Seller Financing Addendum Template for Saudi Arabia

The Seller Financing Addendum is a crucial document used in Saudi Arabian property transactions where traditional bank financing is either unavailable or undesired. This document supplements the main purchase agreement when the seller agrees to finance part of the purchase price for the buyer. It must be structured in compliance with Sharia law principles, particularly avoiding conventional interest mechanisms, and instead utilizing accepted Islamic financing structures such as Murabaha. The addendum details payment schedules, profit calculations, security arrangements, and enforcement mechanisms, all within the framework of Saudi Arabian law and Islamic finance principles. It's particularly important in real estate transactions involving commercial or residential properties, and requires careful consideration of both local real estate regulations and Islamic banking requirements.

1. Parties: Identification of the Seller/Financier and Buyer/Purchaser with full legal names and details

2. Background: Reference to the main sale agreement and context for this financing arrangement

3. Definitions: Key terms used in the addendum, including Payment Schedule, Profit Rate, Security, and Default terms

4. Purchase Price and Payment Structure: Breakdown of the total purchase price, down payment, and financed amount

5. Payment Terms: Details of payment schedule, profit rate (Murabaha structure), and payment mechanisms

6. Security Provisions: Description of security interests, including property mortgage and additional collateral

7. Default and Remedies: Consequences of default and available remedies for the seller

8. Property Maintenance and Insurance: Requirements for property maintenance and mandatory insurance coverage

9. Transfer Restrictions: Limitations on property transfer until full payment is received

10. Governing Law and Jurisdiction: Confirmation of Saudi law application and jurisdiction

11. Execution: Signature blocks and attestation requirements