RIYADH — The law on selling and leasing off-plan real estate projects, approved by the Saudi Council of Ministers on Tuesday, is expected to bring forth a number of benefits to the Saudi real estate market.
The benefits include raising the efficiency of real estate developers, a check on construction violations, development by establishing oversight mechanisms, sustainable development activity, in addition to enhancing the real estate market’s reliability to become an investment-attracting entity, according to a report in Asharq Al-Awsat newspaper. The law facilitates the organization of off-plan sales and leasing activity, regardless of its purpose and method of development, before the start of implementing the real estate project, or during construction work according to the agreed upon design and plan.
Minister of Municipal and Rural Affairs and Housing and Chairman of the Board of Directors of the Real Estate General Authority Majed Al-Hogail said that the law is an extension of the system of real estate legislation supervised by the authority, and contributes effectively to developing the legislative and regulatory environment for the real estate sector, and keeps pace with the economic and investment movements in the Kingdom.
Al-Hogail said that the law is an important legislative source in financing real estate projects for real estate developers on the one hand, and a purchasing method that suits beneficiaries who wish to own or rent with payments that suit them on the other hand, in addition to the tools and capabilities it provides aimed at organizing the activity of selling and renting projects on the map.
Al-Hogail said that the law raises the level of transparency and disclosure in the activity of selling and leasing off-plan real estate projects, protecting the rights of all parties involved in the contractual relationship, governing the sale and leasing of off-plan projects, and automating all procedures for issuing their licenses and the stages of their establishment until their termination. He stated that the law, along with the rest of the legislation, contributes to increasing the supply of real estate products, regardless of their type, and increasing financing methods for developers and investment channels for those wishing to invest. It enhances investor confidence in the sector, creates promising opportunities for establishments in the real estate development market, and also contributes to the sustainability of real estate development activity and opens job opportunities in it.
Al-Hogail emphasized that the Real Estate General Authority, being the authority responsible for implementing the law, has benefited from the experience of the Off-Plan Sale and Leasing Committee, and what was implemented during the last period, through the regulations that were transformed after the approval of the Council of Ministers into an integrated law that keeps pace with the real estate development that the Kingdom is witnessing, in light of achieving the goals of Vision 2030.
He said the law is not limited to the governance of work in sales and leasing of off-plan real estate projects, but rather goes beyond that as a major catalyst for qualifying real estate developers capable of creating distinguished projects of high quality.
It is noteworthy that the government had decided to transfer the jurisdiction to supervise the activity of selling or renting off-plan real estate units through the Wafi program from the Ministry of Municipal and Rural Affairs and Housing to the Real Estate General Authority. Recently, the Council of Ministers decided to amend the regulations related to selling or renting off-plan real estate units, by replacing the Ministry of Municipal, Rural Affairs and Housing with the General Real Estate Authority.
This measure comes within the measures taken to regulate the real estate sector in the Kingdom, as well as to strengthen partnership between the public and private sectors, and within the framework of implementing the provisions of Vision 2030 to increase the percentage of residential ownership for Saudi families to 70 percent. The program is intended to regulate the activity of selling or renting off-plan real estate units and to support investment, with the aim of enhancing the real estate supply of land and residential units.
Wafi program, also known as off-plan sales and rent program, is a platform that was launched by the Saudi government with the purpose of becoming the governmental organization that authorizes and regulates the off-plan property sales and rent processes and transactions. The off-plan sales and rent program applies to the properties which the developers are selling or leasing before or during their development. This applies to all the properties that meet the aforementioned condition regardless of their type or purpose such as residential, commercial, investment, office, service, industrial, and tourism etc.
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