Real Estate Broker Referral Agreement Template for Saudi Arabia

A Real Estate Broker Referral Agreement is a legal contract that formalizes referral relationships between licensed real estate brokers in Saudi Arabia. This document ensures that when you refer clients to another broker, both parties understand their obligations, commission structures, and compliance requirements under Saudi Arabian law. The agreement protects your interests while maintaining professional standards required by the Real Estate Broker Law.

When do you need this document?

You need this agreement when you want to establish ongoing referral relationships with other brokers who operate in different regions or specialize in specific property types. This is particularly common when you have clients interested in properties outside your primary market area, or when you receive referrals from brokers in other cities like Riyadh, Jeddah, or Dammam. The document is also essential when partnering with international brokers who have clients seeking Saudi Arabian properties, ensuring clear terms for cross-border referral arrangements. Additionally, you'll need this agreement when joining referral networks or establishing reciprocal referral relationships with other licensed professionals.

Key legal considerations

The agreement must clearly define referral fees and commission-sharing arrangements that comply with Sharia principles and Saudi regulations. You should specify the criteria for qualifying transactions to avoid disputes over when referral fees are due. Include provisions for client confidentiality and data protection, as brokers must maintain strict confidentiality regarding client information. The document should address termination procedures and how ongoing transactions will be handled if the agreement ends. Consider including dispute resolution mechanisms that comply with Saudi Arabian commercial law, potentially incorporating Islamic arbitration procedures. Professional liability and insurance requirements should be clearly stated to protect both parties.

Legal requirements in Saudi Arabia

Under Royal Decree No. M/28, both referring and receiving brokers must hold valid licenses from the Ministry of Commerce to enter into referral agreements. The agreement must comply with the Implementing Regulations of the Real Estate Broker Law, which specify operational requirements and professional standards. All commission arrangements must align with Islamic financial principles, avoiding any elements that could be considered riba (usury). The document should reference compliance with Anti-Money Laundering Law requirements, particularly regarding client due diligence obligations. Brokers must ensure the agreement doesn't conflict with their existing agency agreements or exclusive arrangements. The contract should be executed in Arabic or include certified Arabic translations for legal validity. Additionally, the agreement must specify compliance with local real estate registration requirements and any applicable municipal regulations in the relevant jurisdiction.