Chapter One Definitions and General Provisions
Article 1
The following terms and phrases - wherever they appear in this regulation- shall have the meanings assigned there to, unless the context requires otherwise:
Law: Real Estate Finance Law.
Regulation: Implementing Regulation of the Real Estate Finance Law.
SAMA: Saudi Central Bank*.
PIF: Public Investment Fund.
Governor: Governor of SAMA.
Real Estate Finance: Extending credit to a borrower for the purpose of owning a dwelling.
Real Estate Finance Contract: A deferred payment contract extended to a borrower to own a dwelling.
Real Estate Finance Contractual Rights: cash flows, mortgages, collaterals and other rights arising under a Real Estate Finance Contract.
Transfer of Rights: transfer of a right to recover a debt or execute upon a mortgaged real estate, or any other right arising from a real estate finance contract.
Sector: Real Estate Finance sector.
Real Estate Finance Company: a joint stock company licensed to engage in real estate refinance activity.
Real Estate Finance Entity: Commercial banks and Real Estate Finance companies licensed to engage in Real Estate Finance activity.
Real Estate Refinance Company: a joint stock company licensed to engage in real estate refinance activities.
Originator: a Real Estate Finance entity originating a Real Estate Finance Contract
Borrower: a natural person who obtains Real Estate Finance.
Consumer: any person targeted by real estate finance services.
Housing Subsidy: a financial or credit subsidy provided by the government, housing societies, or the like to make housing affordable.
Real Estate Housing Finance Subsidized Product: a product subsidized by a housing subsidy provider through a real estate finance entity.
Secondary Market: trading of the rights of real estate finance entities resulting from primary market contracts.
* The "Saudi Arabian Monetary Agency" was replaced By the "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.
Article 2
SAMA shall, pursuant to Article 2 of the Law, regulate the real estate finance sector. For this purpose, SAMA may:
1. License real estate finance companies to engage in real estate finance activities in accordance with the provisions of the Law, Finance Companies Control Law and their regulations;
2. Take necessary measures for maintaining the integrity and stability of the sector and fairness of transactions;
3. Take necessary measures for promoting fair and effective competition between real estate finance entities;
4. Issue rules and instructions to regulate the sector; and
5. Take proper means for the development of the sector, Saudization, and raising the employees' competency through regulating the obligations of the real estate finance entities regarding the training of human resources, improving their skills and developing their knowledge.
Article 3
A real estate finance entity shall not engage in any activity not licensed by SAMA, including real estate investment, marketing, development and valuation. It may own dwellings for the purpose of financing borrowers, provided that the ownership is a condition for the validity of real estate finance contract and does not create non-finance earnings.
Article 4
1. Insurance against Real Estate Finance risks shall be in accordance with the Cooperative Insurance Companies Control Law and its Implementing Regulation and the instructions issued by SAMA.
2. A real estate finance entity shall disclose, in its annual report, the risks that can be hedged by insurance and manner of dealing with such risks.
Article 5
Pursuant to the provision of Article 4 of the Law, the Ministry of Commerce and Industry, the Ministry of Justice and the Ministry of Housing shall compile data relating to real estate market activity and periodically publish such data on their websites including data on sale, lease and mortgage of real estate.
Article 6
Pursuant to the provision of Article 5 of the Law, bodies entrusted with registration of real estate ownership (courts, notaries public and real estate registration and documentation departments) shall grant real estate finance entities access to information recorded in real estate registers in accordance with the following procedures:
1. The real estate finance entity shall submit an application – in a written or electronic form – requesting access to the information.
2. The real estate finance entity shall attach a copy of the real estate finance license to access the information.
3. The body entrusted with the registration of real estate ownership shall, as the case may be, issue a certificate in the form prepared by the Ministry of Justice that includes the following:
a The name of real estate owner at the time of submitting the application;
b Validity and integrity of the real estate title deed based on its records or its invalidity – as the case may be – and rights related thereto.
c The certificate shall be valid for a period not exceeding 30 days from the date of its issuance.
4. The bodies entrusted with the registration of real estate ownership shall provide the required information to the real estate finance entity within a period not exceeding five working days from the date of receipt of the application.
Article 7
A real estate finance entity may refinance real estate in accordance with Article 11 of the Law through the following:
1. Real estate refinance companies licensed by SAMA.
2. Issuance of securities in accordance with the provisions of the Capital Market Law after obtaining a no objection letter from SAMA.