Broker Fee Split Agreement Template for Saudi Arabia

A Broker Fee Split Agreement is a legally binding contract that governs how licensed real estate professionals in Saudi Arabia share commissions from collaborative property transactions. This document ensures transparent financial arrangements while maintaining compliance with Saudi real estate regulations and professional standards established by the Ministry of Municipal and Rural Affairs.

When do you need this document?

You need a Broker Fee Split Agreement when collaborating with other licensed brokers or agencies on property sales, leases, or management services. This is particularly common when you're working outside your primary territory, handling specialized property types that require additional expertise, or partnering with agencies that have exclusive listings. The agreement is also essential when joining referral networks, participating in multiple listing services, or establishing ongoing partnerships with other real estate professionals. Given Saudi Arabia's expanding real estate market and the increasing complexity of property transactions, having a formal fee-sharing arrangement protects your interests and ensures regulatory compliance.

Key legal considerations

Your agreement must clearly define commission percentages, payment terms, and each party's specific responsibilities in the transaction process. Include detailed provisions for handling client relationships, territorial boundaries, and proprietary information protection. Address dispute resolution mechanisms and termination procedures to prevent conflicts. The contract should specify which party handles client communications, marketing activities, and transaction documentation. Consider including force majeure clauses and provisions for handling regulatory changes. Ensure all commission payments comply with VAT requirements under Royal Decree No. M/113, including proper invoicing and 15% VAT collection on brokerage services.

Legal requirements in Saudi Arabia

Under the Real Estate Broker Regulation (Ministerial Resolution No. 334 of 1398 H.), all parties to a fee split agreement must hold valid real estate licenses and maintain compliance with professional conduct standards. Your agreement must incorporate anti-money laundering provisions as required by Royal Decree No. M/20 of 1439 H., including proper client identification and transaction reporting procedures. If executing the agreement electronically, ensure compliance with the Electronic Transactions Law (Royal Decree No. M/18 of 1428 H.) regarding digital signatures and electronic contract validity. All financial arrangements must align with SAMA regulations for commercial transactions, and commission payments must be processed through licensed financial institutions. The agreement should reference applicable Commercial Courts Law provisions (Royal Decree No. M/93 of 1441 H.) for dispute resolution and specify Saudi Arabian jurisdiction for any legal proceedings.