Welcome to the Saudi Arabia focus edition of Law Update.
One of the key markets in the Middle East and North Africa (MENA) that continues to lead from the front is the Kingdom of Saudi Arabia (KSA). As the largest country in the Middle East and the 18th largest economy in the world, the progress KSA continues to make is underpinned by its Vision 2030 that envisions developing the country as an investment powerhouse and hub that ultimately connects Asia, Europe, and Africa. Given Saudi Arabia’s significance to the regional economy, our team of experts have prepared a range of pertinent articles that provide insights into new laws, regulations, and the legal landscape in the Kingdom.
This edition will provide you with an up-to-date guide on matters such as; the framework issued by the Saudi Central Bank on IT governance, the anti-corruption landscape under Vision 2030; we also provide practical tips for dispute avoidance. This is only a snapshot; there are many more articles within the KSA focus section for you to read, which we hope you will find valuable and enjoyable.Read the edition
There has been some confusion in the market in relation to what completion percentage developers must reach before the Real Estate Regulatory Authority (“RERA”) will permit them to commence off-plan unit sales.
Several reports in the media have stated that for developers to commence off-plan sales, they will be required to:
We have sought clarification on this from RERA, and are pleased to confirm that a deposit of 50% of the construction value, or equivalent bank guarantee, is no longer required. RERA will apply the previous requirement of 20% of the construction value, i.e. developers will be required to complete construction of 20% of the project or deposit funds for the value of 20% of the construction value into an escrow account or via a bank guarantee.
There are other separate requirements of RERA in relation to licensing off-plan sales, which developers will need to consider when registering projects in order to obtain the required licenses for selling off plan and opening escrow account.
Our Real Estate team would be happy to discuss the above in more detail with you. Please do not hesitate to contact us.