What is an Off-Plan Real Estate Sale Contract?
Off-plan real estate projects are a modern economic mechanism designed to attract investment. They give investors the opportunity to follow construction progress and all associated development updates. This development led to the emergence of a new contractual model: the Off-Plan Sale Contract.
As a result of this economic shift in the real estate sector, the Saudi regulator issued the Off-Plan Real Estate Sale and Lease Law, which governs all activity related to marketing, selling, or leasing real estate units off-plan, whether receiving funds from buyers, tenants, or financiers, as well as off-plan real estate projects run by government entities in accordance with their nature and within the limits of the regulations.
In this article, Al-Salamah Law Firm explains all legal aspects related to the Off-Plan Real Estate Sale Contract.
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Definition of the Off-Plan Sale Contract
Article (1) of the Law defines a real estate project as:
A real estate development project intended for the sale or lease of developed land or real estate units off-plan, before starting the execution or during the construction and development stage, according to the agreed-upon design or master plan.
Real estate development is defined as:
Constructing residential, commercial, office, service, industrial, tourism, or other types of real estate projects.
The Law does not provide a specific definition for the off-plan sale contract — leaving this to jurisprudence and court interpretation. According to legal doctrine, an off-plan sale contract (sale “under construction”) is one in which the seller commits to constructing a building within a specified period under the contract and the sale may be concluded for future delivery or upon completion.
This contract contains two core components:
- The seller’s obligation to construct.
- Completion of construction within the period defined or agreed in the contract between both parties.
Which Authority Regulates Off-Plan Sale Contracts?
Article (2) of the Executive Regulations states that the General Real Estate Authority is responsible for supervising the regulation of off-plan sale and lease activities, including:
- Issuing the procedural guide in accordance with the Law and Regulations
- Issuing executive decisions
- Registering real estate developers
- Licensing real estate projects
- Supervising and inspecting activities within the sector
Who is Authorized to Conclude Off-Plan Sale Contracts?
Article (3) of the Law stipulates that no real estate developer may conduct off-plan sale or lease activities unless registered in the developers’ registry — nor may a project be marketed or advertised in any media, locally or internationally, unless the project is licensed by the competent authority.
Therefore, there is indeed an official registry that developers must be listed in before practicing off-plan sale activities.
the registration requirements:
Requirements for registering a Legal Entity (companies & establishments):
- A valid commercial register
- Obtaining at least 35 points out of 100 as per the evaluation table in Article (5) (financial, technical, organizational capacities, and human resources)
Requirements for registering a Natural Person developer:
- Obtaining at least 35 points out of 55 based on:
- Passing the developer qualification program
- Proven track record of completed projects
- A valid credit report
- VAT registration certificate
Developers may request score upgrades if capacities improve. If the minimum score is not maintained, registration is suspended for 3 months, after which it is cancelled if not corrected.
Note: Suspension or cancellation does not affect ongoing licensed projects already approved.
How to Obtain a Project-Specific Off-Plan License?
According to Article (6) of the Law, after being registered as a developer, the developer must apply to the General Real Estate Authority for the project license and attach:
- Valid commercial register
- Chamber of Commerce membership
- Credit report
- Valid building permit
- Valid title deed
- Agreement with land owner (if applicable)
- Agreement between main & sub-developer (if applicable)
- Approved architectural designs
- Agreement with consulting office
- Agreement with certified accountant
- Feasibility study with cost analysis and cash flow
- Commitment to begin construction within 6 months of license issuance
- Standard sale contract including delivery dates (to the exact day)
- Escrow account agreement with a licensed Saudi bank
The Authority must issue a decision within 30 days of a complete submission — otherwise the request is considered approved by default. In case of rejection, the decision must be justified.
FAQs
What is the Off-Plan Sale or Lease Program?
It is the official body authorized to issue licenses for off-plan unit sale in Saudi Arabia and to issue developer registry certificates.
What is the Off-Plan Sale & Lease Law?
It regulates the activity, enhances transparency and disclosure, protects all parties, and reduces violations — increasing investor confidence in Saudi Arabia’s real estate sector.
How are lands divided under off-plan sale?
Based on engineering and planning drawings specifying spaces and required facilities.
Can land or property be sold off-plan at any time?
Yes, provided all legal procedures related to property registration and title documentation are completed.
Is there a sample off-plan sale agreement?
Yes — via this link
What is “Wafi”?
“Wafi” is one of the key regulatory solutions launched by the General Real Estate Authority to regulate off-plan sales, protect buyers and investors, and ensure developer compliance with approved standards.
In Conclusion
At Al-Salamah Law Firm, we have been ranked among the top legal real estate teams for 2025 due to our expertise. We provide specialized services in reviewing off-plan sale and lease contracts and offering legal guidance before signing.
Our services include:
- Legal auditing: Comprehensive contract review to ensure compliance
- Reviewing payment terms, delivery dates, and delivery guarantees
- Supporting you in adding clauses that protect your rights
- Providing legal advice in cases of delay or breach of contract
