Real Estate Finance Law

Purpose and scope

• Governs real estate finance provided by banks and licensed finance companies for acquiring homes and property, to stabilise the market and protect beneficiaries.
• Real estate finance is supervised and overseen by the Saudi Central Bank (Article 2).

Key rules, rights and obligations

• Real estate finance contracts must comply with Islamic Sharia (Article 3).
• Only entities licensed by the Central Bank may carry on real estate finance.
• Finance and beneficiary data are recorded in the credit information register (Article 7), so default affects the beneficiary's credit record.
• The Real Estate Development Fund supports real estate finance for citizens through its programmes (Article 8).
• Finance is usually secured by a registered mortgage of the property, or structured as lease-to-own (ijara) or murabaha.

Violations, penalties and common problems

• Default on instalments allows the financier to enforce the security, and the competent court may award compensation for delay in payment (Article 13).
• Common problems: not reading early-repayment terms and fees, signing for finance beyond one's means, and not understanding property and life insurance.
• A beneficiary may complain of a financier's breaches to the Central Bank.

Procedures and key deadlines

• Ask the financier for the repayment schedule and total cost of finance before signing.
• Disputes arising from finance contracts are heard by the competent court or committees set by the law (Article 13).
• Complaints go to the Central Bank through its online platform after first raising them with the financier.

An advisory summary prepared by Al-Bayan Al-Wadih Law Firm. It is not an official text and does not replace the law, its implementing regulations, or advice from a specialised lawyer. The official published text and its amendments prevail.