Can a real estate office charge commission without a FAL licence?

Article 4 of the law says brokerage and real estate services may only be practised after obtaining a REGA licence. The law defines a real estate broker as a licensed natural or legal person, and commission as the amount the broker is entitled to for brokerage.

Article 7 requires the brokerage contract to be in writing and to have a set term (90 days from signing if none is agreed), and the broker must deposit a copy with REGA. Under Article 15, commission is due when the deal is completed under the contract while it is in force, or within two months after it ends if the broker proves his role. Al-Watan reported on 30 November 2023 that a court dismissed a SAR 30,000 commission claim because the brokerage contract had not been written and deposited with REGA.

Article 18 makes unlicensed brokerage or real estate services a violation, and Article 19 allows one or more of these penalties: a warning, suspension of up to one year, cancellation of the licence, and a fine of up to SAR 200,000, which may be doubled for a repeat within three years. If another law punishes the same act more harshly, the harsher penalty applies (Article 21).

Working after a licence has expired is a separate violation with lower fines: SAR 1,000, then 2,000, then 4,000 in Category A. For practising with no licence at all, the violations table annexed to the Implementing Regulation sets the fine by where the violation takes place:

A brokerage office needs a licence in its own right: the firm must hold a valid commercial registration covering the licensed activities and have a qualified responsible manager. Everyone who provides real estate services in a licensed firm must pass the qualifying programme and be registered on REGA’s platform before practising. The broker must also show its name and licence number in every property ad and put the licence number in the brokerage contract and all its dealings.