Off-plan sales let a developer fund part of a project from buyers' payments, but the activity is tightly regulated to protect those funds. It is governed by the Law on Off-Plan Sale and Lease of Real Estate Projects, issued by Council of Ministers Resolution No. 196 dated 4/3/1445 AH, and the Implementing Regulations issued by Real Estate General Authority Board Resolution No. (Q/M/E/H/8/2024/T) dated 20/10/1445 AH and published in Umm Al-Qura. The Real Estate General Authority (REGA) supervises the activity through the "Wafi" programme.
REGA's Powers
Article Two of the Regulations states that REGA is responsible for issuing the procedural guide and implementing decisions, registering developers, licensing projects, and monitoring and inspecting all aspects of the activity.
Step One: Registering in the Developers' Register
Article Three of the Law states that no developer may practise the activity unless registered in the developers' register, and no project may be advertised or exhibited unless it is licensed. The Regulations require a legal entity to hold a valid commercial registration and score a minimum of 35 out of 100 points, and a natural person 35 out of 55, on criteria covering financial, technical and institutional capabilities. Read: How long Wafi licensing takes.
Step Two: The Project Marketing Licence (Optional, Before Licensing)
- A developer may request it before the project licence by providing the title deed number, the marketing contract with a broker if any, the development contract with the landowner if any, and the architectural designs and engineering drawings.
- REGA decides within 10 working days of the application being complete.
- It lasts no more than 180 days.
- If the developer receives reservation payments during it, they must not exceed 5% of the unit value and are deposited in the escrow account; if the licence is not completed, REGA returns the money to its owners.
Step Three: The Project Licence
Requirements under Article Eleven of the Regulations include:
- A feasibility study covering financial, construction and marketing data, delivery period and funding sources.
- A letter from the "Etmam" Developers Services Center or any authority responsible for building permits confirming that the project matches the building permit requirements, engineering drawings and architectural designs.
- The approved unit sorting record if the project contains sorted units.
- A letter from the property owner consenting to annotating the deed with a restriction on disposal until development is complete, except for properties under the real estate registry.
- The required evaluation points, depending on area:
| Project area | Points required of the developer |
|---|---|
| Individual developer's project | 35 points or more |
| Legal entity, built-up area below 15,000 m² | 35 points or more |
| Legal entity, below 25,000 m² | 45 points or more |
| Legal entity, above 25,000 m² | 55 points or more |
Read: The engineering documents for a Wafi file.
The Escrow Account
Article Nine of the Law requires a separate escrow account in the name of each project, activated only after licensing and annotation of the deed. Article Eleven states that withdrawals are made under a disbursement document signed by the developer, the consulting office and the chartered accountant. Read: The escrow account: how it protects buyers.
The Project Parties and Their Roles
| Party | Core role |
|---|---|
| Developer | Building to specification, depositing funds directly into the escrow account, and giving buyers the as-built drawings |
| Consulting office | Certifying disbursement documents, progress reports, and reporting violations |
| Chartered accountant | Auditing deposits and escrow account reports |
| Bank | Managing the escrow account under an agreement with defined terms |
| REGA | Licensing, oversight and handling distressed projects |
Read: The engineering consultant in Wafi: conditions and responsibilities.
Individual Developers
Article Twelve requires that a natural person's project have a built-up area of no more than 5,000 m², a construction period of no more than three years, and no more than three projects a year.
All the Stages
Read: The stages of an off-plan project, from licensing to handover.
Frequently Asked Questions
Can a project be advertised before it is licensed?
No; Article Three of the Law prohibits advertising or exhibiting any project that is not licensed.
How much can be taken as a reservation before licensing?
During the marketing licence, no more than 5% of the unit value, deposited in the escrow account.
What is the Etmam letter?
A letter from the Etmam Developers Services Center or the building permit authority confirming that the project matches the permit requirements and drawings.
Who signs the disbursement document?
The developer, the consulting office and the chartered accountant.
Can the project be split into phases?
Yes, it may be divided into zones with REGA's approval, each with its own escrow account and separate engineering and financial reports.
Can the drawings be changed after licensing?
The approved construction drawings may not be changed without the approval of REGA and the buyers or tenants.
How Abak Engineering Consultancy Helps
Abak is an accredited engineering office in Riyadh offering integrated services, from design and licensing to supervision and surveying. Learn about our Wafi licence file preparation service, or For professional support, see our Pre-Submission Engineering File Review service. contact us to review your case.
Read also: Wafi: the complete off-plan sales guide for developers.
Regulatory information is based on the Balady platform and the Ministry of Municipalities and Housing, and procedures may be updated by the competent authority. Last reviewed: October 2026.