Real Estate Brokerage in Saudi Arabia: Your Rights and the Broker's Obligations

Not so many years ago, anyone could call themselves "a real estate office" and start offering land and homes, with the commission "subject to agreement", and that agreement was usually just a verbal one. Things have changed. Today there is a clear legal framework that protects sellers, buyers and tenants, and protects the legitimate broker too.

In this article, we explain the law from your side as a client: What are your rights? What must the broker commit to? And how can you make sure you are dealing with someone who is licensed?

What Is Real Estate Brokerage?

Simply put, real estate brokerage is when a licensed person acts as an intermediary between two parties to complete a real estate transaction (a sale, a purchase or a lease) in return for a commission, known locally as sa'i (السعي).

A broker can be:

An individual who is licensed and practices the activity personally.
An establishment (an office or a company) that is licensed and practices the activity through a licensed manager.

The Law That Regulates the Market

The main reference is the Real Estate Brokerage Law, issued by Royal Decree No. (M/130) dated 30/11/1443 AH, together with its Implementing Regulations issued by the Real Estate General Authority (REGA).

The law officially came into force on 18 January 2023 (25 Jumada al-Akhirah 1444 AH), replacing the old regulation governing real estate offices.
At the time, REGA gave market practitioners a 180-day grace period to regularize their status and obtain licenses.

Who Is Allowed to Practice Brokerage?

The law is clear: no one may practice real estate brokerage or provide real estate services without first obtaining a license from the Real Estate General Authority. This license is what people know as the FAL license.

Practicing brokerage without a license is a violation punishable under the law. In other words, an unlicensed "broker" has no legal standing, and you will not have adequate protection if you deal with them either.

A simple rule: No FAL license, no deal, however tempting the offer.

We have a dedicated article explaining the FAL license, its types and how to spot a legitimate property listing.

The Brokerage Contract: The Document That Protects You

It Must Be in Writing and Registered

Among the most important provisions of the law:

The brokerage contract must be in writing.
A copy must be filed with REGA through its online platform. If this is not done, the contract has no legal effect.
If the contract term is not specified, it runs for 90 days from the date it was signed.

What Must It Include?

The Implementing Regulations set out core details the contract must contain, most notably:

Details of the contracting parties (the broker and the client).
Property details: the title deed number and date, or the property number in the Real Estate Registry.
The commission rate or amount.
The contract term.

My advice to you as a client is not to settle for the bare minimum. Make sure the contract spells out exactly what the broker is expected to do (market your property? find you a plot with specific criteria?), along with the asking price or budget and any special arrangements between you.

Exclusive or Non-Exclusive?

In the market you will hear about an "exclusive contract", meaning the owner gives a single broker the sole right to market the property for the duration of the contract, and a "non-exclusive" one, meaning the owner can work with more than one broker.

The law does not require you to choose either type, so what matters most is that you read the contract before signing and understand: Have you committed to a single broker? For how long? What happens if you sell the property yourself during that period? If anything is unclear, ask for it to be clarified in writing in the contract.

Commission (Sa'i): How Much, Who Pays and When?

The Rate

For sales: the commission is 2.5% of the transaction value.
For leases: it is 2.5% of the first year's rent only.
This is the default rule unless the two parties agree otherwise in writing.

Who Pays?

It is paid by the party who contracted with the broker. So if the seller signed the brokerage contract, the seller pays the commission, unless they have agreed otherwise in writing.

When More Than One Broker Is Involved

If several brokers take part in the same transaction, the total they receive together may not exceed the set rate. In other words, each broker cannot take a separate 2.5% from the same party; they split it among themselves according to their own agreement.

When Is the Broker Entitled to the Commission?

If the transaction is completed during the contract term.
Or if it is completed within no more than two months after the contract expires, provided that the broker proves the transaction came about through their brokerage.

A practical example: You sign with a broker to market your land for 90 days. During that time, the broker brings you a buyer who inspects the land, but the sale goes through three weeks after the contract expires. In this case, the broker is entitled to the commission if they can prove this buyer came through them.

The Deposit (Arboun): What Are the Limits?

The deposit may not exceed 5% of the transaction value.
Any amount above 5% is treated as part of the price, not as a deposit.
Under the Implementing Regulations, if the transaction falls through and the deposit becomes due to the seller or landlord, the broker is entitled to one quarter of the deposit as commission.

Caution: Do not pay a deposit before verifying the title deed and the seller's identity, and make sure the deposit agreement is written and clear.

What Does the Broker Owe You?

The law and its Implementing Regulations place clear obligations on the broker, the most important being to:

Practice the activity personally if an individual, or through a licensed manager if an establishment.
Exercise due care in verifying the accuracy of information related to the property and the transaction.
Disclose the information obtained when presenting the property, and not provide misleading information.
Keep the transaction's data and information confidential, and not disclose it without written consent.
Disclose in writing to the parties to the brokerage contract any potential conflict of interest. For example, if the broker is dealing with both the seller and the buyer at the same time, or has a personal interest in the deal, they must tell you so in writing.
Refrain from any conduct that harms the interests of their clients.
State their name and license number in any listing or post about the property, and in the contracts they conclude.
Act with transparency and integrity, and deliver the service with quality and competence.

How to Verify a Broker Before Dealing With Them

REGA offers a free "Real Estate Broker Inquiry" service among its e-services. You can search using any of the following:

The broker's FAL license number.
The brokerage contract number.
The property ownership document number.

The license details and status will then be displayed. If a broker hesitates to give you their license number, that alone is a reason to stop and think.

If Something Goes Wrong: Where to Complain

You can file a complaint or report with the Real Estate General Authority (REGA) using the dedicated form on its website and e-services, including your details, the broker's details, the type of complaint and any supporting documents.
Or you can contact the customer service center on 199011.

What Penalties Apply to a Broker Who Breaks the Rules?

Under the law, penalties include a warning, suspension of the license for up to one year, revocation of the license, or a fine of up to SAR 200,000. The fine may be doubled if the violation is repeated within three years.

Common Mistakes Clients Make

Dealing with a broker who has no FAL license because they are "cheaper" or "know people".
Agreeing on the commission verbally instead of through a written, registered contract.
Signing a contract without reading the term and exclusivity clauses.
Paying a large deposit above 5% while assuming it is still a "deposit".
Assuming the other party will pay the commission without it being in writing.
Not asking for disclosure when the broker represents both parties.

The Bottom Line

Real estate brokerage today is a regulated profession: a FAL license, a written and registered contract, a clear commission, a capped deposit, and broker obligations that protect you. Know your rights before you sign, and verify the license before you pay a single riyal.

If you are looking for land in Riyadh, send your request through the Find Your Land page. If you own a property and want it marketed under a proper, registered brokerage contract, get in touch through the Market Your Property page. And before any of that, you can read How to Buy Land in Riyadh to get the full picture.

This article is general information for awareness purposes only and does not constitute legal advice. Laws and regulations may change, so always refer to the official sources: the Real Estate General Authority (REGA), the Bureau of Experts at the Council of Ministers, and the Umm Al-Qura official gazette.