Real Estate Brokerage Law on 01/12/1443
Article One
For the purpose of applying the provisions of this Law, the following words and expressions shall have the meanings set forth opposite each of them, unless the context requires otherwise:
Law: Real Estate Brokerage Law.
Regulations: Implementing Regulations of the Law.
Authority: Real Estate General Authority (REGA).
Board: Board of Directors of the Authority.
Real Estate Brokerage: The practice of intermediary activities to complete a real estate transaction between its parties in exchange for a commission. This includes electronic brokerage conducted through technological means, such as websites, social media platforms, and similar channels.
Real Estate Services: Activities related to real estate, its marketing, management, sale, usufruct sale, and leasing. This includes real estate marketing, property management, facility management, real estate auctions, real estate advertisements, as well as real estate consultations and analytics.
Complementary Real Estate Services: Activities licensed under special laws.
Real Estate Transaction: Sale, purchase, or lease of real estate or its usufruct.
Brokerage Contract: An agreement between the real estate broker and the party benefiting from the real estate brokerage to complete a real estate transaction or to provide a real estate service.
Real Estate Broker: A natural or legal person licensed to practice real estate brokerage or provide real estate services in accordance with the provisions of this Law.
Commission: The amount due to the real estate broker in exchange for real estate brokerage.
Real Estate Marketing: The promotion of a real estate product through advertising and promotional means.
Property Management: Handling the financial and administrative affairs of real estate on behalf of its owner or usufruct owner.
Facility Management: Handling the technical affairs of real estate on behalf of its owner or usufruct owner, including managing internal networks such as water, gas, electricity, air conditioning, telephone, computer networks, television, sewage, rainwater drainage, waste disposal, mail or package delivery, goods delivery, and similar services.
Real Estate Auctions: Public bidding activities for the sale of real estate, the sale of its usufruct, or its lease, to achieve the highest possible price. This includes electronic auctions.
Security Deposit: An amount paid by the tenant as a trust to compensate the property owner or usufruct owner for any damage that falls within the tenant’s responsibility and arises due to the tenant’s actions.
Article Two
This Law aims to regulate real estate brokerage and real estate services.
Article Three
The provisions of this Law apply to anyone who practices real estate brokerage or real estate services, deals with them, or benefits from them.
Article Four
1. Real estate brokerage and real estate services may not be practiced except after obtaining a license from the Authority. The Implementing Regulations shall determine its provisions, conditions, procedures, duration, renewal, and related requirements.
2. A real estate broker may provide complementary real estate services in accordance with paragraph (6) of Article Six of this Law, after obtaining a license from the competent authority and in accordance with the controls specified by the Implementing Regulations.
Article Six
The Board shall undertake the following tasks:
1. Approving regulatory regulations for activities and services under the Authority’s jurisdiction, in accordance with the provisions of this Law.
2. Approving the standards and controls necessary for practicing real estate brokerage.
3. Determining the financial consideration for licenses issued by the Authority pursuant to this Law and for their renewal.
4. Approving procedures for violation control and for receiving reports and complaints.
5. Determining the real estate services that a real estate broker may provide, along with the relevant controls and conditions.
6. Determining the complementary real estate services that a real estate broker may provide, in agreement with the authorities licensed for such services.
Article Seven
1. The brokerage contract shall be in writing, and the broker shall deposit a copy of the contract with the Authority. The contract shall not be enforceable except upon such deposit, and the Implementing Regulations shall specify the procedures for deposit.
2. The brokerage contract shall have a specified duration. If no duration is agreed upon in the contract, it shall be ninety (90) days from the date of its execution.
Article Eight
A real estate broker may contract with one or more other real estate brokers to broker the real estate subject to the brokerage contract, in accordance with its provisions, unless the contract stipulates otherwise.
Article Nine
When executing a brokerage contract with a property owner or usufruct owner, the real estate broker shall obtain a copy of proof of ownership of the property or the usufruct, as well as the information and documents specified by the Implementing Regulations.
Article Ten
The real estate broker shall adhere to the following:
1. Practice real estate brokerage activities personally if a natural person, or through the responsible manager or a licensed subordinate if a legal person.
2. Refrain from any action or omission that may harm the interests of those dealing with them or that conflicts with the provisions of this Law.
3. Notify the Authority of any amendment or change related to the practice of real estate brokerage activities.
4. Not disclose any confidential information about the transactions subject to brokerage.
5. Exercise due diligence to verify the accuracy of the information obtained pursuant to Article Nine of this Law.
6. When presenting real estate, disclose the information obtained pursuant to Article Nine of this Law and refrain from providing any misleading information about the property.
7. Include their name and license number in any advertisement or publication related to the property.
8. Carry out their activity with transparency and credibility and provide services with quality and competence.
Article Eleven
The real estate broker must register all brokerage contracts they conclude and all real estate transactions they complete on the designated electronic platform, in accordance with what is specified by the Implementing Regulations.
Article Twelve
1. The real estate broker shall receive any security deposit and deliver it to the Authority or its authorized representative. The deposit shall be held by the Authority until the property is returned without damage. The security deposit, or the remaining amount after deducting damage costs, shall be refunded to the tenant. The Implementing Regulations shall determine matters related to this.
