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Promissory Note (Real Estate) for Saudi Arabia

Promissory Note (Real Estate) Template for Saudi Arabia

A Promissory Note (Real Estate) under Saudi Arabian law is a formal financial instrument that represents a written, unconditional promise to pay a specified sum of money related to a real estate transaction. The document must comply with both Saudi commercial regulations and Sharia law principles, particularly regarding the treatment of interest and certainty of obligations. It serves as a legally binding commitment in real estate transactions, typically used in property purchases, development projects, or real estate financing arrangements. The document must be structured to meet specific requirements under Saudi Arabian Commercial Papers Regulation and real estate laws, while maintaining Sharia compliance.

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Promissory Note (Real Estate)

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What is a Promissory Note (Real Estate)?

The Promissory Note (Real Estate) is a crucial document in Saudi Arabian real estate transactions, used to formalize payment obligations in property deals. This document type is particularly important in the Saudi Arabian context where all financial instruments must comply with both civil law requirements and Sharia principles. It serves as a legally binding promise to pay a specific amount, typically used in property purchases, development projects, or real estate financing arrangements. The note must include specific elements to be enforceable under Saudi law, such as unconditional promise to pay, definite payment date, and clear identification of parties. It's commonly used alongside purchase agreements, particularly in installment-based property transactions, and provides a legally enforceable instrument that can be used in Saudi courts for recovery of payments.

What sections should be included in a Promissory Note (Real Estate)?

1. Identification of Parties: Full legal names and details of the maker (promisor) and the payee (promisee), including their official ID numbers as per Saudi requirements

2. Date and Place of Execution: The date and location where the promissory note is executed, which is crucial for enforcement purposes

3. Unconditional Promise to Pay: Clear statement of the unconditional promise to pay a specific amount, written in both numbers and words as per Saudi requirements

4. Property Details: Description of the real estate property related to the promissory note, including title deed numbers and location

5. Payment Terms: Specific date or dates when payment is due, including the place of payment

6. Consideration Statement: Statement confirming the consideration received, ensuring Sharia compliance

7. Governing Law Declaration: Statement confirming the note is governed by Saudi law and Sharia principles

What sections are optional to include in a Promissory Note (Real Estate)?

1. Installment Schedule: Include when payment is to be made in multiple installments rather than a single payment

2. Security Provisions: Include when additional security or collateral is being provided for the promissory note

3. Witness Details: While not mandatory, witnesses can be included for additional verification

4. Joint Liability Statement: Include when there are multiple makers of the promissory note

5. Default Provisions: Include specific consequences of default when agreed upon by parties

6. Notice Requirements: Include when specific notification procedures are required between parties

What schedules should be included in a Promissory Note (Real Estate)?

1. Payment Schedule: Detailed breakdown of installment amounts and due dates, if applicable

2. Property Documentation: Copies of relevant property documentation including title deed and property plans

3. Identity Documentation: Copies of official IDs and commercial registrations of the parties

4. Authorization Documents: Powers of attorney or corporate authorizations if the note is signed by representatives

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

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions

















Clauses


















Relevant Industries

Real Estate

Banking and Finance

Construction

Property Development

Islamic Finance

Commercial Property

Residential Property

Investment and Asset Management

Legal Services

Property Management

Relevant Teams

Legal

Real Estate

Finance

Compliance

Risk Management

Property Management

Investment

Corporate Affairs

Documentation

Islamic Banking

Relevant Roles

Legal Counsel

Real Estate Manager

Property Development Director

Finance Manager

Compliance Officer

Real Estate Investment Manager

Corporate Lawyer

Property Transaction Manager

Islamic Finance Specialist

Real Estate Finance Manager

Contract Administrator

Risk Manager

Real Estate Agent

Investment Director

Legal Document Specialist

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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