The Ministry of Commerce and Industry has confirmed its warning to the Real Estate Offices about increasing the proportion of the commission on the buyer or tenant by more than 2.5% max. In case of leases renewal, the real estate office is not entitled to repeat taking the quest in accordance with the Regulations of the Real Estate Offices. This comes in the context of the Ministry`s preservation of the rights of all parties that were guaranteed by the Regulation which says not to increase the specified percentage on the buyer or tenant under any name or justification, that may oblige them to pay additional payments.
The Ministry said that 75% of the Real Estate Notifications received through the Consolidated Notification Center (1900) representing the increase in the commission rate of more than 2.5% of the value of the sale contract or lease, as well as taking other fees for services not provided, such as maintenance and property management, leading to poor Real Estate quality, especially in the Real Estate leasing market. MCI is stressing the necessity of the real estate offices to commit to the executive regulations and to adhere to what is mentioned in them.
MCI considers taking commission for sale or rent in excess of 2.5% of the contract value by any real estate office as a violation of the rules and regulations, as stated in Article IX of the Implementing Regulations of the Real Estate offices that "any real estate office does not have the right to take a sale commission of more than 2.5% of the value of the sold property as he may not get a rent commission of more than 2.5% of the value of the lease for one year, even if the contract is for a longer period or renewed for other periods, in case the office gets from the clients commissions exceeding in total the ratio set forth in this article, they should be given back without prejudice to the penalties prescribed. "
The Ministry pointed out that it would not tolerate towards any violation according to the Regulation, which included several penalties on the real estate offices, that begins with a fine of SR 25 thousand Riyals, and the closure of the office for one year, in addition to permanently revoke the license of the office in case of repetition.