Real Estate Loan Agreement Template for Saudi Arabia

The Real Estate Loan Agreement serves as the primary legal instrument for property financing in Saudi Arabia, structured to comply with both civil law requirements and Islamic finance principles. This document is essential when a financial institution provides real estate financing to individuals or entities for property purchase, construction, or refinancing. It incorporates recent reforms in Saudi Arabian real estate financing laws, including the Real Estate Finance Law and SAMA regulations, while ensuring Sharia compliance through approved financing structures like Murabaha or Ijara. The agreement comprehensively covers financing terms, security arrangements, borrower obligations, and lender rights, with specific attention to consumer protection requirements and the unique aspects of Islamic finance in the Saudi Arabian market.

1. Parties: Identification of the lender/financial institution and borrower with full legal names and details

2. Background: Context of the agreement including property details and purpose of financing

3. Definitions: Comprehensive list of defined terms used throughout the agreement

4. Sharia Compliance Declaration: Statement confirming the agreement's compliance with Islamic finance principles

5. Facility Details: Specific details of the financing including amount, term, and payment structure

6. Financing Structure: Details of the Islamic financing structure (e.g., Murabaha or Ijara) being used

7. Conditions Precedent: Prerequisites that must be satisfied before the financing becomes effective

8. Payment Terms: Detailed payment obligations including profit rate, payment dates, and calculation methods

9. Security Arrangements: Details of mortgage/charge over the property and any additional security

10. Representations and Warranties: Statements of fact and assurances given by the borrower

11. Borrower Covenants: Ongoing obligations and restrictions on the borrower

12. Events of Default: Circumstances that would constitute a breach and trigger enforcement rights

13. Enforcement Rights: Lender's rights and remedies in case of default

14. Property Maintenance and Insurance: Requirements for property upkeep and mandatory insurance coverage

15. Assignment and Transfer: Rules regarding transfer of rights under the agreement

16. Notices: Communication procedures between parties

17. Governing Law and Jurisdiction: Confirmation of Saudi law application and dispute resolution process