Riyadh city



The Real Estate General Authority (REGA) said the new Real Estate Brokerage Law, which has been recently approved by the Cabinet, aims to regulate real estate brokers’ business and services. It also aims an integrated regulatory governance and unified models that ensure enhancing the quality and efficiency of real estate transactions.




Real estate brokers mediate to complete a deal between parties in return of a commission. This business includes electronic brokerage services.




The new law states that real estate brokers will only provide brokerage activities after being licensed by REGA. The real estate activities stipulated by the new law shall not be provided without license.




A broker shall abide by practicing brokerage activities directly or through the manager or any authorized person, if it is a legal person. The details of real estate transactions shall be confidential. Moreover, REGA shall be notified of any modification or change to the real estate brokerage activities.




Additionally, the law sets the down payment of a real estate transaction at a maximum of 5% of the deal’s total value.




The real estate brokers’ commission was determined at 2.5% of the sale deal value and at 2.5% of the first-year rental value under lease deals, unless otherwise agreed by the parties.




The new law ensures transparency, as brokers are ordered to disclose the property information, including the name, license number in any advertisement. The broker shall abide by registering contracts online.




For disputes, the law states that any dispute that arises between the agreement parties, the tenant and lessor should be first referred to profession experts selected by REGA before resorting to courts.




Meanwhile, REGA is responsible for monitoring and inspection to put the provisions of this law into effect.




Violators of the law are subject to penalties. These penalties vary between license suspension for up to one year, delicensing, and a fine of SAR 200,000 maximum. Penalties will be doubled in case a violation is repeated in three years.




REGA will issue the relevant regulations within 180 days from the publication of the law, which will come into effect 180 days after its publication date.