In the Kingdom of Saudi Arabia, the ownership transfer of real estate is regarded as an important legal procedure that regulates the transfer of ownership rights from one individual to another.
This procedure is governed by a set of evolving regulations and guidelines, regularly updated to align with the ongoing developments in the Kingdom’s real estate sector. Specific legal procedures must be followed in order to transfer ownership, safeguarding the rights of all parties and fostering stability within the market.
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In this comprehensive guide, discover all the essential information needed to fully grasp this process, from the required legal procedures to the authenticated documents needed.
- Ownership transfer overview
- Ownership transfer: legal steps
- Property Transfer Costs
- Future Steps
- FAQs
Ownership transfer overview
The Saudi Ministerial Council decided to establish the General Authority for Real Estate in Saudi Arabia in compliance with Resolution No. 239 of 1438 to coordinate all matters related to real estate in the kingdom. The fundamental rule governing real estate ownership in the Kingdom is Islamic Sharia law; nevertheless, depending on the terms of the current agreement between the parties, the transfer of ownership may occasionally be delayed.
In this regard, the transfer of real estate ownership in the Kingdom is a crucial process that must adhere to various legal and administrative guidelines. The primary objective of this transfer is to accurately and legally register the new ownership while updating the ownership records. To ensure the transaction’s success and protect the rights of all parties involved, several procedures in the transfer process must be meticulously followed.
Verifying Property Registration Before Ownership Transfer
To ensure the integrity of property registration prior to transferring ownership in Saudi Arabia, follow the steps outlined below
Property Lookup
Visit the Land Registry Office or utilize one of the many online resources to conduct a thorough property search. Ensure that the information on the documents is accurate and that the property is properly registered.
Inspect for limitations or claims
Before transferring the ownership, it’s crucial to make sure the property is free of any constraints, such as mortgages or unpaid debts. To confirm this, you can get a certificate from the Land Registry Office, which will list any rights or claims related to the land.
Consult a specialized lawyer
Consulting a lawyer who specializes in real estate is a crucial first step. A lawyer can confirm the validity of documents and contracts and assist you in fully understanding your rights and obligations.
Ensure the validity of the documents
Check that the title deed and the sales contract, among other documents needed for the ownership transfer, are accurate and properly signed. They should contain all of the involved parties’ names and signatures.
Conduct a Technical Inspection of the Property
If feasible, conduct a technical inspection of the property to determine its general state and ensure that there are no problems that could affect its legality or worth.
by following these steps, you can make sure the property is properly registered before proceeding with the transfer of ownership.
Ownership transfer: legal steps
To ensure the integrity of the transaction and safeguard the rights of all parties concerned, a number of legal and administrative procedures need to be followed when transferring ownership. The following are the primary steps:
Collecting the requested documentation
The seller and buyer must prepare the following documents:
- Original Title Deed
- National ID cards for both parties.
- Sales contract or related legal documents.
- Proof of payment method (e.g. cheque or bank transfer).
- Obtain approval from the relevant authorities for mortgaged or agricultural properties.
Head to the notary office
The concerned parties must come to the Notary Office with the required documents, where the property transfer request is submitted and the documentation procedures are completed
This stage includes:
● Data registration: Inputting the buyer, seller, and property’s information into the system
● Official approval: The property transfer document is issued after ensuring that all conditions are met.
fees payment
The required fees must be paid to complete the ownership transfer, and these may vary depending on the type of property.
Archiving the process electronically
After all procedures have been completed, the ownership transfer process is electronically archived to ensure that documents remain preserved and accessible in the future.
Property Transfer Costs
Although the price of transferring property in Saudi Arabia varies depending on a number of factors, there are generally certain fees and procedures associated with this process.
ownership transfer fees
- Registration fees: Ownership transfer fees for real estate are usually determined according to the value of the property. But according to the present legislation, there are no particular fees associated with ownership transfer to Saudis or foreigners.
- Additional fees for foreigners: When purchasing or selling real estate, foreign buyers or sellers may be charged an additional 10% of the property value. Furthermore, the property cannot be situated in Medina or Mecca.
- Other fees: Other costs may include legal or consulting expenses if a lawyer or real estate consultant is hired to complete the transfer process.
The time needed
If all legal and procedural requirements are met, the ownership transfer process can be completed in an hour.
Based on this, it can be concluded that, the expenses of transferring real estate ownership in Saudi Arabia are thought to be reasonably inexpensive when compared to other countries, with a few extra fees that may be applicable to foreigners.
Additional expenses related to ownership transfer
The additional expenses related to ownership transfer in Saudi Arabia differ depending on the property type:
Lands
If land is to be used for constructing, there can be extra expenses related to dividing it up or getting building licenses. Additional costs may also include consulting fees paid to a real estate consultant or lawyer to complete the transfer process.
Apartments and Villas
For apartments and villas, there can be additional maintenance or general assembly fees. Additional costs may also include registration fees or taxes imposed on the transfer of ownership.
Commercial Properties
Obtaining operational licenses or changing the land’s usage may come with additional costs for commercial properties. Additional costs may also include fees paid to a real estate consultant or lawyer to complete the transfer.
Generally speaking, before finalizing the ownership transfer, the buyer and seller should make sure they are aware of all additional expenses related to the kind of property in question.
Future Steps
In Saudi Arabia, the digitalization of real estate ownership transfer is a significant step toward realizing Vision 2030, which calls for the modernization and digital transformation of the public and service sectors. This change streamlines processes and improves the standard of services offered to citizens and real estate investors.
There are upcoming actions aimed at facilitating and enhancing these procedures in light of recent improvements to the legal and administrative system:
- Developing the technological infrastructure required to improve the real estate industry’s digitalization
- Equipping human cadres with the necessary skills to operate new electronic systems and manage digital transactions
- Improving cybersecurity and safeguarding sensitive data in light of the increasing reliance on digital technology
If all requirements are satisfied and there are no additional costs, this procedure typically takes a maximum of sixty minutes.
It is true that foreigners can transfer ownership of real estate in Saudi Arabia, but they must adhere to certain conditions. For example, they’re not allowed to own properties in Mecca or Medina, nor can they use the properties for agricultural purposes. Additionally, the property must be used for a licensed activity.
For Gulf parties, there are specific requirements, such as:
Real estate ownership cannot be transferred in Medina or Mecca.
Transferring ownership of agricultural areas is not allowed.
White lands must be vacated after four years of ownership by the Gulf party
In conclusion, it is anticipated that the process of real estate ownership transfer will witness more facilities and a shift towards digital services due to the Kingdom’s rapid technological development. There undoubtedly, these developments will help to speed up procedures and reduce the burden on all sector’s dealers.
