# Buying off-plan in Saudi Arabia: how Wafi protects your money

> The 2024 off-plan law, escrow accounts, the 5% reservation cap, what the contract must say and what happens if handover is late.

Last verified: 2026-09-27 · Page: https://insights.kw-saudiarabia.com/guides/buying-off-plan

## Key facts

- **Law in force:** 4 April 2024
- **Maximum reservation:** 5% of the price
- **Where your money goes:** Project escrow account
- **Late handover:** Compensation ≥ equivalent rent

## The framework

Selling or leasing units before completion requires a licence under the Off-Plan Sale and Lease of Real Estate Projects Law, supervised by the Real Estate General Authority through the Wafi programme. The law and its Implementing Regulations took effect on 4 April 2024.

## Your protections

- The developer may take no more than 5% of the price as a reservation, and it must go into the project's escrow account.
- Each licensed project has one dedicated escrow account held by a licensed escrow agent (a regulated bank), not by the developer. Money is released in stages against construction progress certified by an independent engineer.
- The sale contract must include the payment schedule, compensation for late payment, compensation for late handover including the buyer's right to terminate, the project timeline and provisions on jointly owned property.
- Compensation for the developer's delay is set by agreement but may not be less than the unit's equivalent rent as determined by an accredited valuer.

## Before you pay

1. **Check the Wafi licence** Confirm the project is licensed for off-plan sale with the Real Estate General Authority before signing anything.
2. **Pay only into escrow** Every payment should go to the project's escrow account, never to the developer's operating account or to a broker.
3. **Read the delay clauses** Check the handover date, the delay compensation (at least equivalent rent) and your termination right.

> **Non-Saudi buyers** Off-plan purchases by non-Saudis are also subject to the ownership zones and the Saudi Properties portal — see the foreign-ownership guide.

## Frequently asked questions

### Can a developer ask for 10% to reserve a unit?

No. The reservation is capped at 5% of the price and must be paid into the escrow account.

### What if the project is delayed?

You are owed compensation of at least the unit's equivalent rent, and the contract must set out your right to terminate.

## Sources

1. The new Off Plan Real Estate Law in the Kingdom of Saudi Arabia, Trowers & Hamlins (2024-11): https://www.trowers.com/insights/2024/november/the-new-off-plan-real-estate-law-in-the-kingdom-of-saudi-arabia
2. Implementing Regulations of the Off-Plan Sale and Lease of Real Estate Projects Law, Real Estate General Authority: https://rega.gov.sa/en/rules-regulations-and-guidelines/regulations/implementing-regulations-of-the-off-plan-sale-and-lease-of-real-estate-projects-law/
3. Wafi — Off-Plan Sales and Lease, Real Estate General Authority: https://rega.gov.sa/en/rega-services/platforms/wafi-off-plan-sales-and-lease/
4. Real estate escrow accounts in Saudi Arabia: off-plan buyer guide, Al Rossais Law Firm: https://alrossais.com/en/real-estate-escrow-accounts-in-saudi-arabia/