New real estate brokerage law in Saudi Arabia
Last week, the real estate brokerage law was published and will come into force in six months’ time. The law will contribute to regulating and improving this essential practice in the Kingdom.
Real estate brokerage was defined as mediating the real estate transaction between the parties in exchange for a commission, including electronic mediation through technical means, such as websites, social media platforms and so on.
As for the real estate services, these were defined by the law as the real estate activities related to the property and marketing, management, sale, and rental of its benefit, including real estate marketing, property management, facilities management, real estate auctions, real estate advertising, real estate consultancy and analysis.
The new law aims to regulate real estate brokerage and real estate services, where the provisions of the law will apply to anyone who engages in, deals with, or benefits from real estate brokerage or real estate services.
Moreover, real estate brokerage and real estate services may not be conducted or provided until a license has been obtained from the Real Estate General Authority, where the regulation sets out its terms, conditions, procedures, duration and renewal.
The brokerage contract must be written, and the broker must deposit a copy of the contract with the authority.
The contract duration must be a fixed-term agreement, and if both parties do not agree on the period, the duration will automatically be 90 days from the date of its last signature. Moreover, when concluding a brokerage contract with the landlord or utility owner, the real estate broker must obtain a copy of the proof of ownership of the property or ownership of the benefit, information and documents.
Regarding the broker’s obligation as stated in the law, the broker has to engage in real estate brokerage activity by himself if he is a person, or through the responsible manager or one of his licensed and authorized attorneys.
If the broker is a company with a legal capacity, the broker also has to refrain from any act that will harm the interests of his clients or any act that will violate or conflict with the provisions of the law.
The broker also has to inform the authority of any modification or change related to the practice of real estate brokerage activity, refrain from disclosing any secrets of the transactions in question, and take the necessary care to verify the accuracy of the information obtained on the deal or transaction.
• Dimah Talal Alsharif is a Saudi lawyer and legal consultant. Twitter: @dimah_alsharif