Contractor Crisis in Saudi Arabia 2025: Betrayal Shock and Dream Theft - Your Complete Guide to Protection and Rights Recovery

Introduction: The Dream House That Became a Nightmare

Abu Mohammed, a government employee in his fifties, saved his life's earnings over thirty years to achieve his lifetime dream: building a home for his family. He found a contractor who seemed respectable and spent hours discussing designs and specifications. He paid him the first installment of 200,000 riyals, and they agreed on an execution schedule. After two weeks of preliminary work, the contractor disappeared completely. Phone off, office abandoned, no trace of him.

Abu Mohammed spent the next two years in court corridors and police stations, trying to recover his money. He hasn't recovered anything yet, and developed high blood pressure from continuous stress. The abandoned construction site became a "scar" in the neighborhood, which he sees every day on his way to work, reminding him of betrayal and deception.

Abu Mohammed's story is not an exception, but one of thousands of painful stories repeated daily in the Saudi market. The relationship between citizens and contractors has become charged with doubt, tension, and suspicion. The home building journey, which should be an enjoyable trip to achieve a dream, often turns into a nightmare of betrayal and exploitation.

First: Running Away with Advance Payment - Violation of Personal Security

Stories of contractors who receive the first payment and then disappear completely or slow down work to blackmail the owner are repeated epidemically. This act does not represent mere financial loss, but an explicit violation of the citizen's personal security. The owner feels robbed and scammed in broad daylight, by someone they trusted and gave years of savings to.

The Painful Journey in Courts

A long journey of suffering begins in courts and police stations to recover rights. This journey may last years, during which the citizen's mental health is drained, living in a state of constant anger. Legal procedures are complex, and the fraudulent contractor often has hidden or transferred assets, making money recovery difficult even with a court ruling.

The Scar in the Neighborhood

The abandoned construction site becomes a "scar" in the neighborhood, a daily reminder of failure and deception. The abandoned concrete structure, rusted iron, and scattered debris are all witnesses to a shattered dream and an unfulfilled promise. Neighbors ask, relatives inquire, and the victim lives in constant embarrassment.

Second: Legal Loopholes and Fake Contracts

Some contractors exploit citizens' ignorance of the law to draft contracts full of loopholes. These contracts appear official and tight at first glance, but are actually designed to protect the contractor at the owner's expense.

Most Dangerous Contract Loopholes

First: Not specifying clear delay penalties with actual amounts. Some contracts settle for general phrases like "the contractor commits to deliver on time" without specifying a financial penalty for delay, leaving the owner unprotected in case of delays.

Second: Not specifying precise technical specifications for materials used. The contract may mention "ceramic tiles" without specifying type, grade, and thickness, allowing the contractor to use the cheapest and worst quality types.

Third: Using elastic and vague terms like "luxury finishing" or "high quality" without measurable and verifiable standards.

Fourth: Not linking payments to specific completion stages approved by an independent engineer, allowing the contractor to demand payments before actually completing work.

Feeling of Helplessness and Oppression

The citizen discovers too late when a dispute occurs that the contract they signed doesn't protect them, and that the contractor is legally "immunized." This feeling of helplessness against the contractor's "cunning" creates a state of personal oppression and increases the citizen's conviction that "the law doesn't protect fools" even if the foolishness resulted from good faith and trust in the other party.

Third: Poor Execution Quality - Living in a "Sick" House

Even when the contractor completes the work, the quality may be catastrophic. Poor construction doesn't appear immediately, but defects begin to appear gradually after living there, turning the family's life into daily suffering with a "sick" house.

Most Prominent Poor Execution Defects

First: Incorrect tile slopes that make water collect in bathroom and kitchen corners instead of draining to floor drains. This simple mistake leads to moisture accumulation, mold growth, and floor damage over the long term.

Second: Poor plastering that cracks and peels after a few months, requiring rework at additional cost.

Third: Water leaks from roofs and bathrooms, causing structural damage to the building and damage to furniture and finishes.

Fourth: Doors and windows that don't close properly due to uneven frames or poor installation.

Fifth: Plumbing and sewage problems appearing as bad odors, repeated blockages, or leaks inside walls.

Sixth: Poor electrical work that may pose a safety risk from electrical shocks or fires.

Living with Daily Reminders

When the owner has to live with these defects daily, every glance at the cracked wall or smell of mold becomes a reminder of the contractor's deception and suppressed anger. The house that was supposed to be a haven of comfort and relaxation turns into a source of stress and frustration. Instead of pride in achievement, the owner feels ashamed to invite guests and relatives.

