Wafi: Legal Guarantees for Buyers in Off-Plan Sales Projects
With the rapid urban development in Saudi Arabia, off-plan properties have become a preferred option for many buyers thanks to their competitive prices and flexible payment plans. However, some contracts lack the necessary guarantees, and that’s why the Wafi Program was introduced.
Developed by the General Real Estate Authority, Wafi regulates off-plan sales and leasing activities in Saudi Arabia, ensuring compliance and protection for all parties involved. In this article, Salama Law Firm outlines everything you need to know about Wafi and the guarantees it offers in off-plan real estate projects.
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What is the Wafi Program?
Wafi is a pioneering regulatory program launched by the General Real Estate Authority to oversee off-plan sales and leasing activities. Its primary goal is to protect buyers’ and investors’ rights and ensure developers adhere to approved construction and quality standards.
In 2023, the Off-Plan Sale and Lease Committee (Wafi) authorized the sale of over 101,942 housing units across 434 licensed projects, boosting real estate supply and supporting Vision 2030’s goal of raising homeownership among Saudis to 70 percent.
The program also recorded a 63 percent increase in small and medium project licenses, qualified 350 real estate developers, and issued 35 licenses for showcasing 42,180 units under construction. In addition, 1,130 field inspections were carried out, a 28 percent increase from the previous year, to ensure developers’ compliance with regulations.
These efforts align with the transfer of supervisory and regulatory responsibilities for off-plan projects to the General Real Estate Authority, with the new executive regulations expected soon on the Estithlal (Consultation) platform.
Why Do Off-Plan Sale Contracts Need Wafi Supervision?
The Wafi Program provides several legal guarantees to protect buyers and ensure developers meet agreed standards. Key guarantees include:
- Execution Guarantee: Developers cannot market any real estate unit without obtaining a Wafi license, ensuring project seriousness.
- Escrow Account: All payments must be deposited into a dedicated escrow account, and withdrawals are allowed only based on construction progress.
- Mandatory Contract Templates: All sales contracts must conform to the Authority’s approved model, protecting buyers’ rights.
- Clear Payment Schedule: Payments are made according to a transparent timeline, with down payments not exceeding 5 percent of the total price.
- Delay Penalties: If the developer fails to deliver on time, a 7 percent annual compensation is imposed in favor of the buyer.
- Construction Quality Guarantee: Developers must provide warranties for structural and mechanical works lasting up to 10 years.
Key Differences Between Non-Compliant and Wafi-Approved Contracts
| Item / Clause | Unregulated Contract | Wafi-Certified Contract |
| Supervisory Requirement | Not subject to any oversight | Subject to supervision by the General Real Estate Authority |
| Obligation of Oversight | None | Mandatory to ensure buyers’ rights |
| Escrow Account | Lump sum amount with no guarantee | Installments linked to project progress |
| Payment Mechanism | Not clearly stated | Guarantees on construction and finishing quality |
| Quality Guarantees | Not specified clearly | Construction and finishing guarantees are provided |
| Buyer Protection | No compensatory terms defined | 7% annual compensation in case of delay |
| Contract Termination Procedures | Unclear or unfair | Clear and ensures refund of paid amounts |
Therefore, we strongly advise all buyers and investors not to sign any off-plan sales contract unless it has been officially approved by Wafi and all regulatory and financial conditions have been reviewed to protect their rights.
You can view a sample of the Off-Plan Real Estate Unit Sales Contract (including shared areas) via the following link:
How Can We Help You Review Off-Plan Sales Contracts?
At Salama Law Firm, we have been recognized as one of the top legal teams in the real estate sector for 2025, thanks to our extensive expertise.
We offer specialized legal services for reviewing sales and lease contracts and providing tailored legal advice before you sign. Our services include:
- Legal Due Diligence: Comprehensive contract review to ensure compliance with regulations.
- Payment and Delivery Review: Ensuring a clear payment schedule and delivery guarantees.
- Protective Clauses: Assisting in adding customized terms to protect your interests.
- Legal Advisory: Providing expert legal support in cases of delay or breach of contract.
