Implementing Regulations of Real Estate Brokerage Law

1.         The terms and phrases mentioned herein shall have the meanings ascribed thereto in Article 1 of Real Estate Brokerage Law issued by Royal Decree No. M/130, dated 30/11/1443H, unless the context requires otherwise.

2.         The following terms and phrases, wherever mentioned herein, shall have the meanings ascribed thereto, unless the context requires otherwise:

 License: An authorization issued by REGA to a natural or legal person permits him to practice real estate brokerage activities or to provide real estate services.

Real Estate Advertising License: An authorization issued by REGA to make a visual, read, or audio announcement of disposition of property by any means.

License Applicant: Anyone who applies license application to REGA.

Committee: Committee assigned to review violations of provisions of the Laws and Regulations and impose penalties

Electronic Platform: REGA Electronic Platform

Managing officer: A manager who is legally authorized to manage the facility.

Chapter 1: Licensing Provisions, Conditions, and Procedures

Article 2

1.      REGA shall prepare a guide for the classification of the licenses it issues, in accordance with specific criteria set by the Board.

2.      The licensee's activities shall be limited to the scope of the issued license.

3.      All employees engaged in real estate services within licensed establishments shall complete the qualification program for each activity before commencing their duties and be registered on the electronic platform.

4.      The practice of services such as (facility management, property management, and real estate auctions) shall be restricted to licensed establishments.

Article 3

A natural person applying for a license to practice real estate brokerage or real estate services shall fulfill the following conditions:

1.      Be at least 18 years old.

2.      Have full legal capacity and not have been convicted of a crime involving moral turpitude or dishonesty, unless his reputation has been restored.

3.      Successfully complete the qualification program for each activity.

4.      Pay the financial fees for the license, except for the license to practice real estate marketing and advertising.

Article 4        

A legal entity (establishments) applying for a license to practice real estate brokerage or real estate services shall fulfill the following conditions:

1.      Have a valid commercial registration describing the activities for which the license is sought.

2.      The managing officer shall have full legal capacity and shall not have been convicted of a crime involving moral turpitude or dishonesty, unless their reputation has been restored.

3.      The managing officer shall be fully qualified to practice the activity as specified by REGA.

4.      Pay the financial fees for the license, except for the license to practice real estate marketing and advertising.

Article 5

1.      The license applicant or his representative shall submit a license application to REGA for the activity, along with the following information and requirements:

a.       National ID number for individuals or commercial registration for establishments.

b.      Contact information.

c.       National address.

For establishments, in addition to the above, the managing office shall be specified.

2.      The license application shall be reviewed and verified within a period not exceeding 7 business days from the completion of the application.

3.      REGA, while reviewing the license application, may notify the applicant if any additional information or documents are deemed necessary. The applicant shall provide the required information within a period not exceeding 7 business days from the date of notification; otherwise, the application shall be considered rejected.

4.      REGA shall issue the license to the applicant or reject the application, providing reasons for the rejection and notify the applicant accordingly.

5.      If the license application is rejected, REGA shall refund the application fees to the applicant.

Article 6

The real estate broker and real estate service provider shall obtain a Real Estate Advertisement License for each advertisement after paying the applicable fees. REGA shall issue the license once the application is complete.

Chapter (2): License Duration, Renewal, and Termination

Article 7

The license shall be valid for one year, and it may be extended for a period not exceeding five years.

Article 8

The license may be renewed upon a request of the real estate broker submitted to REGA within sixty days before the expiration date, and upon payment of the renewal fees.

Article 9

1.       The licensee may request the cancellation of the license, and REGA shall decide on the request within a period not exceeding three business days.

2.       A decision regarding the cancellation of the license cancellation shall not be made if a violation of the provisions of the Law and Regulations is detected. The decision on the request shall be suspended until a final decision is issued regarding the violation.

Article 10

The license shall be terminated in the following cases:

1.       Expiration of the license term.

2.       Death of licensee, or dissolution of the legal entity for establishments.

3.       Cancellation of the license upon the request of the licensee.

4.       Loss of any of the license conditions or requirements.

5.       Issuance of a final judgment or decision to revoke the license.

Article 11

The suspension or cancellation of the license shall not result in the refund of the fees paid for the license.

Chapter (3): Real Estate Brokers Registry

Article 12

1.       REGA shall establish a registry in which licensed real estate brokers and qualified individuals affiliated with licensed establishments are recorded.

2.       The information in the registry shall be made available for inquiry in accordance with the rules set by the REGA.

Article 13

Without prejudice to the rules regulating complementary real estate services—these are activities related to real estate that have their own regulations and are supervised by other agencies—a real estate broker may provide complementary real estate services subject to the following conditions: 

1.       Obtaining a complementary real estate service license from the competent authority, and ensuring that the license is valid.

2.       The applicant providing the service shall be licensed by REGA to offer real estate brokerage or real estate services.

