Article Two:

1- Shared properties shall be identified by their national address approved by the competent authority.

2- Subdivided real estate units shall be identified by a serial number, in accordance with the forms approved by the Authority.

Article Three:

Without prejudice to the right of any aggrieved party to resort to the competent court, the procedures for re-subdivision of a shared property, a real estate complex, or any part thereof, or for changing their uses, shall continue unless a suspension order is issued by the competent court.

 Article Four:

2-  The competent authority responsible for subdivision or re-subdivision shall issue a decision on the request referred to in paragraph (1) of this Article within ten (10) days from the date of completion of the requirements referred to in the same paragraph.

3- In the event of approval of the request referred to in paragraph (1) of this Article, the Authority – or any party it authorizes – shall approve the subdivision or re-subdivision and issue a document that contains the data determined by the Authority.

Article Five:

The Chairman of the Board of Directors of the Authority shall coordinate with the Minister of Justice to establish a mechanism for certifying the data contained in the subdivision document, the re-subdivision document, and the common parts document in the title deed of the shared property, the real estate complex, or the subdivided real estate unit, as the case may be.

 Article Six:

The Authority shall issue a technical guide setting out the specifications and technical standards for the subdivision and re-subdivision of properties and real estate units. 

 Article Seven:

1. The disclosure statement referred to in Article (Six) of the Law must include all information related to the specifications of the subdivided real estate unit and its annexes, all rights of the owner and obligations attached thereto, as well as a sufficient description of the shared property and real estate complex in which the unit is located, their contents, management, and ownership organization. Such information shall include the following:

a) The address of the unit.

b) The area of the unit.

c) The plan of the unit.

d) The share of the unit in the common areas.

e) The annexes of the unit, if any.

f) The fixed and movable contents of the unit.

g) A copy of the bylaws of the owners association, the bylaws of the complex association, and resolutions of the general assembly, if any. h) Mortgage contracts or usufruct contracts, including leases, relating to the unit, the shared property, or the real estate complex, if any.

i) Any restrictions on the use of any of the common areas.

j) Defects related to the unit, the shared property, or the real estate complex, if any.

k) The expected date for the commencement and completion of project construction in the case of off-plan sale or lease. The prospective purchaser shall be notified of any changes to this information through the means and at the address agreed upon between them and the owner.

2. The disclosure statement referred to in paragraph (1) of this Article shall constitute an integral part of the sale contract recorded with the competent notarization authority.

3. The Authority shall prepare templates for the disclosure statement referred to in paragraph (1) of this Article.

4. The consideration of the purchaser’s right of rescission, as provided in Article (Six/2) of the Law, shall fall within the jurisdiction of the competent court in accordance with the prescribed timeframe.

 Article Eight:

The following shall be deemed common areas in accordance with the provisions of the Law and these Regulations:

1. Any structural elements passing through a subdivided real estate unit.

2. Mechanical, electrical, electromechanical systems, and similar systems located within the subdivided real estate unit or shared with other real estate units.

3. Any part of the public service infrastructure located within the shared property or the real estate complex, unless such part is legally or contractually owned by a service provider. 

Article Nine:  

     1. Owners in shared properties located within a real estate complex may establish a complex association to manage all matters of that complex which fall outside the jurisdiction of owners associations, in accordance with the provisions of the Law, the Regulations, and the bylaws.

    2. The complex association shall have bylaws to ensure the proper utilization and sound management of the real estate complex in a manner that does not conflict with the provisions of the Law and the Regulations, and the existence of these bylaws shall be a prerequisite for association registration.

    3. The termination of the complex association shall not affect its liability for debts and obligations prior to the date of its termination.

Article Ten:    

    1. Owners of subdivided real estate units in a shared property – or their representatives – shall submit an application to the Authority – or to whomever it delegates – to register the owners association upon its establishment, in accordance with the provisions of the Law and the Regulations, within thirty (30) days from the date of establishment; otherwise, any of them may submit the registration application.

    2. Owners in the real estate complex – or their representatives – shall submit an application to the Authority – or to whomever it delegates – to register the complex association upon its establishment, in accordance with the provisions of the Law and the Regulations.

