Saudi RegulationsWafi Program
Synonyms: WAFI، Off-Plan Sales and Lease Program، Off-Plan Licensing Platform
Last updated: 2026-09-25
Short Definition
Wafi is Saudi Arabia’s official programme and platform for regulating off-plan sales and leases of real estate projects.
Overview
Wafi is Saudi Arabia’s official programme and platform for regulating off-plan sales and leases of real estate projects. Operating under the supervision of the Real Estate General Authority (REGA), it qualifies and registers developers, issues project and marketing licences, and oversees the escrow accounts into which buyers’ money is paid. An off-plan sale is the sale of units or developed land before construction or development is complete, against instalments the buyer pays during the build.
Wafi now rests on the Off-Plan Sale and Lease of Real Estate Projects Law issued by Royal Decree M/44 dated 10/3/1445H, based on Council of Ministers Resolution No. 196 dated 4/3/1445H; it was published on 5 January 2024 and took effect 90 days later. The Law requires developers to be entered in the developers’ register, bans advertising a project or holding exhibitions for it before it is licensed (Article 3), and requires documents such as a valid building permit and a valid title deed for a project licence (Article 6). The escrow account may be used only for the licensed project and cannot be attached by the developer’s creditors (Article 10); withdrawals require a document signed by the developer, the consulting engineer and the chartered accountant (Article 11), and non-construction expenses may not exceed 20% of the value of each unit sold (Article 12).
Under REGA’s rules, a developer may not receive more than 5% of a unit’s value as a reservation payment during the marketing stage. If handover is delayed for reasons within the developer’s control, the buyer is entitled to compensation — a pre-set amount for developed land or fair rent for residential units (Article 20). Penalties are severe: fines of up to SAR 1 million for violations (Article 21), and up to five years’ imprisonment, a fine of up to SAR 10 million, or both, for selling off-plan or collecting buyers’ money without a licence, or failing to deposit reservation money in the escrow account (Article 24). A buyer’s first two questions should therefore be: is the project licensed on Wafi, and am I paying straight into its escrow account?
⚖️ Legal Basis
Off-Plan Sale and Lease of Real Estate Projects Law issued by Royal Decree M/44 dated 10/3/1445H and Council of Ministers Resolution No. 196 dated 4/3/1445H, effective 90 days after publication on 23/6/1445H (5 January 2024): Articles 3, 6, 10–12, 20, 21 and 24. Its implementing regulations and REGA’s rules apply, including the cap on reservation payments at 5% of the unit value during marketing. REGA supervises the market through the Wafi platform.
💡 Practical Example
Noura buys an off-plan flat in north Riyadh for SAR 900,000 in a project licensed through Wafi. During the marketing stage she pays a reservation amount of SAR 45,000 — 5%, the maximum — directly into the project’s escrow account rather than to the developer. Her remaining instalments follow the contract schedule into the escrow account, and nothing is released to the developer without a disbursement document signed by the developer, the consulting engineer and the chartered accountant; administrative, marketing and other non-construction spending may not exceed 20% of her unit’s value (SAR 180,000). If handover slips past the contractual date for reasons within the developer’s control, Noura is entitled to fair-rent compensation for the delay. By contrast, if a marketer offered her another project at a 15% discount on condition of paying into a personal account, and the project did not appear on Wafi, that would be a serious red flag and an offence that can carry imprisonment.
⚠️ Common Mistakes
- ✗Paying into the developer’s personal or company account instead of the escrow account — this strips the buyer of the Law’s core protection.
- ✗Buying off an advert or exhibition without checking the project’s Wafi licence — advertising before licensing is itself a violation.
- ✗Paying a reservation amount above 5% of the unit value during the marketing stage.
- ✗Overlooking the handover date and compensation mechanism in the contract — delay compensation is a statutory right, and clear dates make it easier to claim.
- ✗Confusing the building permit with the Wafi licence — the permit is one licensing requirement but is not enough on its own to sell off-plan.
🌍 International Differences
Many markets protect off-plan buyers through escrow accounts. In Dubai, developers must pay buyers’ instalments into project-specific escrow accounts and register the project with the regulator. In Turkey such sales are known as projeden satış and fall under consumer-protection rules on prepaid housing sales, which require a formal contract. In Egypt off-plan sales are common under more fragmented rules. Saudi Arabia stands out for explicit criminal penalties of up to five years’ imprisonment and a SAR 10 million fine, a 5% cap on reservation payments, and escrow withdrawals that require sign-off by a consulting engineer and a chartered accountant.
FAQs
What is the Wafi programme?▾
Wafi is the official platform regulating off-plan sales and leases of real estate projects under the supervision of the Real Estate General Authority; it licenses projects, registers developers and oversees escrow accounts.
How can I check that an off-plan project is legitimate?▾
Confirm that the project holds a licence issued through Wafi and that payments go into a dedicated project escrow account at a licensed bank, not into the developer’s own account.
What is the maximum reservation payment for an off-plan unit?▾
During the marketing stage a developer may not receive more than 5% of each unit’s value, under REGA’s rules, and the amount must be deposited in the escrow account.
What are my rights if the developer delivers late?▾
If the delay is for reasons within the developer’s control, the buyer is entitled to compensation — a pre-set amount for developed land, or fair rent for a residential unit — under Article 20 of the Law.
What is the penalty for selling off-plan without a licence?▾
Imprisonment of up to five years, a fine of up to SAR 10 million, or both, under Article 24 of the Off-Plan Sale and Lease of Real Estate Projects Law.
