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REGA lists violations, penalties for real estate contributions law
The Real Estate General Authority offered, on Istitlaa platform, a table for violations and penalties for the real estate contributions law and its executive regulations, for public opinion no later than March 14, 2024.
Through the table, the authority aims to enhance compliance with the real estate contributions law and its executive regulations.
The project included 26 violations, and contributions were divided into three types: large, medium, and small contributions, with fines imposed on violators varying according to the size of the contribution.
The following table shows the key points of classification of violations and penalties imposed according to the real estate contributions law
Key points in table for violations and penalties imposed according to the real estate contributions law
| |||
| Penalty | Large contributions
| Medium contributions
| Small contributions
|
| Offering, advertising, marketing, or raising funds for real estate contributions without the approval of the Capital Market Authority or a license from REGA. | Referral to the Public Prosecution for investigation, and prosecution before the competent court in accordance with the provisions of Article 35 of the Law. | ||
| The licensee or the real estate contribution manager takes any decision or action if there is an existing or potential conflict of interest in this decision or action, without taking into account the method of dealing with cases of conflict of interest mentioned in the regulations. | |||
| Selling real estate contribution assets without valuing them from accredited evaluators in accordance with the accredited evaluators law. | |||
| Do not deposit the financial returns related to the real estate contribution directly into the escrow account. | |||
Submitting misinformed by license applicant before obtaining a license.
| A fine of a minimum of SAR 10,000 and a maximum of SAR 30,000, and a ban on the licensee from carrying out any work related to real estate contributions in the future for a period not exceeding five years. | ||
| The licensee, the engineering consultant, and the chartered accountant lend from the real estate contribution capital. | A fine of 1% on each person individually of the volume of the amounts lent, with a maximum of SAR 1 million for each person individually, and preventing the licensee from carrying out - in the future - any work related to real estate contributions for a period not exceeding five years. | ||
| The failure of the property owner, if he is an in-kind shareholder, to transfer ownership of the property to the real estate joint stock company after obtaining the license in accordance with the provisions of the regulations. | A fine of 0.5% of the property value, with a maximum of SAR 500,000 | ||
| The shareholder disposes of the in-kind share - by any means of disposal - of the entire share during the first year, or more than 50% of his share in the second year until the end of the real estate contribution. | A fine of 2% of the value of the in-kind share which is disposed of, with a maximum of SAR 1 million. | ||
| The contribution manager’s failure to disclose when making the decision to distribute real estate contribution profits or not to distribute profits after their approval. | A fine of minimum of SAR 20,000 and a maximum of SAR 50,000. | A fine of minimum of SAR 15,000 and a maximum of SAR 30,000. | A fine of minimum of SAR 10,000 and a maximum of SAR 20,000. |
Source : Argaam
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