     3. Registration of the owners association or the complex association shall require the following:

a) Data of the owners of subdivided real estate units in the shared properties and their representatives, if any, as determined by the Authority.

b) Data of the shared property or the real estate complex – as applicable – as determined by the Authority, including the national address and the title deed number.

c) The bylaws.

d) Names of the members of the general assembly at the time of registration.

e) Any other requirement determined by the Authority.

Article Eleven: 

 The Authority shall maintain a special register for recording owners associations and complex associations.  Other than this, the Authority may assign registration procedures to the private sector.  These associations shall not acquire independent legal personality except after being registered in accordance with the provisions of the Law and the Regulations.

Article Twelve:

The Authority shall, within its jurisdiction, regulate the work and affairs of owners associations and complex associations without prejudice to the provisions of the Law and the Regulations. For this purpose, it may: 

   1. Issue the arrangements and decisions necessary for the governance of owners associations and complex associations, and such arrangements and decisions shall be binding upon these associations.

  2. Provide support and consultation to owners associations and complex associations.

Article Thirteen:

Owners associations and complex associations shall provide the Authority with any information it requests within the scope of its jurisdiction.

Article Fourteen:

Subject to paragraph (4) of Article (Twelve) of the Law, the bylaws must include – without prejudice to the provisions of the Law – the following provisions:

     1. Jurisdictions of the general assembly and its operating rules.

     2. Procedures for calling the general assembly meetings, determining the quorum required for valid convening, and for decision-making.

     3. Conditions required for the manager, rules for his appointment, determination of his powers, working procedures, and his remuneration, if any.

     4. Rules for signing contracts and other financial obligations.

     5. Procedures for discharging the manager.

     6. Provisions related to the use and management of the common areas.

     7. General conduct rules within the shared property or the real estate complex.

     8. Rules for determining the subscription amounts payable by owners and mechanisms for payment.

     9. Determining the start and end of the association’s fiscal year, rules for expenditure from the association’s budget, and methods for financial monitoring.

    10. A provision requiring the consent of the owner of a subdivided real estate unit for the validity of a general assembly decision on re-subdivision if it affects that unit.

    11. Rules and procedures governing the investment of funds of the owners association, the complex association, and the investable common areas.

    12. Rules applicable upon the association’s termination and its liquidation procedures.

    13. Procedures for amending the bylaws. Owners associations and complex associations – as applicable – may include additional provisions in the bylaws, provided they do not conflict with the provisions of the Law, the Regulations, and the decisions issued by the Authority in implementation thereof.

Article Fifteen:  

  1. The applicant for registration of the owners association or the complex association – as applicable – shall invite all members of the general assembly within five (5) days from the date of association registration, in accordance with the provisions governing meetings in the bylaws, provided that the period between the invitation date and the meeting date is not less than five (5) days.

  2. In its first meeting, the general assembly shall consider and take the necessary decisions regarding the following matters:

       a) The bylaws.

      b) Election of the association president.

      c) Appointment of the manager, unless an agreement is made to postpone the appointment to the second meeting.

      d) Works and expenses incurred for the establishment or creation of the association.

Article Sixteen: 

  The complex association shall represent the owners in all dispositions relating to the common areas within the real estate complex.

 Article Seventeen:

Without prejudice to the provisions of Article (Six) of the Law and Article (Seven) of the Regulations, ownership of a subdivided real estate unit in a shared property located within a real estate complex – for which a complex association has been established – shall constitute acceptance by the owner of the bylaws of the complex association and a commitment to comply with the decisions issued by the general assembly of that association.

Article Eighteen: 

 The complex association shall not restrict or limit the rights or jurisdictions of any owner or any owners association that is a member of the complex association, within the scope of the rights granted to them under the Law, the Regulations, or the bylaws of the owners association.

Article Nineteen:

  The complex association shall have a general assembly composed of one or more representatives from the owners association in each shared property located within the real estate complex, or from the owners themselves if no owners association has been established for that shared property, in accordance with the mechanism set out in the bylaws.

Article Twenty:

  The Authority may – within its jurisdiction – take any measures it deems appropriate in cases where the general assembly is unable to convene or issue decisions.

Article Twenty-One:

   1. Management of the real estate complex shall be undertaken by a manager, who may be chosen from among the owners or others, in accordance with the provisions stated in the bylaws.