2. Any dispute between the lessor and lessee regarding the security deposit and the assessment of damages covered thereby shall first be resolved by specialized experts appointed by the Authority, with the consent of both parties. The costs of the experts shall be equally shared between the parties. If the parties do not agree to the resolution proposed by the experts, they shall have the right to refer the dispute to the competent court.
Article Thirteen
1. The earnest money amount for a real estate transaction conducted through a real estate broker shall be determined by agreement between the parties, provided that it does not exceed five percent (5%) of the transaction value. If this percentage is exceeded, the amount shall be considered an advance of price.
2. The amount paid by the buyer or tenant shall not be considered earnest money unless it is expressly stated in writing; otherwise, it shall be deemed an advance of the price and shall not be retained by the seller or lessor if the contract is rescinded.
3. The seller or lessor who has received earnest money shall complete the transaction. If the transaction is not completed due to the buyer or tenant, without a defect in the property, the earnest money shall not be refunded. If the failure to complete the transaction is not attributable to either party, the earnest money shall be refunded to the payer.
4. The real estate broker may not retain earnest money as security for their fees or rights.
Article Fourteen
1. The real estate brokerage commission shall be set at two and a half percent (2.5%) of the transaction value in the case of a sale, and at two and a half percent (2.5%) of the first year’s rent only in the case of a lease, unless the parties to the brokerage contract agree otherwise in writing.
2. The commission shall be paid by the party contracting with the real estate broker under the brokerage contract.
3. If a real estate broker concludes brokerage contracts with more than one party to the same real estate transaction, the total commission received shall not exceed the percentage specified for commission in paragraph (1) of this Article. The Implementing Regulations shall determine the method by which the parties share the commission in this case, unless otherwise stipulated in the contract.
Article Fifteen
The real estate broker shall be entitled to commission in the following cases:
1. Completion of the real estate transaction brokered in accordance with the brokerage contract during its validity, or within a period not exceeding two (2) months after the contract’s expiry, provided that the broker proves their involvement in the transaction in such a case.
2. Non-completion of the real estate transaction while the seller or lessor is entitled to the earnest money. The Implementing Regulations shall determine the applicable percentage and relevant conditions.
Article Sixteen
1. A real estate broker shall not receive any amount from any of the contracting parties for the benefit of any of them, except to the extent required to perform their duties, in accordance with the provisions of the Implementing Regulations.
2. A real estate broker shall not use or dispose of any amount received pursuant to paragraph (1) of this Article for any purpose other than that for which it was intended.
3. The Authority shall set the rules governing how real estate brokers handle amounts received from any contracting party.
Article Seventeen
1. The Authority shall carry out supervision, inspection, and enforcement duties to ensure the implementation of the provisions of this Law. It may seek the assistance of any public or private entities it deems appropriate to perform these duties. The Implementing Regulations shall determine the necessary procedures for this purpose.
2. Persons assigned to supervision, inspection, and enforcement shall record and document any violations of the provisions of this Law in accordance with the enforcement procedures set forth in the Implementing Regulations.
3. Any person engaged in real estate brokerage or real estate services shall allow and facilitate the work of those assigned to supervision, inspection, and enforcement, including granting them access to their workplace and providing any documents or information requested that are related to the provisions of this Law.
Article Eighteen
The following acts constitute violations of the provisions of this Law:
1. Practicing real estate brokerage activities and real estate services without obtaining a license.
2. Providing false information for the purpose of obtaining a license to practice real estate brokerage activities and real estate services.
3. Providing misleading information or concealing material information concerning the property subject to brokerage or the real estate service.
Article Nineteen
1. Any person who violates any provision of this Law shall be subject to one or more of the following penalties:
a. Warning.
b. Suspension of the license for a period not exceeding one (1) year.
c. Revocation of the license.
d. A fine not exceeding (SAR 200,000) two hundred thousand Saudi Riyals.
2. The fine imposed may be doubled in the event of a repeated violation within three (3) years of its occurrence.
3. The Implementing Regulations shall classify violations and specify the penalties prescribed for each based on paragraph (1) of this Article.
4. Any person whose license has been revoked may apply for a new license in accordance with legal procedures after the lapse of three (3) years from the date of revocation.
Article Twenty
1. By a decision of the Chairman of the Board, one or more committees shall be formed, each consisting of at least three (3) members, one of whom shall be a specialist in Sharia or law. These committees shall be responsible for reviewing violations of the provisions of this Law and imposing the penalties stipulated in Article Nineteen of this Law. Decisions shall be issued by a majority vote and approved by the Chief Executive Officer of the Authority. The Implementing Regulations shall set out the procedures governing the work of these committees.
2. Any person against whom a penalty decision has been issued may appeal the decision before the competent judicial authority within thirty (30) days of being notified of the penalty decision.
Article Twenty-One
If committing any violation of the provisions of this Law also constitutes a violation punishable under another law, the more severe penalty shall apply.
Article Twenty-Two
This Law repeals the Real Estate Office Regulation issued pursuant to Council of Ministers Decision No. (334) dated 7/3/1398 Hijri.
Article Twenty-Three
The Board shall issue the Implementing Regulations within one hundred eighty (180) days from the date of issuance of this Law. The Regulations shall be published in the Official Gazette and shall enter into force on the date the Law becomes effective.
Article Twenty-Four
This Law shall come into effect one hundred eighty (180) days from the date of its publication in the Official Gazette.