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How Did the Saudi Civil Transactions Law Regulate Real Estate Gift Conditions?

Real estate gifting is considered one of the legal and Sharia-compliant transactions aimed at transferring ownership between individuals without compensation. Real estate gifting under Saudi law is governed by a set of provisions that protect the rights of both the donor and the recipient.

Real estate gifting procedures require official documentation with the Ministry of Justice, and the gift is not valid unless certain conditions are met.

In this article, we will explain the conditions for gifting real estate, the meaning of a gift, the necessary steps for transferring ownership of gifted real estate, and the best law firm to assist you in this matter.

The Concept of a Gift Under Saudi Law

A gift refers to a legal act through which ownership of specific property is transferred from the donor to the recipient without compensation or financial consideration. It is a transaction based on mutual consent between the parties and requires the intention of giving without financial return.

Saudi Arabia has established a set of procedures and conditions that regulate the gifting process and aim to protect the rights of all parties.

Conditions for Gifting Real Estate

Below, we explain the conditions for gifting real estate in Saudi Arabia as follows:

The Form Requirement:

This condition includes an offer from the donor. The wording must not be conditional; rather, it must be immediately effective, and there must be acceptance by the recipient.

The Capacity Requirement:

This condition relates to the donor, who must have the legal capacity to donate, not merely the capacity to dispose of property. This is because a gift is not considered a commutative contract that creates obligations for both parties.

The Lawful Cause Requirement:

The reason for the gift must be lawful and must not violate public morals or public order, such as where the reason for the gift is an unlawful relationship between the donor and the recipient.

The Consent Requirement:

The donor must not be forced to gift the property, and the recipient must also accept the property. The recipient may reject the gift and refuse to accept it.

The Ownership of the Gifted Property Requirement:

A donor may not gift something they do not own. If this occurs, it depends on the approval of the true owner.

No Financial Compensation:

If the gift is made in exchange for financial compensation, it becomes a commutative contract rather than a donation contract. Accordingly, it becomes subject to the provisions governing commutative contracts and may then be considered a barter contract or a sale contract, depending on the agreed compensation.

Transfer of Real Estate Ownership:

One specific condition for gifting real estate is that the donor must transfer ownership of the real estate to the recipient through the real estate registry records in the Kingdom.

Steps for Transferring Ownership of Gifted Real Estate

After discussing the conditions for gifting real estate, we will explain the most important steps required to transfer ownership of the gifted real estate as follows:

Verifying the Legal Conditions:

The legal conditions related to the gift must be verified, such as the donor’s legal capacity and the fact that the gift is free of any financial compensation.

Documenting the Contract:

The contract must be documented by booking through the Najiz electronic platform for notarization before a notary public, while submitting the title deed of the gifted real estate and all required information.

Completing Registration of the Gift in the Real Estate Registry:

The gift must be fully registered in the real estate registry to ensure that ownership is transferred legally and completely. If the gift is between relatives, there will be no taxes on the transfer of ownership.

How Did the Saudi Civil Transactions Law Regulate the Conditions for Gifting Real Estate?

The Saudi Civil Transactions Law has precisely regulated the conditions for gifting real estate by clarifying the requirements necessary for its validity.

Article (366) of the Law states:

“A gift is a contract under which the donor, during their lifetime, transfers ownership of property to the recipient without compensation.”

This article clarifies that a gift is a legal act of donation through which ownership of property, whether movable or real estate, is transferred from one person to another without compensation or financial consideration, provided that this takes place during the donor’s lifetime and by their will.

Article (367) of the Law also states:

“1- The donor may require the recipient to fulfill a specific obligation.

2- If the donor requires compensation from the recipient, the contract shall be a commutative contract, and the provisions of commutative contracts shall apply to it according to the nature of the compensation.”

This article shows that the basic principle of a gift is that it is without compensation. However, the donor may attach a condition to it, such as requiring the recipient to bear a certain expense or perform a specific act, provided that the condition does not become financial compensation.

Article (368) of the Saudi Civil Transactions Law also provides:

“1- If the gifted property is real estate, the gift shall not be concluded unless it is documented in accordance with the statutory provisions.

2- If the gifted property is movable property, the gift shall not be concluded unless it is documented in accordance with the statutory provisions or by delivery, even without documentation.”

This article makes clear that a gift of real estate is only valid if it is officially documented before the competent authorities.

As for gifts related to movable property, they may be completed either by actual delivery to the recipient or through documentation.

The Role of a Lawyer in Completing a Real Estate Gift

A lawyer plays an important role in matters related to the conditions for gifting real estate by providing the necessary legal consultations that protect the rights of the parties and helping them complete all required legal procedures.

Nawaf bin Awad Al-Harbi Law Firm is considered one of the best law firms, with lawyers specialized in gift contracts and various legal cases. The firm provides comprehensive services in this field, such as:

Contact the best real estate cases lawyer now to facilitate real estate gifting procedures, ensure proper legal documentation, and protect your rights as a donor or recipient under Saudi law.

Conclusion

We have explained the conditions for gifting real estate that must be met for the gift contract between the parties to be valid and legal. It is an important contract regulated by Saudi law to ensure it is properly completed between the parties, with specific conditions and standards. You may seek the assistance of a specialized lawyer to ensure the gifting procedures are completed correctly and legally.

Frequently Asked Questions

What are the conditions for a valid gift?

The conditions for a valid gift include that the donor must have the legal capacity to donate, both parties must consent, there must be a lawful reason for the gift, and the property must be owned by the donor.

Can a gift be sold?

The recipient has the right to dispose of the gifted property once they accept the gift and ownership of the gifted item is transferred to them, whether by mortgage, lease, sale, or granting usufruct rights, as long as there is no condition in the gift contract preventing such actions, such as a condition granting the donor the right of usufruct, which prevents anyone who leases or buys the gifted real estate from benefiting from it.

When is revocation of a gift considered permissible?

Revocation of a gift under Saudi law may be possible in some cases, depending on the type of gift and the surrounding circumstances. Cases where revocation may be permitted include failure to fulfill a condition of the gift, harm to the donor’s rights, fraud or deception, and gifts made by parents to children.