3.       Obtaining REGA’s approval to provide such services.

4.       Providing a written disclosure to the service beneficiary of any potential conflict of interest when offering the complementary real estate service alongside real estate brokerage or other real estate services.

Chapter (4): Regulations for Practicing Real Estate Brokerage and Services

Article 14

The real estate broker shall adhere to the following:

1.       Provide written disclosure to all parties involved in the Real Estate Brokerage Contract if there is a potential conflict of interest or if the broker is acting on behalf of both parties simultaneously.

2.       Refrain from disclosing any data or information obtained as a result of practicing real estate brokerage or services, unless the parties involved provide written consent for such disclosure.

3.       Refrain from disclosing any real estate transaction completed through their services, or any related information concerning the parties involved in the transaction.

4.       Notify the parties involved in the real estate transaction of all relevant information, data, and documents in his possession related to the transaction.

5.       Include their license number in the brokerage contract and in all transactions related to practicing real estate brokerage and services.

6.       Avoid mediating any real estate transaction where there is a conflict of interest under any circumstances, unless he obtains written consent from the parties involved in the transaction.

7.       Refrain from entering into a brokerage contract for a property that is prohibited from being disposed of if the brokerage or real estate service cannot be executed due to such a prohibition.

8.       Strictly adhere to the obligations stipulated in the primary contract signed between him and the service requester when entering into a brokerage contract with another broker.

9.       Comply with the regulations, standards, and guidelines issued by REGA related to the organization of relevant real estate activities.

10.   Notify REGA if they cease practicing the activity for a period exceeding one year.

Article 15

1.      The real estate broker shall adhere to the brokerage contract templates approved by REGA.

2.      The real estate brokerage contracts shall be deposited in the electronic platform after completing the data and information referred to in Article 16 of the Regulations and receiving the approval of the parties to the Contract.

Chapter (5): Brokerage Contracts

Article 16

1.      In accordance with Article 9 of the Law, the Real Estate Brokerage Contract signed by the property owner, usufruct owner, or similar parties shall include the following information and documents:

a.       Details of the parties to the Contract.

b.      Details of the attorney and the POA number, if any.

c.       The property number issued by the real estate registry or the deed number and date.

d.      Description of the property.

e.       The percentage or amount of the brokerage commission.

f.        The contract term.

g.      Existing disputes related to the property, if any.

h.      Mortgage or encumbrance that impacts property use, if any.

i.        Rights and obligations related to the property that are not documented in property deed, if any.

j.        Services related to the property, if any.

k.      Information that may impact property value, if any.

2.      The Real Estate Brokerage Contract signed by the buyer, tenant, or similar parties shall include the following information:

a.       Details of the parties to the Contract.

b.      Details of the attorney and the POA number, if any.

c.       The percentage or amount of the brokerage commission.

d.      The contract duration.

e.       Subject-matter of the contract

3.      The Real Estate Brokerage Contract signed between real estate brokers shall include the following information:

a.       Details of the parties to the Contract.

b.      Disclosure of related brokerage contracts

c.       Percentage or amount of the brokerage commission agreed upon in the primary brokerage contract.

d.      Contract duration, not exceeding the period specified in the primary contract.

e.       Subject-matter of the contract

Article 17

All real estate transaction data shall be recorded in the electronic platform, according to the templates prepared for this purpose.

Article 18

The real estate broker shall terminate the brokerage contract in the electronic platform after the completion of the real estate transaction, and the registration of its data in the platform, within a period not exceeding five business days from the completion of the transaction.

Article 19

1.      If the real estate broker concludes one brokerage contract with multiple parties involved in the same real estate transaction, he shall be entitled to the specified commission equally divided among the parties unless otherwise agreed upon by the parties of the brokerage contract.

2.      If the real estate broker concludes multiple brokerage contracts with the parties involved in the same real estate transaction, the commission shall be determined as follows:

a.       If a specific commission percentage is set in one of the brokerage contracts but not in the other, the specified commission percentage in the contract shall be applied, with the remainder borne by the other party, provided it does not exceed the commission provided for in the Law.

b.      If no specific commission percentage is set in the brokerage contracts, the commission provided for in the Law shall equally be divided among the parties involved in the real estate transaction.

Chapter (6): Provisions on Guarantees and Down Payment

Article 20

1.       In accordance with Article 12 of the Law, the guarantee for leased property, if any, shall be in the form of a financial or bank guarantee.

2.       The financial guarantee shall be delivered to REGA or its authorized representative within a period not exceeding two business days from the date of signing the unified lease contract and receiving the guarantee. REGA or its authorized representative shall retain such guarantee.

3.       The guarantee funds shall be deposited in a special account created for this purpose, and they shall not be used for any purpose other than what they were allocated for.