   2. The complex association shall be bound by any action undertaken by the manager in the name of the association and within the scope of its purposes.

   3. The manager may, by a written decision, delegate part of their powers to another person to carry out specific tasks or works.

   4. The manager shall be liable to compensate the complex association for any damage arising from a violation of the provisions of the Law, the Regulations, or the bylaws.  All managers – in the event of multiple managers – shall be jointly liable if the damage results from a unanimous decision.  With respect to decisions made by majority vote, dissenting managers shall not be liable if they have explicitly recorded their objections in the minutes of the meeting in which the decision was issued.  Absence from the meeting shall not constitute grounds for exemption from liability unless it is proven that the absent manager was unaware of the decision or was unable to object after becoming aware of it.

Article Twenty-Two: 

  The owner who built the shared property shall have the exclusive right to appoint the manager, provided that they maintain ownership of no less than ten percent (10%) of the total number of subdivided real estate units in the shared property, in addition to the following:

1. The total number of subdivided real estate units in the shared property shall not be less than one hundred (100) units.

2. Any other conditions imposed by the Authority. For the purposes of this Article, “the builder” shall include the owner who was the first to submit the application for the subdivision of the property.

Article Twenty-Three:

    Without prejudice to the provisions of the Law and the Regulations, and taking into account what is stipulated in the bylaws and decisions issued by the general assembly, the manager shall take all necessary measures to manage the shared property or the real estate complex – as applicable – and shall, in particular, have the following powers:

1. Provide materials, services, and works necessary for the shared property or the real estate complex and their maintenance, supervise implementation, and oversee workers and contractors engaged to provide such services.

2. Collect owners’ subscriptions and other association resources lawfully established.

3. Disburse from the approved budget and take all financial measures in accordance with the powers granted to them.

4. Coordinate with the president of the general assembly to call its meetings.

5. Represent the owners association or the complex association – as applicable – before governmental and private entities or third parties.

6. Perform any other tasks assigned by the general assembly.

Article Twenty-Four:

   The Authority shall approve the decisions of the manager and the contracts for transactions they conclude, referred to in Article (Twenty-One) of the Law, in accordance with the following controls and procedures:

1. Neither the manager nor any relative up to the fourth degree shall have a direct interest in the decisions or contracts.

2 .The decisions and contracts must be within the powers granted to the manager under the Law, the Regulations, or the bylaws.

3. Any other control or procedure set by the Authority.

Article Twenty-Five: 

The manager shall perform their duties with honesty and loyalty, and must consider the interests of the shared property or the real estate complex – as applicable – ensuring that no conflicts of interest arise from such duties.

 Article Twenty-Six: 

  1. The Authority may notify the manager if any shortcomings are identified and request that such shortcomings be remedied within a period it specifies.

2. If the shortcomings are not remedied within the period specified in paragraph (1) of this Article, the Authority may – within its jurisdiction – take the necessary measures it deems appropriate.

Article Twenty-Seven:

1. The owners association or the complex association – as applicable – shall appoint an auditor licensed to work in the Kingdom in either of the following cases:

    a) If the shared property or the real estate complex includes one hundred (100) or more subdivided real estate units.

    b) If the assets of the owners association or the complex association exceed one million (1,000,000) riyals.

2. The auditor may not combine their work with membership in the general assembly, nor hold any other position related to the shared property or the real estate complex, nor may they be a partner of a general assembly member, an employee of such member, or a relative of such member up to the fourth degree.

3. The auditor shall have the right, at any time, to review the association’s books, records, and other documents, and to request any data and clarifications deemed necessary for the performance of their duties.  The manager must enable the auditor to perform their duties. If the auditor encounters difficulties in this regard, they shall document this in a report to be submitted to the general assembly.

4. The auditor shall prepare an annual report in accordance with recognized auditing standards and submit it to the general assembly. The report must include any violations of the provisions of the Law, the Regulations, or the bylaws that have been identified, if any.

5. The auditor may not disclose to third parties, or to owners outside of the general assembly, any association secrets that come to their knowledge in the course of their duties.

6. The auditor shall be liable for any damages sustained by the general assembly as a result of errors committed in the performance of their duties due to negligence or default.

