REGA Contract and Transaction Law

Question 1

What are the essential elements of a valid real estate sale contract in Saudi Arabia?

Accepted Answer

Mutual consent, legal capacity of parties, lawful subject matter, defined price, and property description

Answer

A valid Saudi real estate contract requires mutual consent (offer and acceptance), legal capacity of both parties, a lawful purpose, a clearly defined price, and a precise description of the property being sold.

Question 2

What is the role of the notary public (Katib Al-Adl) in Saudi real estate transactions?

Accepted Answer

Authenticating and notarizing real estate contracts and property transfers

Answer

The notary public (Katib Al-Adl) authenticates real estate contracts, verifies the identities and legal capacity of parties, ensures proper documentation, and notarizes the transfer of property ownership at the Ministry of Justice.

Question 3

What is Arboun (earnest money) in a Saudi real estate transaction?

Accepted Answer

A deposit paid by the buyer to demonstrate serious intent, which is typically forfeited if the buyer withdraws without cause

Answer

Arboun is a deposit (typically 5-10% of the purchase price) paid by the buyer to secure the property. If the buyer completes the purchase, it is applied to the price. If the buyer withdraws without valid reason, the seller typically keeps the Arboun.

Question 4

Under Saudi law, what is the warranty period for construction defects in new buildings?

Accepted Answer

10 years for structural defects under the Building Liability Law

Answer

The Saudi Building Liability Law provides a 10-year warranty for structural defects from the date of building completion. The contractor and engineer remain liable for structural failures during this period.

Question 5

What is the process for transferring property ownership in Saudi Arabia?

Accepted Answer

Both parties appear before the notary at the Ministry of Justice to execute the transfer and update the Title Deed

Answer

Property transfer requires both parties (or their authorized representatives) to appear before the Ministry of Justice notary. The transfer deed is executed, the existing Title Deed is cancelled, and a new one is issued in the buyer's name.

REGA Practice Test

REGA Practice Test

REGA Contract and Transaction Law