{"id":83519,"date":"2024-02-18T00:00:00","date_gmt":"2024-02-18T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/02\/18\/new-rules-on-how-individuals-can-jointly-develop-real-estate\/"},"modified":"2024-02-18T00:00:00","modified_gmt":"2024-02-18T00:00:00","slug":"new-rules-on-how-individuals-can-jointly-develop-real-estate","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/02\/18\/new-rules-on-how-individuals-can-jointly-develop-real-estate\/","title":{"rendered":"New rules on how individuals can jointly develop real estate"},"content":{"rendered":"

The Real Estate General Authority (REGA) is out with e<\/strong>xecutive regulations for the <\/strong>new<\/strong>real estate contributions (REC) law<\/strong>, which went into effect in <\/strong>July 2023<\/a><\/strong>. <\/strong>The rules regulate how groups of five or more people can come together to develop a real estate project. <\/p>\n

A license to develop a project through contribution<\/strong> is based on the size of the project, requires a clear financial plan, and will need to have a qualified manager. <\/p>\n

Uh, Enterprise? What\u2019s a real estate contribution?<\/strong> It\u2019s a financial strategy where individuals pool their resources to collectively invest in a property. Some might contribute cash, others could contribute in-kind assets (think: land) or services. Under the rules for the REC, any in-kind contribution needs to be valued by independent appraisers, while cash contributions will have to be deposited in an escrow account. <\/p>\n

They come in three sizes: <\/strong>A small contribution is worth less than SAR 50 mn, while a medium-sized one is in the SAR 50-300 mn range, and a large project is defined as being worth more than SAR 300 mn, according to the rules.<\/p>\n

The regulations, in brief:<\/strong><\/p>\n