Real Estate Disputes Resolution Mechanisms Guide 2026: Arbitration, Courts, Settlement - Which is Best for You?

Introduction: Why You Need to Understand Real Estate Dispute Resolution Mechanisms

In the dynamic world of real estate, disputes are possible even in the most carefully planned transactions. Whether you're a real estate investor, developer, owner, tenant, or broker, your knowledge of real estate dispute resolution mechanisms in the Kingdom is not just additional information, but a legal and practical necessity that may protect you from significant financial losses and save you years of litigation.

In this comprehensive guide, we will take you on a detailed journey through all available methods for resolving real estate disputes in Saudi Arabia. We won't just list the options, but will answer fundamental questions: When do you choose arbitration over court? How do you begin settlement procedures? What entities are responsible? And which is faster, cheaper, and more effective for your specific case?

Whether you're at the beginning of a real estate dispute or want to avoid it altogether, this article is your complete guide to understanding the legal system for real estate disputes in the Kingdom of Saudi Arabia.

First: What Are Real Estate Disputes?

A real estate dispute is any legal disagreement arising between two or more parties regarding a specific property, whether land, building, apartment, or any real estate unit. These disputes vary in nature and causes, but all require a clear mechanism for resolution and protection of parties' rights.

Common Types of Real Estate Disputes

1. Ownership Disputes

Include disagreements about who actually owns the property, including: Disputes over deed validity, Deed overlaps and conflicts, Disputes among heirs over property division, Claims of ownership without legal documentation, Disputed land claims.

2. Possession and Encroachment Disputes

Related to seizure or encroachment on property, such as: Encroachment on property boundaries and building on neighbor's land, Usurpation and occupation of others' property without legal right, Preventing owner from entering or using their property, Neighbor nuisance and harm, Disputes over easement rights (right of way, right of view).

3. Real Estate Contract Disputes

Arise from disagreements on contract execution, including: Sale contracts: Non-delivery of property, non-payment of price, hidden defects in property, fraud and deception in sale. Lease contracts: Non-payment of rent, refusal to vacate after contract end, lack of property maintenance, violation of usage conditions. Construction contracts: Delivery delays, construction defects, non-compliance with specifications, disputes over additional work.

4. Real Estate Brokerage Disputes

Related to disputes between real estate brokers and parties, such as: Disagreement over commission entitlement and percentage, Failure to disclose important information, Brokering in transactions with conflicts of interest, Violation of brokerage contract terms.

5. Off-Plan Sale and Lease Disputes

Include disputes over projects under construction: Unit delivery delays, Non-compliance with plan specifications, Developer failure to complete project, Disputes over refund of paid amounts.

6. Owners Association Disputes

Occur in buildings and residential complexes, such as: Disagreements over association decisions, Maintenance and shared expense disputes, Disputes over shared facility usage, Disputes over association management and representative elections.

Second: Overview of Real Estate Dispute Resolution Mechanisms

The Saudi system provides several paths for resolving real estate disputes, each with its characteristics, advantages, and procedures. These mechanisms can be divided into three main categories:

Category One: Amicable Solutions (Non-Judicial)

Methods achieved by mutual consent without resorting to judiciary, including: Direct negotiation between parties, Mediation through neutral third party, Settlement through Saudi Real Estate Arbitration Center or Taradhi platform.

Category Two: Arbitration (Quasi-Judicial)

Real estate arbitration through Saudi Real Estate Arbitration Center, Real estate conciliation through Saudi Real Estate Arbitration Center.

Category Three: Judiciary (Judicial Solutions)

General courts (primary and appellate), Personal status courts (for inheritance-related disputes), Commercial courts (for commercial real estate disputes), Board of Grievances (for disputes with government entities).

Each path has its pros and cons in terms of speed, cost, confidentiality, and bindingness. Let's delve into each one.

Third: First Method - Amicable Solutions (Settlement and Mediation)

Amicable solutions are always the first and best option before escalating to courts or arbitration. They are the fastest, cheapest, and most relationship-preserving between parties.

What is Real Estate Settlement?

Settlement is an agreement reached by disputing parties through mutual consent to end the dispute, where each party waives part of their claims in exchange for a quick and final solution to the disagreement. Settlement can occur directly between parties, or with the help of a neutral third party (mediator or conciliator).

When to Resort to Settlement?

Settlement is the optimal choice in the following cases: Simple disputes with limited financial value, When the relationship between parties is ongoing and important (partners, relatives, neighbors), When parties want a quick solution without lengthy procedures, When evidence is not strong for one party and you want to avoid the risk of losing the case, When you want to maintain dispute confidentiality away from media and judiciary.

How is Real Estate Settlement Done?

First Method: Direct Settlement

Parties agree on an amicable session, Each party presents their viewpoint and claims, They negotiate and reach a middle ground, They document the agreement in writing and sign it, The agreement can be authenticated at Notary to give it enforcement power.

