the real estate unit value, not exceeding one hundred thousand riyals	Removal from the registry of developers and prohibition from registration therein for up to one year
9	Developer's failure to provide financial statements to REGA upon project completion or within 15 days from the date of REGA's request.	A fine of not less than twenty thousand riyals and not more than thirty thousand riyals	A fine of not less than thirty thousand riyals and not more than forty thousand riyals	A fine of not less than forty thousand riyals and not more than fifty thousand riyals
10	Developer's failure to add information and documents to the real estate projects database.	Warning	A fine of not less than twenty thousand riyals and not more than fifty thousand riyals	A fine of not less than fifty thousand riyals and not more than one hundred thousand riyals
11	Developer’s act or omission for the purpose of obstructing or delaying the work of the bank, consulting firm, certified public accountant, or any other party involved in the project.	A fine of not less than twenty thousand riyals and not more than fifty thousand riyals	A fine of not less than fifty thousand riyals and not more than one hundred thousand riyals	A fine of not less than one hundred thousand riyals and not more than two hundred thousand riyals
12	Developer's failure to notify REGA of any material development that may affect the real estate project within 15 days from its occurrence.	A fine of 1% of the real estate project value, as per the feasibility study approved in the license, not exceeding one hundred thousand riyals	A fine of 3% of the real estate project value, as per the feasibility study approved in the license, not exceeding five hundred thousand riyals	Removal from the registry of developers and prohibition from registration therein for up to three years
13	Developer's failure to implement the rectification measures for delayed or troubled projects within 15 days of notification thereof	A fine of 1% of the real estate project value, as per the feasibility study approved in the license, not exceeding one hundred thousand riyals	A fine of 3% of the real estate project value, as per the feasibility study approved in the license, not exceeding five hundred thousand riyals	Removal from the registry of developers
14	Developer's failure to pay due compensation to the purchaser or lessee within 30 days of its due date	Warning	A fine of 3% of the real estate unit value subject to the violation, not exceeding one hundred thousand riyals	A fine of 6% of the real estate unit value subject to the violation, not exceeding three hundred thousand riyals
15	Developer's failure to provide the purchaser or lessee with a copy of the accounting record.	Warning	A fine of not less than five thousand riyals and not more than ten thousand riyals	A fine of not less than ten thousand riyals and not more than twenty thousand riyals
16	Developer's failure to deliver the actual plans of the real estate unit to the purchaser or lessee.	Warning	A fine of not less than ten thousand riyals and not more than thirty thousand riyals	A fine of not less than thirty thousand riyals and not more than fifty thousand riyals
17	Developer’s modification of approved execution plans without obtaining REGA's approval.	A fine of 2% of the real estate project value, as per the feasibility study approved in the license, not exceeding three hundred thousand riyals	A fine of 4% of the real estate project value, as per the feasibility study approved in the license, not exceeding five hundred thousand riyals	Removal from the registry of developers and prohibition from registration therein for up to three years
18	Developer's failure to commence repair of the real estate unit defects within 5 days of notification thereof.	Warning	A fine of not less than ten thousand riyals and not more than fifty thousand riyals	A fine of not less than fifty thousand riyals and not more than one hundred thousand riyals
19	Developer's breach of contractual obligations, other than those mentioned in this Table, toward purchasers and lessees.	Warning	A fine of 2% of the real estate unit value subject to the violation, not exceeding fifty thousand riyals	A fine of 4% of the real estate unit value subject to the violation, not exceeding one hundred thousand riyals
20	Certified public accountant's failure to prepare the project’s financial statements	A fine of not less than twenty thousand riyals and not more than fifty thousand riyals	A fine of not less than thirty thousand riyals and not more than seventy thousand riyals	A fine of not less than fifty thousand riyals and not more than one hundred thousand riyals
21	Certified public accountant’s disbursement of the amount held in the escrow account if the consulting firm, purchaser, or lessee identifies construction or finishing defects.	A fine of 2% of the amount held in the escrow account, not exceeding one hundred thousand riyals	A fine of 4% of the amount held in the escrow account, not exceeding two hundred thousand riyals	A fine of 5% of the surplus amounts, not exceeding three hundred thousand riyals, and cancellation of accreditation with prohibition therefrom
22	Consulting firm or certified public accountant providing misleading informa	A fine of not less than twenty thousand riyals and not more than fifty thousand riyals
23	Consulting firm or certified public accountant's failure to report to REGA any violation of the provisions of the Law and its Regulations discovered in the course of his work.	Warning	A fine of 0.5% of the real estate project value, as per the feasibility study approved in the license, not exceeding fifty thousand riyals	A fine of 1% of the real estate project value, as per the feasibility study approved in the license, not exceeding one hundred thousand riyals
24	Consulting firm or certified public accountant's failure to provide the reports and data requested by REGA.	Warning	A fine of 0.5% of the real estate project value, as per the feasibility study approved in the license, not exceeding fifty thousand riyals	A fine of 1% of the real estate project value, as per the feasibility study approved in the license, not exceeding one hundred thousand riyals
25	Consulting firm or certified public accountant signing disbursement orders for surplus amounts without REGA's approval.	A fine of 2% of the surplus amounts, not exceeding one hundred thousand riyals	A fine of 4% of the surplus amounts, not exceeding two hundred thousand riyals	A fine of 5% of the surplus amounts, not exceeding three hundred thousand riyals, and cancellation of accreditation with prohibition therefrom for up to one year

1) The following shall be observed when applying penalties:

1. Penalties shall be determined based on the nature of the violation, the status of the project, and the resulting impact of the violation.

2. The penalty decision issued by the committee responsible for reviewing violations and imposing penalties shall specify a rectification period for the violation, which shall not be less than 10 days and not more than 180 days, taking into consideration the type of violation and the nature of the rectification measures.

Release Date:	1446-03-26
Release Tool:	Councils and commissions decisions
Issuance Instrument Number:	28/3/m/24
Validity:	Valid
Umm Al-Qura Newspaper:	Issue Number: 5055\|Issue date: 2024-11-08\|View edition

Schedule of Classification of Violations of the Law on Sale and Lease of Off-Plan Real Estate Projects and the Prescribed Penalties