Owners’ association law in Saudi Arabia

When must an owners’ association be formed and registered?

The law requires the owners of separated units in a shared property to form an owners’ association once there are three or more of them, and to register it with REGA. For off-plan sales, registration runs from the date the second unit starts to be handed over. The association gains its own legal personality and financial estate only once registered.

In practice, registration happens on REGA’s Mullak platform, which also handles joining an association, registering units and applying to chair one. The statutory steps come down to:

1. Gather the data of the shared property, its units and owners, including the national address and title deed number.
2. Prepare the association’s bylaws, a condition of registration.
3. Apply for registration on Mullak within thirty days of formation, with the names of the general assembly’s members.
4. Call the general assembly’s first meeting to consider the bylaws, elect the chairman and appoint the manager.

The difference between owners’ association law (the regulation) and an owners’ association management system (the software)

Because «نظام» carries both meanings, the two are often confused. Owners’ association law is the law issued by royal decree and its regulation: who must form an association, its bodies, how it decides, and what each owner owes. An owners’ association management system is software a union uses for its everyday work: the unit and owner registry, maintenance reports, facility bookings and contact with residents.

The law says what must happen; the software helps with how. The law tasks the manager with maintenance and supervising contractors, but not with how a resident’s water-leak report reaches the technician and is followed to closure. Statutory procedures, such as registration, electing the chairman and approving fees, stay on Mullak and with REGA, and no private software replaces them.

• Owners’ association law (the regulation): binding legislation setting the association’s rights, duties and bodies.
• Mullak: REGA’s official platform for registering associations and units and their statutory procedures.
• Owners’ association management system (the software): a tool the union chooses for its everyday work.

The owners’ association’s bodies and their powers

The law and its regulation divide powers between the association’s bodies, and the bylaws fill in details such as the meeting quorum.

The general assembly

It is made up of all the owners. Its powers include approving the manager’s report and the annual budget, appointing the manager and the auditor and setting their fees, discharging the manager, and amending the bylaws. It meets at least once a year, within three months of the end of the financial year, and its decisions are valid when approved by owners holding at least three quarters of the total area of the separated units, unless the bylaws set a higher share.

The association’s chairman

Elected by the general assembly from its members for three years, renewable, the chairman presides over its meetings and follows up its decisions. Mullak explains that the chairman cannot set fees or amend the bylaws alone. See the chairman’s duties.

The property manager

The manager, an owner or an outsider, provides maintenance services and supervises contractors, collects owners’ contributions, spends from the approved budget, and represents the association. The manager prepares the draft budget and the financial statements and gives REGA and every owner a copy. Mullak notes that a property manager must be licensed.

The auditor

The regulation requires a licensed auditor when the property has 100 or more separated units, or the association’s assets exceed SAR 1 million.

Owners’ obligations: contributions and expenses

The law requires every owner to pay their contribution to the costs of managing the shared property and maintaining its common parts, and no owner may give up their share in the common parts to escape them. Each owner contributes in proportion to their unit’s area against the total area of the separated units, and contributions may differ by use in a mixed-use property.

Owning a unit in a property with an owners’ association counts as accepting its bylaws and the general assembly’s decisions. An owner who lets their unit stays bound towards the association unless agreed otherwise with the tenant. For more, see the guide to owners’ association fees.

• The association’s resources: owners’ contributions, donations, gifts, bequests and endowments, and investment returns.
• Its money is kept in a bank account in its name at a bank licensed in the Kingdom.
• Every owner may ask to see the meeting minutes and account books.

How are disputes handled in an owners’ association?

The law sets no single procedure for every dispute; it spreads the tools between the bylaws, the general assembly, REGA and the courts. Most everyday disputes, such as the use of facilities and rules of conduct, are settled by the bylaws and by general assembly decisions that bind all owners. For serious disputes, consult a licensed lawyer: this guide is general information.

• Enforceability: the manager’s decisions and contracts on the shared property, within the manager’s powers, become an enforceable instrument against owners under the Enforcement Law once approved by REGA, which matters when contributions go unpaid.
• REGA’s role: REGA may send a representative to general assembly meetings, act when the assembly cannot meet, and notify the manager of shortcomings and ask for them to be fixed.
• Liability: the manager compensates for damage caused by breaching the law or the bylaws.
• The courts: an affected party may go to the competent court, for example over re-subdivision.

From law to practice: practical steps for the union’s chairman

Steps that help the chairman and board apply the law every day; for the full picture, see the complete guide to owners’ associations:

1. Make sure the association is registered on Mullak and its owner and unit data are up to date.
2. Read your association’s bylaws: they set the meeting rules, the quorum and the manager’s powers.
3. Ask the manager to prepare the draft annual budget and present it to the general assembly.
4. Make sure the general assembly meets every year on time, and keep its minutes.
5. Run everyday work, from maintenance to bookings, in one management system the board and owners can see.