Fourth: "Briefcase Traders" - Intruders on the Contracting Profession

One of the most dangerous phenomena in the Saudi contracting market is what's known as "briefcase traders" - people who practice contracting without license, experience, or competence. These intruders on the engineering profession exploit citizens' search for cheaper prices to offer tempting offers, then execute poor work or disappear with the money.

Characteristics of Briefcase Traders

First: They don't have a commercial register or official license to practice the profession, making legal pursuit difficult.

Second: They don't have a fixed headquarters or known address, communicating only via mobile phone.

Third: They offer prices much lower than market rates, attracting those looking to save.

Fourth: They rely on unqualified labor and poor materials to achieve a profit margin from the difference.

Fifth: They refuse to sign detailed contracts or provide incomplete contracts that don't protect the owner.

Penalty for Working Without License

Practicing contracting without a license and commercial register is a violation of Saudi laws and exposes the perpetrator to legal accountability. The penalty for building without a license in Saudi Arabia is strict, reaching 5 years imprisonment and a million riyal fine with suspension of building license for one year.

Fifth: Devastating Psychological Impact on Victims

Financial loss, despite its severity, is not the only impact of the contractor crisis. The psychological impact may be more severe and longer-lasting, extending to affect all family members.

Feeling of Betrayal and Treachery

The victim feels they've been personally betrayed. The contractor who sat with them for long hours discussing dreams and details, who seemed friendly and professional, suddenly turned into a scammer and thief. This feeling of betrayal strikes trust in people in general, making the victim more suspicious and cautious in future dealings, even with trustworthy people.

Self-Blame and Feeling of Stupidity

Victims blame themselves for the "naivety" that made them trust the contractor. Questions like "How didn't I notice?" and "Why didn't I verify more?" run through the victim's head constantly. This self-blame leads to low self-esteem and feelings of helplessness and failure.

Family Tension

The financial and psychological crisis reflects on family relationships. Disagreements between spouses increase, and children feel the tension at home. The dream of the new house that was supposed to bring the family together turns into a source of discord and conflict.

Continuous Financial Pressure

The employee who lost their advance payment finds themselves in financial trouble. They may have borrowed this amount or withdrawn it from retirement savings. Now they must start over, either saving for more years or borrowing again, with all the additional financial pressures that entails.

Sixth: Legal Framework and Statutory Penalties

The Saudi legislator has established a strict legal framework to combat fraud in the contracting sector and protect citizens' rights from violating contractors.

Anti-Financial Fraud and Breach of Trust Law

The Anti-Financial Fraud and Breach of Trust Law was issued by Royal Decree No. M/79 dated 10/9/1442H. Article One states that anyone who seizes another's money unlawfully through lying, deception, delusion, or any fraudulent means shall be punished with imprisonment not exceeding 7 years and a fine not exceeding 5 million Saudi riyals, or either penalty.

Penalty Enhancement

Both imprisonment and fine penalties are enhanced or doubled if fraud is committed through an organized gang or in case of recidivism. Tools and instruments used in fraud operations and any resulting funds are confiscated. The court may publish a summary of the ruling and penalty in local newspapers at the convict's expense.

Electronic Fraud

If fraud is committed through information technology means by using a false name or position to seize others' money, the penalty according to Article Five of the Anti-Cybercrime Law is imprisonment up to 3 years and a fine up to two million Saudi riyals, or either penalty.

Public Right in Fraud Cases

Public right in fraud cases means that the state, represented by the Public Prosecution, has the right to pursue and punish offenders even if victims don't file complaints. This means the fraudulent contractor won't escape punishment even if the victim waives their private right.

Seventh: How to Protect Yourself from Fraudulent Contractors

Before Contracting

First: Verify that the contractor is registered in the contractors' register and has a valid license. You can verify this through the "Muqawil" platform of the Saudi Contractors Authority.

Second: Ask to see their commercial register and verify its validity through the Ministry of Commerce website.

Third: Research the contractor's reputation and history. Ask about previous completed projects and contact their owners to inquire about their experience.

Fourth: Beware of very low prices. If the offer is much lower than market prices, this indicates potential fraud in materials or execution.

Fifth: Don't deal with a contractor who doesn't have a fixed headquarters or refuses to provide a clear address.

When Drafting the Contract

First: Use a lawyer specialized in contracting contracts to review the contract before signing. The lawyer's cost is minimal compared to potential losses.

Second: Specify clear delay penalties with specific amounts for each day or week of delay.

Third: Detail technical specifications precisely. Mention material type, grade, and brand if possible.

