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Alan Hall Off the Plan Sales in The Kingdom of Saudi Arabia Alan Hall Senior Counsel Al Tamimi & Company , Updated: Jun 13 2010

In March 2009, the Saudi Arabian Council of Ministers resolved to protect off
the plan purchasers against fraud and unfair contractual conditions by
introducing a number of controls over such sales in respect of residential,
commercial, office, service and industrial units.  This Resolution (No.73) is an interim measure
pending the enactment of the proposed “Real Estate Developers Guarantee Account
Law”.  In pursuance of these interim controls, recently Ministerial Resolution No 983 was passed dealing with the particular Rules.
The key controls include a prohibition on the advertising and
promotion of development projects in both local and foreign jurisdictions
without the consent of a special purpose committee established within the
Ministry of Commerce and Industry.  The proposed
committee consists of representatives from MOCI, the Ministry of Municipal
and Rural Affairs, the Saudi Arabian Monetary Agency and the General Commission
for Housing and will examine all applications for real estate development.  The committee will formulate the conditions
that real estate developers must meet, including proof of their technical
qualifications and financial capabilities and the basis on which moneys can be
released from the project’s Guarantee Account.  
I understand that the Riyadh based committee has recently approved the first project under the new controls.  I would be very interested to hear any publicly available information on the conditions of that approval and the application process.
Thanks
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http://www.cityscapeconnect.com/en/Profile-Page/?userId=1759 Registered User CEO & Managing Director Land Sterling Property Consultants, Updated: Jul 01 2010
Hi Alan,
Our research department has looked into this in a little more detail. We feel that Saudi Arabia Property Committee is doing the right thing by protecting the consumer (from developers and from him/herself) by not giving a chance for Speculation to exist.
This will encourage a healthy property development market to flurish. We all agree that no one wants to see the same situation re speculation (seen in Dubai) to happen elsewhere in the region.
We dont have details of the "code" yet but once we do, we will share some info on the conditions for developers to meet.
I am glad there is control on the development side right from the outset. These laws will try to protect everyone's rights.
Youcef.
 
http://www.cityscapeconnect.com/en/Profile-Page/?userId=2523 Registered User Associate Director - Valuations Jones Lang LaSalle, Updated: Aug 10 2010
Alan,
There has been very little awareness on this new interm measure. The details are still unclear or publicly available. Saudi Arabia is a completely different to Dubai in terms of market transparency among many other differences so any comparison is futile. In essence the Minister of Commerence & Industry is the one with the power. How long this process takes is still unknown and is at the Ministers discretion. This could be a bottle neck and stiffle development as many locals are in need of affordable housing. Our Riyadh and Jeddah offices are also actively trying to get offical copies of these important legislations.
Regards  
 
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