Vacation Ownership Investment Confernce 4

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Time share law in KSA

Time share law in KSA

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  • 1. Timeshare Law & Executive Charter for Tourism Real-Estate Units in Saudi Arabia 11-March-2008 www.sct.gov.sa www.sauditourism.com.sa www.mas.gov.sa 4 th Annual VACATION OWNERSHIP INVESTMENT CONFERNCE
  • 2. Table of Content
    • Tourism Vision.
    • Timeshare background in KSA.
    • Main Articles of the Law.
    • The Main Aspects of the Law and the Executive Charter in the Kingdom of Saudi Arabia.
  • 3. Tourism Vision “ As the cradle of Islam, we the Kingdom Of Saudi Arabia aim to develop sustainable tourism for the socio-cultural, environmental and economic benefit of all, reflecting our cherished Islamic values heritage and traditional hospitality” 1
  • 4. 2 Timeshare law background in KSA
      • The idea of Regulated the Timeshare in Saudi Arabia started in (06/11/1999).
      • SCT involved in drafting the law in (23/04/2002).
      • The Council of Ministers Approve Timeshare law in (30/05/2006).
      • Royal Decree was issued (13/09/2006), approving Timeshare, and assigned the SCT with issuing the Executive Charter.
    2
  • 5. The Executive Charter background The Executive Charter was developed by professional team of SCT employees. The Charter was based on best practices of USA, Spain, Malta, UK, EU, Oman, Tunisia, & Egypt It was submitted in (12/03/2003) for final approval…… President of SCT Board of Director, (Approving the Executive Charter) in 23/05/2007….. 3
  • 6. Main Aspects of the Law & the Executive Charter in the Kingdom Timeshare contracts not less than three years. The purchaser have the right to cancel the contract without any reason within ten days or within three months …. 4
  • 7. Main Aspects of the Law & the Executive Charter in the Kingdom Allowed a one-year notice for the current participants to correct their status according to the adopted Law. Defined a maximum financial penalties up to SR. (500.000) = ($ 133.000). 5
  • 8. Main Aspects of the Law & the Executive Charter in the Kingdom Licensing and Registration Requirements they are two types as follows: 1) real-estate licenses 2) marketing the units (inside or outside the Kingdom.) 6
  • 9. Main Aspects of the Law & the Executive Charter in the Kingdom Minimum requirements (40) units for Timeshare practice The establishment should not be less than four-star hotel standards 7
  • 10. Main Aspects of the Law & the Executive Charter in the Kingdom the vender must contract w/ financial accountant if the project is under construction…. 8
  • 11. Main Aspects of the Law & the Executive Charter in the Kingdom Management and operating co. to (Ensure the quality & services standards). 9
  • 12. Main Aspects of the Law & the Executive Charter in the Kingdom The vendor should not sign a contract for a timeshare units in Makkah or Maddinah for a period exceeding 2 years………….. 10
  • 13. Main Aspects of the Law & the Executive Charter in the Kingdom For real-estates located in Makkah and Maddinah the number of contracts signed with one purchaser must not exceed 30% of real-estate units………………. 11
  • 14. Main Aspects of the Law & the Executive Charter in the Kingdom Guarantees for Timeshare Practicing License: The title deed must be marked in writing by the Notary that the property contains units mortgaged to the Timeshare practice and shall not be sold without a written approval from the SCT. 12
  • 15. Main Aspects of the Law & the Executive Charter in the Kingdom The vendor must provide a bank warrantees for RS.(25) thousand / per unit for real-estates in KSA & abroad….. 13
  • 16. Main Aspects of the Law & the Executive Charter in the Kingdom Issuing a Marketing License: A bank warrantee accounting for SR. (500.000) per real-estate to issue a marketing license………. 14
  • 17. Main Aspects of the Law & the Executive Charter in the Kingdom The time share system must be legally authorized in the country where the property is located (for units outside KSA)…… 15
  • 18. Main Aspects of the Law & the Executive Charter in the Kingdom An independent committee is formed for Investigation & Violations it shows how to investigate and resolve the violations according to the law…. 16
  • 19. Timeshare Effects on Promoting Real Estate Investment in the Kingdom Excellent accommodation units in the kingdom are limited,(73%) of them are located in Makkah surrounding the holy areas. In Madinah surrounding the Holy Prophet's Mosque it’s (8.6%) . 17
  • 20. Main Aspects of the Law & the Executive Charter in the Kingdom In Riyadh 7.5%, whereas all other areas of the kingdom have only 10.6%. This situation needs a new approach that would place tourism investment projects at the tourism components areas instead of being attracted to the current areas. 18
  • 21. 19 Time Share idea succeeded and developed in a short period of time. Due to the increase of all elements of the industry and the price increase, the goal of the investor to sell the units of his project to meets the goal of the purchaser to have another home to spend his vacation . So, the time share idea emerged and became a vital component of the tourism industry. Conclusion 19
  • 22. Thank You…. www.sct.gov.sa www.sauditourism.com.sa www.mas.gov.sa