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Development Fee Agreement for Saudi Arabia

Development Fee Agreement Template for Saudi Arabia

A Development Fee Agreement under Saudi Arabian law is a comprehensive legal document that establishes the terms and conditions for development services and associated fees in real estate and infrastructure projects. The agreement outlines the developer's responsibilities, fee structure, payment terms, and project deliverables while ensuring compliance with Saudi Arabian regulations, including Shariah law principles. It incorporates specific provisions for local regulatory requirements, development standards, and dispute resolution mechanisms aligned with Saudi jurisdiction.

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What is a Development Fee Agreement?

The Development Fee Agreement is a crucial document used in Saudi Arabia's rapidly expanding real estate and infrastructure sector. It establishes the commercial and operational framework between developers and project owners, defining the scope of development services, fee structures, and payment mechanisms. This agreement type is particularly relevant in the context of Saudi Vision 2030, which has spurred significant development activity across the Kingdom. The document addresses key aspects such as development management services, project oversight, regulatory compliance, and fee arrangements while ensuring alignment with Saudi Arabian law and Shariah principles. It's commonly used in both private and public sector developments, from commercial and residential projects to large-scale infrastructure initiatives.

What sections should be included in a Development Fee Agreement?

1. Parties: Identification and details of the contracting parties

2. Background: Context of the agreement and relationship between the parties

3. Definitions: Key terms used throughout the agreement

4. Appointment and Scope: Formal appointment of developer and detailed scope of development services

5. Developer's Obligations: Detailed responsibilities and duties of the developer

6. Client's Obligations: Responsibilities and duties of the client

7. Development Fee Structure: Detailed breakdown of fees, payment schedules, and calculation methods

8. Payment Terms: Payment mechanics, invoicing, and payment conditions

9. Project Timeline: Key milestones, delivery dates, and project phases

10. Intellectual Property: Ownership and usage rights of project-related IP

11. Confidentiality: Protection of confidential information and trade secrets

12. Term and Termination: Duration of agreement and termination provisions

13. Liability and Indemnification: Risk allocation and liability limitations

14. Force Majeure: Provisions for unforeseen circumstances and their handling

15. Governing Law and Jurisdiction: Application of Saudi law and jurisdiction

16. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment

What sections are optional to include in a Development Fee Agreement?

1. Foreign Investment Provisions: Required when developer is a foreign entity, addressing specific requirements under Saudi Foreign Investment Law

2. Zakat and Tax: Include when specific tax arrangements or Zakat implications need to be addressed

3. Insurance: Detailed insurance requirements when project specifics demand particular coverage

4. Environmental Compliance: Required for projects with significant environmental impact

5. Local Content Requirements: Include when project must meet Saudi local content requirements

6. Security Provisions: Include when performance bonds or other security arrangements are required

7. Shariah Compliance Declaration: Specific declaration of Shariah compliance when required by parties or financing arrangements

What schedules should be included in a Development Fee Agreement?

1. Schedule 1 - Scope of Services: Detailed breakdown of development services and deliverables

2. Schedule 2 - Fee Schedule: Detailed fee structure, rates, and payment milestones

3. Schedule 3 - Project Timeline: Detailed project schedule with milestones and deadlines

4. Schedule 4 - Key Personnel: List of key team members and their roles

5. Schedule 5 - Required Approvals: List of required governmental and regulatory approvals

6. Schedule 6 - Project Specifications: Technical specifications and requirements

7. Schedule 7 - Form of Reports: Templates and requirements for project reporting

8. Schedule 8 - Service Level Requirements: Performance metrics and service level expectations

9. Appendix A - Power of Attorney: If required for certain development activities

10. Appendix B - Required Forms: Standard forms for notices, changes, and approvals

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions

















































Clauses









































Relevant Industries

Real Estate

Construction

Infrastructure Development

Commercial Property

Residential Development

Industrial Development

Mixed-use Development

Hospitality

Retail Development

Urban Planning

Smart Cities

Tourism Development

Relevant Teams

Legal

Development

Commercial

Operations

Finance

Project Management

Construction

Investment

Compliance

Business Development

Property Management

Contract Administration

Relevant Roles

Development Director

Project Manager

Commercial Director

Legal Counsel

Contract Manager

Development Manager

Chief Development Officer

Real Estate Director

Investment Manager

Construction Manager

Financial Controller

Operations Director

Property Development Manager

Business Development Manager

Compliance Officer

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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