Saudi ministry forms rule for off-plan house salesby Neha Bhatia on Jan 20, 2016
Saudi Arabia's Ministry of Trade and Commerce has formulated a set of rules which will permit off-plan house sales.
Under the new rules, developers in the Kingdom will be allowed to sell homes before they are built, even as authorities state they will closely monitor how companies use the money raised from these sales.
Down payments should not exceed 20% of the overall value, while a deposit for purchase must remain within 5%.
Escrow accounts must be used for down payments, with each account tied to specific projects and accessed under supervision, according to Arabian Business.
The off-plan system has helped Dubai's property market in the past, with the Emirate witnessing a construction boom after foreigners were allowed to buy certain properties in 2002.
Saudi Arabia is also mandating that developers guarantee structural and insulation works for buildings for at least 10 years from a property’s completion date, the report added.
Electrical, mechanical and other works should have guarantee of a least one year.
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