7. Any decision of the general assembly approving the manager’s report and the financial statements – as submitted by the manager – without reviewing the auditor’s report shall be null and void. 

Article Twenty-Eight:

1. Without prejudice to the provisions of applicable laws, orders, decisions, and instructions, the owners association and the complex association may accept donations, gifts, bequests, and endowments, subject to the following conditions:

   a) That they do not conflict with the Law, the Regulations, or the bylaws, and are not conditioned upon achieving any private interest.

   b) That they do not include the provision of any financial or in-kind benefits to the manager or any of their subordinates.

2. Without prejudice to the condition set by the endower, donations, gifts, bequests, and endowments – whether monetary or in-kind – shall be disposed of in accordance with the financial rules and procedures governing the work of the association.

3. The association shall maintain a register to record all donations, gifts, bequests, or endowments it receives, containing information about their providers and the purposes for which they are spent.

Article Twenty-Nine:

    Without prejudice to the provisions of applicable laws, orders, decisions, and instructions, the owners association and the complex association may invest their funds in various fields.

Article Thirty:

The general assembly may decide to establish a reserve fund to cover any costs exceeding the value of the approved association budget, as specified in the bylaws. Owners may also agree to establish such a fund.

Article Thirty-One:

The association shall open a bank account in its name – in accordance with statutory procedures – at a bank licensed to operate within the Kingdom, and all funds of the association shall be deposited therein.

Article Thirty-Two: 

The general assembly shall maintain minutes of its meetings and detailed accounting books for amounts owed by owners and third parties, in registers designated for this purpose.  Each owner – or their representative – shall have the right to request to review these books.

  Article Thirty-Three: 

   All addresses, correspondence, notices, communications, statements, and reports issued by the general assembly shall be in the Arabic language, and another language may be used in addition to Arabic. Such correspondence shall be sent or delivered in accordance with what has been agreed upon.

Article Thirty-Four:

Owners who exclusively benefit from certain common areas shall bear the costs of maintaining and managing them, each in proportion to the area of their subdivided part relative to the total area of the subdivided parts benefiting from those common areas, unless otherwise agreed.

Article Thirty-Five:

Any improvements made by an owner at their own expense to any common areas or part thereof – pursuant to Article (Twenty-Six/2) of the Law – shall not constitute grounds for acquiring ownership of such areas.

Article Thirty-Six: 

 Work may be carried out inside any subdivided real estate unit for the purpose of preserving the safety of the shared property or real estate complex, or for improving the utilization or maintenance of common areas, whenever necessary, subject to the following provisions:

1. The unit owner must be notified before the commencement of the work with sufficient notice, which shall include the type of work and the specified time frame for its completion.

2. The unit shall be restored to its original condition immediately upon completion of the work and within the time frame specified in the notice.

3. Without prejudice to the obligations of the unit owner stipulated in the Law, the Regulations, and the bylaws, the unit owner shall not bear any additional costs resulting from the execution of such works, except to the extent that they are responsible for the damage caused to the shared property or the real estate complex.

4. Subject to the provisions of paragraph (3) of this Article, the unit owner shall, where necessary, be compensated for damages resulting from vacating the unit during the execution of the works, in accordance with the following:

   a) Compensation shall be equivalent to the fair market rent for such unit.

  b) Compensation shall include any additional costs incurred by the unit owner or occupant during their stay in alternative accommodation.

Article Thirty-Seven: 

  In cases where there are shared meters for any public services between subdivided real estate units or common areas, each owner shall pay the amount determined by the general assembly.

Article Thirty-Eight:  

1. All warranties relating to the construction or operation of the shared property or real estate complex shall be transferred to the owners association or complex association – as applicable – upon its establishment.

2. The property subdivider shall be responsible for rectifying all defects in the property until all valid warranties related to its construction or operation have been transferred.  This transfer shall not affect the contractual or statutory liability of the subdivider.

Article Thirty-Nine:

  The Board of Directors of the Authority shall issue the decisions and procedures necessary to implement these Regulations.

Article Forty:

These Regulations shall repeal any provisions that conflict with them.

Article Forty-One:

 These Regulations shall be published in the Official Gazette and shall take effect from the effective date of the Law.