Real Estate Contributions

A real estate development project in which a group of persons participate to achieve a benefit. This is done by acquiring a property and developing it for residential, commercial, industrial, agricultural, or other purposes, then selling it and concluding the contribution. This does not include real estate investment funds.

The bank account dedicated to the real estate contribution.

A register in which the names of the contributors, their shares, and any changes in ownership of their shares are recorded.

The cash and in-kind shares provided for the real estate contribution, divided into equal values.

A document between the licensee and the contributors for the purposes of the real estate contribution.

A real estate contribution may not be offered, advertised, marketed, or funds collected for it unless approval is obtained from the Capital Market Authority and a license is issued by the Authority, in accordance with the provisions of the law and its regulations, after verifying the following: .1 The property subject to the real estate contribution must be owned under a valid title deed, with its validity confirmed based on a statement from the issuing authority. .2 The property subject to the real estate contribution must have obtained the necessary approvals for its development from the competent authorities, in accordance with the applicable regulations.

The property subject to the real estate contribution must take one of the following two forms: 1. An in-kind share registered in the real estate contribution. 2. A property purchased for the benefit of the real estate contribution.

The license application shall be submitted to the Authority in accordance with the form prepared for this purpose, accompanied by the following: 1. A certificate from an entity licensed to provide credit services confirming the soundness of the credit record of the license applicant, provided that the issuance date of the certificate does not exceed three (3) months from the date of submitting the application. 2. The real estate registry number or a valid property ownership document for the property subject to the real estate contribution, with its validity confirmed and transferable, based on a statement from the issuing authority. 3. Regulatory approvals as applicable from the Ministry of Municipal, Rural Affairs and Housing, the Ministry of Energy, the Authority, or other relevant authorities in accordance with their laws.. 4. An economic feasibility study for the real estate contribution in Arabic, approved by an office licensed in the Kingdom, including estimated financial, construction, and marketing data, expected financial and administrative expenses covering all development costs of the contribution project, the expected duration for its completion, implementation phases, anticipated funding sources and cases for adding the reserve amount. 5. Description of the property subject to contribution.. 6. Determination of the capital of the real estate contribution.. 7. Fill Contribution agreement template.. 8. The agreement with the engineering consultant, including the obligations and duties assigned to them. 9. The agreement with the certified public accountant, including the obligations and duties assigned to them. 10. Agreement with the real estate contribution manager.. 11. The agreement concluded with the property owner in accordance with Article (6) of the regulations, if any. 12. Valuation of the property subject to contribution by three certified real estate appraisers. 13. Appointment of a capital market institution in accordance with the Instructions for Offering Real Estate Contributions Certificates issued by the Capital Market Authority..

All violations and their corresponding penalties are specified in the Violations and Penalties Classification Table issued . in accordance with the Real Estate Contributions Law and its implementing regulations. You can view it via the following link: https://s.rega.gov.sa/TTv

The regulations for 1445 AH define the requirements and criteria for accrediting practitioners and determining their categories and classifications. Details can be viewed via the following link: https://s.rega.gov.sa/AW2

The Real Estate Contributions Act is an Act that has been issued by Royal Decree No. (M/230) dated 28/12/1444 AH and supervised by the Real Estate General Authority. The Act aims to enhance investors’ confidence and trust in the Kingdom’s real estate sector by implementing regulations and terms that preserve the rights of all parties and eliminating random and unsystematic real estate contributions. Additionally, the Act is working to create attractive investment opportunities for small or medium-sized enterprises in the real estate market and provide a new and reliable real estate investment structure. For more information, please visit the “Rules, Regulations, and Guidelines” page. 

The system aims to regulate real estate contribution activities, enhance transparency and disclosure, protect the rights of all parties involved in real estate contributions, and open new financing channels for investors in the real estate development sector. It also strengthens confidence in the sector by regulating the procedures for offering, managing, and liquidating real estate contributions, and contributes to increasing the supply of developed real estate products that serve the real estate market, in line with rising demand, particularly in the residential sector.