Fourth: Link payments to specific completion stages approved by an independent engineer.

Fifth: Include a penalty clause in the contract for breach of any obligations.

Sixth: Keep signed copies of all documents and correspondence.

During Execution

First: Don't pay any amount except for completed and approved work. The golden rule: "Work first, then payment."

Second: Appoint an independent engineer to supervise work and verify execution and material quality.

Third: Document everything with photos and dates. Photograph work stages and materials used.

Fourth: Follow up on work daily or at least weekly, and don't leave the site entirely to the contractor.

Fifth: If you notice any delay or breach, issue a written warning immediately and keep a copy.

Eighth: Where to Complain If You Become a Victim

Saudi Contractors Authority

You can file a complaint against the contractor through the "Muqawil" platform of the Saudi Contractors Authority. The Authority specializes in resolving disputes arising from breach of contract terms and obligations between client and contractor, except for purely financial disputes.

Police and Public Prosecution

In clear fraud cases, such as running away with advance payments, you must file a report at the police station. Police handle evidence collection and suspect interrogation, then the case is referred to the Public Prosecution and from there to the Criminal Court.

Ministry of Commerce

For complaints related to commercial fraud and misleading advertisements, you can use the "Commercial Report" app or call 1900.

Najiz Platform

You can file a lawsuit against the contractor electronically through the "Najiz" platform of the Ministry of Justice. You'll need to fill out the lawsuit form and attach supporting evidence and documents.

Commercial Court

Disputes with contracting companies are heard before the Commercial Court. It's recommended to hire a specialized lawyer to follow up on the case and ensure the lawsuit is filed correctly.

Ninth: Steps to File a Lawsuit Against a Contractor

According to Article 466 of the new Civil Transactions Law in Saudi Arabia, the following steps should be followed:

First: Issue a written notice to the contractor to fulfill their obligations in accordance with contractual terms within a period specified in the notice.

Second: If the contractor doesn't respond, the owner has the right to assign the work to another contractor at the previous contractor's expense, or request contract termination.

Third: The owner has the right to terminate the contracting contract directly if repairing the defect becomes impossible or the contractor delays starting execution.

Fourth: Submit the lawsuit to the competent court including both parties' details, dispute details, and claims.

Fifth: Attach supporting evidence: contract copy, payment receipts, correspondence, site photos, engineer reports if available.

Tenth: Frequently Asked Questions

How do I complain about a contractor without a contract?

You can file a complaint even without a written contract, but you'll need to gather alternative evidence such as witnesses, text and electronic correspondence, money transfer photos, and any documents proving the contractual relationship. The case becomes harder, but not impossible.

Can money be recovered from a runaway contractor?

Yes, but it requires patience and legal procedures. After a court ruling in your favor, you can request enforcement through the Execution Court, which has the authority to seize the convict's money and property, ban them from traveling, and even imprison them if they don't comply.

What is the limitation period for contracting lawsuits?

The limitation period varies depending on the nature of the lawsuit. It's recommended to file the lawsuit as soon as possible after discovering the violation to ensure the right doesn't expire by limitation.

Can I suspend the fraudulent contractor's services?

Yes, after a final court ruling and non-compliance, you can request suspension of the convict's services through the Execution Court, preventing them from conducting any government transactions.

What is the cost of hiring a lawyer for contracting cases?

The cost varies depending on case complexity and amounts claimed. It's recommended to inquire from several law offices and compare offers, considering the lawyer's experience and specialization in contracting cases.

How long do contracting cases take in courts?

The duration ranges from several months to years, depending on case complexity, party cooperation, and court schedule. Clear and well-documented cases are resolved faster.

Conclusion

The contractor crisis in the Saudi market is a serious phenomenon affecting thousands of families annually. Running away with advance payments, contracts full of loopholes, and poor execution quality are all forms of exploitation that turn the home dream into a painful nightmare.

But awareness is the first line of defense. Verifying the contractor's license, drafting a tight contract, linking payments to completion, and continuous work supervision are all steps that protect you from falling victim to fraudulent contractors.

And if you become a victim, don't give up. The Saudi system has set strict penalties for fraudsters and provided multiple channels for complaints and rights recovery. Courts, the Saudi Contractors Authority, and the Ministry of Commerce are all ready to hear you and help you.

At Raghdan, we believe that building a home should be an enjoyable journey, not a painful nightmare. That's why we strive to provide information that protects and empowers you to make informed decisions. Share your experience or questions with us, and we're here to help you in your real estate journey safely and confidently.