Introduction

The regulation of real estate auctions in Saudi Arabia, in 12 articles, specifies the licensing provisions, the obligations of the licensee, the electronic platform, the request for a real estate auction and the location provisions.

And according to what has been stipulated in the Official Gazette, Umm Al-Qura, the provisions of this Ordinance apply to all real estate auctions in the Kingdom, including judicial real estate auctions and the like, to the extent that is not specified in the special text governing them.

Licensing and Electronic Platform

The regulation provides that the provision of real estate auction services requires a license – in addition to the requirements provided for in the implementing regulations of the real estate brokerage system – for institutions that provide it by electronic means.

It is required to link the licensee’s real estate auction electronic platform with the authority’s electronic platform, and undertake to ensure the integrity of transactions occurring on the licensee’s platform, as well as to stop or resume the real estate auction in transactions that are corrupted by technical errors or violations in such a way as to guarantee protection competitiveness of supply and demand.

Also undertakes to publish all data of real estate auctions held on the platform of the licensee, on the electronic platform of the department, as well as to obtain all legal licenses required to carry out activities from the relevant authorities.

The regulation provided for the connection of the electronic platform with the national access platform and the access of beneficiaries to electronic means through it.

Obligations of the Licensee

Article 3 of the system states: “A person holding a real estate auction license must adhere to honesty and sincerity, conduct business impartially and fairly, and in no way interfere with fair competition, and exercise professional care, caution and sincerity to achieve the best prices.”

The third article also stated the need to comply with all bulletins and records of real estate auctions, record the facts of visual auctions, documents and data on all his transactions within (five) years from the date of the end of the law. real estate auction, in addition to conducting a real estate auction during the term of the brokerage agreement, as well as obtaining permits. Competent authorities are required to hold a real estate auction and practice the provision of services by qualified affiliates. from the licensee and registered with the authority.

Application Process and Approval

The resolution spoke about compliance with the requirements of the regulations and instructions of the competent authorities in the practice of real estate auctions with the announcement of the prospectus of the real estate auction five days later – at least – from the date of its holding.

According to the rules, the Real Estate Authority must examine the application for holding a real estate auction within a period not exceeding (five) business days from the date of submission of the application, and may, if it needs additional data or documents, deems it necessary, notify the applicant, and he must comply with all necessary within a period not exceeding (five) days. Act from the day you receive notification of this, otherwise the application will be considered rejected, and the Authority will issue permission to hold a real estate auction or reject it, indicating the reasons for the refusal and notifying the applicant.

Real Estate Auction Process

The ninth article of the ordinance provides that “the real estate auction manager regulates the price offer between competitors, and the real estate auction starts in accordance with the initial price of the real estate auction specified in the mediation contract, and the auction may start at a value different from this value if the owner – or his legal representative will confirm this in writing.”

It stated that if the agreed value of accepting the sale in the mediation contract is not reached at the real estate auction, then this is considered in one of the following cases:

A- Confirmation in writing by the owner or his legal representative of the acceptance of the consideration and the sale of the property at the price reached at the auction.

B- Termination of the auction in case of non-confirmation by the owner – or his legal representative – and the preparation of a report on this matter.

A real estate auction is awarded to the highest bidder and no bids have been submitted and the time limit specified for the auction has expired, in the following cases:

A- The offer has reached or exceeded the value specified for the acceptance of remuneration and the sale of real estate provided for in the brokerage agreement.

B- Bidding did not reach the amount specified for the decision and alienation of the property provided for in the mediation agreement, and the owner – or his legal representative – confirmed in writing the decision and disposal of the property, in accordance with subparagraph “a” of paragraph 3 of this article.