4.       REGA shall develop the regulations governing the authorization to receive financial guarantees.

5.       The value of damages to the leased property shall be determined by agreement between the parties using the form prepared by REGA.

6.       The expert specialized in accordance with the provisions of the Law shall be one of the certified appraisers designated by REGA.

7.       REGA or its authorized representative shall return the guarantee amount or the remaining balance after deductions, if any, based on the parties' agreement, acceptance of the expert’s resolution, or a court ruling on the matter.

Article 21

The real estate broker shall be entitled to a commission of 25% of the down payment if the seller or lessor become entitled to such payment and the real estate transaction is not complete, unless otherwise agreed upon by the parties in the Real Estate Brokerage Contract.

Article 22

Subject to Article 16 of the Law, the real estate broker shall adhere to the following when receiving and handling any amounts from contracting parties:

1.      The broker shall complete the form prepared by REGA before receiving any amounts from any party to the Real Estate Brokerage Contract. The form shall include the following details:

a.       The exact amount received.

b.      The purpose for which the amount is intended.

c.       The mechanism for receiving the amounts.

2.      The receipt of amount by the real estate broker shall be within the scope of the licensed activity.

3.      Upon receiving the amount, the real estate broker shall handle them according to the following regulations:

a.       Obtain written consent from the contracting party on how to handle the amount.

b.      Provide proof of the transaction, such as a receipt or invoice to the contracting party.

c.       Return the amounts or the remaining balance as soon as the intended purpose has been fulfilled.

Chapter (7): Monitoring, Inspection, and Detection

Article 23

REGA may seek assistance to perform monitoring, inspection, and detection duties to implement the provisions of the Law as follows:

1.       Assignment to a government agency.

2.       Engaging the private sector through public-private partnership (PPP).

3.       Engaging the private sector through project contracts in accordance with the Government Tenders and Procurement Law.

Article 24

Concerned parties may submit complaints and reports related to violations of the provisions of the Law and Regulations to REGA, using the form prepared by REGA, which includes the following information:

1.      Details of the party submitting the complaint.

2.      Information about the real estate broker.

3.      Type of the complaint or report.

Supporting documents related to the complaint or report, if available, shall be attached.

Article 25

REGA shall receive complaints or reports, review them, and complete the procedures for detecting and recording violations as follows:

1.      The individual assigned to monitoring, inspection, and detection shall prepare a violation report, which shall include the following details:

a.       Information about the violator.

b.      Activity subject to the violation.

c.       Date of recording the violation.

d.      Time, date, and location of the violation.

e.       Description of the violation.

f.        Documents related to the violation, if any.

g.      Level of cooperation of the violator with the person preparing the report.

h.      Signature of the person preparing the report.

2.      REGA shall notify the violator of the recorded violation through one of the following means:

a.       Text messages sent to the verified mobile phone number.

b.      Email address registered in the REGA's systems.

c.       One of the accounts registered in any of the government's automated systems.

3.      The person tasked with the duties of monitoring, inspection, and detection shall refer the violation report and its accompanying documents to the Committee for Reviewing Violations and Imposing Penalties for review and action.

Article 26

The Committee for Reviewing Violations of the Law and its Regulations and Imposing Penalties shall carry out its duties according to the following procedures:

1.      Record the violation in a special register within the Committee, assigning it a number and date, and include it in the Committee's agenda.

2.      Minutes shall be prepared for each meeting to record the names of participating members, a list of violations presented during the meeting, the actions taken, and the report shall be signed by them.

3.      The Committee shall verify the violation through any means of evidence, and penalties shall be imposed only after ensuring that all legal and procedural requirements are met.

4.      The Committee may allow the violator to be present personally or through a representative to provide his defense.

5.      The Committee may summon the violator as deemed necessary based on the type of violation.

6.      The Committee shall issue its decision with the approval of the majority of the present members. In the event of a tie, the chair of the Committee chair shall have the casting vote. The decision shall include the following:

a.       Decision number and date.

b.      Description of the violation (type, statements, and defenses presented by the violator, if any) and the grounds and operative part of the decision.

c.       The penalties imposed.

d.      A specified timeframe to correct the violation, if applicable.

e.       Signatures of all participating Committee members. If any member adopts a dissenting view, it shall be attached to the decision with justification.

7.         The Committee shall submit its decision to the CEO for approval.

8.         Once approved, the decision shall be communicated to the violator at their specified address or through one of the notification methods provided for in Article 25(2) of the Regulations.

Article 27

These Regulations shall be published in the Official Gazette and shall be applicable on the date the Law enters into force.

 Appendix (1): Table of Classifying Violations and Imposed Penalties

* The harsher penalty in other regulations shall be applied.

** Taking into account Article 26(6)(d) of the Regulations.

*** Violations shall be applied based on the classification of the location of the violation according to Appendix No. 2 below, which includes the table of city, province, and municipality classifications.