How Saudi off-plan buyers' money is held in escrow
Saudi off-plan developers must run buyer and lender money through one escrow account. Land, debt and marketing all have to fit inside 20% of units sold.
Developers can spend at most 20% of off-plan sales on anything other than construction, and that 20% must also cover land and debt. Paying for the land, repaying the bank and marketing the scheme all have to fit inside that share of the value of units sold (Law, Art. 12). Buyers can be asked for a reservation fee of up to 5% of unit value (Regulations, Art. 10).
All the project's money goes in
The Law defines the escrow account as the place where money from "the project's financiers, purchasers, or lessees" is deposited, and it names lenders first. So a bank loan for a licensed project goes into the same account as buyers' instalments. Each project gets one account, and if REGA splits a project into scopes, each scope gets its own (Regulations, Art. 13).
For a lender, the useful line is Article 10(1): the balance "may not be attached for the benefit of the developer's creditors". The company's other debts cannot reach it.
Land and debt share the 20%
Read on its own, Article 12 looks like a limit on sales commissions and overheads. Article 29 of the Regulations changes that. It names just two non-construction items, payment of the land value to the owner and repayment of financing, so both compete with marketing for the same 20%.
How tight that is depends on what land costs relative to the project's value in a given city. No Saudi source publishes that ratio, and we have not tried to estimate a national figure.
Three signatures on every payment
The developer, the consulting firm and a certified public accountant all sign each payment order (Law, Art. 11). REGA can also order payments on its own in five cases, such as refunds to buyers or moving the balance to a replacement developer. For a project in "financial trouble", its committee can limit spending to construction only.
Getting surplus cash out
A developer can take out cash above the cost to complete, with REGA approval, but 20% of that surplus stays in the account until completion. Then 5% of construction cost is held for another year (Law, Art. 14), or released early against a hidden-defects insurance policy. If defects are found, REGA can extend the hold by six months.
How much sits in escrow
In 2023, REGA licensed 101,942 units for off-plan sale and recorded 3,640 residential units completed (REGA). Most of the units licensed in 2023 were not due for delivery that year, so this is not a completion rate. It does show how long cash stays locked in these accounts.
By end-H1 2025 the live stock was 654 projects with SAR 508bn of estimated sale value, which is what the units would fetch, not the cash on deposit (REGA via Osoul Misr). Nobody publishes how much money actually sits in these accounts, not REGA, SAMA or the banks.
The account itself costs little by comparison. Al Rajhi charges SAR 25,000 to set one up and SAR 5,000 a month to run it, which comes to SAR 205,000 over three years. A four-scope project pays that four times. It is the only bank price list we found.
Three-year fee: SAR 25,000 + 36 × SAR 5,000. Source: Al Rajhi Bank tariff.
Outlook
Since November 2025 REGA has issued off-plan licences instantly, with the stated aim of helping developers get financing faster. Developers planning a phased scheme should still model the 20% cap with land and debt inside it before they price the first phase. For the licensing side, see off-plan sales in Saudi Arabia, and for lending, the Saudi mortgage market.
Ask for the off-plan escrow brief
Sources
- Law of Selling and Leasing Off-Plan Real Estate Projects, Royal Decree M/44: link
- REGA, Implementing Regulations: link
- REGA, Technical Guide for Delayed and Troubled Projects: link
- REGA, instant licensing for off-plan sales (18 November 2025): link
- REGA, Wafi 2023 results: link
- Osoul Misr, REGA statistics at end-H1 2025: link
- Al Rajhi Bank, escrow account tariff: link