Second Method: Settlement Through Saudi Real Estate Arbitration Center

The Center provides official settlement service for real estate disputes:

Step 1: Register on the Center's platform (reac.sa), Step 2: Submit electronic settlement request, Step 3: Specify parties' data and dispute, Step 4: Pay administrative fees (nominal), Step 5: Center appoints specialized neutral conciliator, Step 6: Hold settlement session (in-person or electronic), Step 7: If parties reach agreement, it's documented in binding official settlement record, Step 8: If settlement fails, can move to arbitration or court.

Third Method: Settlement Through Taradhi Platform

Taradhi platform affiliated with Ministry of Justice provides settlement services for various disputes including real estate: Access Taradhi platform via Najez, Submit settlement request and specify dispute type, Notify other party of settlement request, Hold settlement sessions (usually 1-3 sessions), Reach agreement and document it, Or issue report of settlement failure.

Settlement Advantages

Speed: May resolve dispute in days or weeks, Cost: Much cheaper than arbitration or courts, Confidentiality: Dispute not publicly announced, Relationship preservation: Doesn't create enmity like courts, Flexibility: Creative solutions not available in courts, Bindingness: When settlement agreement is authenticated, becomes binding and enforceable.

Settlement Disadvantages

Not binding: If one party refuses, cannot be forced, May require concessions: May not get all your rights, Needs good faith: If other party acts in bad faith, settlement won't succeed.

Fourth: Second Method - Real Estate Arbitration

Arbitration is an alternative to judiciary, where parties agree to refer their dispute to an arbitrator or specialized arbitration panel, which issues a binding ruling as an alternative to court judgment. Real estate arbitration in Saudi Arabia is primarily conducted through the Saudi Real Estate Arbitration Center.

What is the Saudi Real Estate Arbitration Center?

It is a specialized center established in 1440 AH (2019 CE) by decision of the General Authority for Real Estate, and received official license from the Permanent Committee of Arbitration Centers. The Center enjoys independent legal personality administratively and financially, and aims to provide quick and effective solutions for real estate disputes as an alternative to traditional judiciary.

What Disputes Does the Center Handle?

The Center resolves the following real estate disputes: Real estate brokerage disputes (commissions, broker violations), Off-plan sale and lease disputes, Owners association disputes (union of owners), Ejar program disputes (unified contracts), Real estate development disputes, Real estate valuation disputes, Real estate contracting disputes.

What Disputes Does the Center Not Handle?

Outside the Center's jurisdiction: Criminal cases even if arising from real estate dispute, Property sale and purchase disputes (go to general courts), Old real estate contribution disputes, Rent payment and eviction disputes for non-unified contracts (go to courts).

When to Resort to Real Estate Arbitration?

Arbitration is the optimal choice in the following cases: Settlement and mediation failed, You want quick solution (within 30 days), Dispute falls under Center's jurisdiction, You want complete confidentiality, You want arbitrators specialized in real estate, You want to avoid lengthy court procedures, There is arbitration clause in contract between you and other party.

How to Start Arbitration Procedures?

Here are the detailed steps:

Step 1: Register on Platform
Access Center's website (reac.sa), Register new account with ID number, Activate account via confirmation message.

Step 2: File Claim
Choose "File New Claim", Specify claim type (arbitration or settlement), Fill required data: Claimant data (name, ID, mobile, email), Respondent data, Claim title and detailed description, Specify disputed amount if any, Claim requests clearly, Attach supporting documents (contracts, correspondence, evidence).

Step 3: Pay Administrative Costs
After filing claim, you'll be asked to pay nominal administrative fees, Pay via Sadad system or Mada.

Step 4: Review Stage
Center reviews claim to verify: Center's jurisdiction over dispute, Data and documents completeness, Procedural soundness.

Step 5: Choose Number of Arbitrators
You choose whether you want: Sole arbitrator (for simple disputes), Arbitration panel of 3 arbitrators (for complex disputes).

Step 6: Form Arbitration Panel
If you chose sole arbitrator: Each party chooses arbitrator from Center's list, If they agree it's approved, otherwise Center chooses arbitrator. If you chose panel of 3: Each party chooses arbitrator, Two arbitrators choose third arbitrator (chairman).

Step 7: Pay Arbitration Costs
After panel formation, arbitrators' fees and final fees are paid, Costs divided between parties according to agreement or panel's ruling.

Step 8: Begin Arbitration Procedures
Center sends case file to arbitration panel, Panel sets sessions schedule, Parties notified of session dates.

Step 9: Hold Arbitration Sessions
Sessions held in-person or electronically, Each party presents briefs, defenses, and evidence, Witnesses heard if any, Experts consulted if necessary, Panel discusses parties and clarifies ambiguous points.

Step 10: Issue Award
After sessions end, arbitration panel issues final award, Award is binding and final, Award deposited with competent court for execution order, After execution order issued, award executed forcibly if convicted party doesn't comply.

Arbitration Timeline

Saudi Real Estate Arbitration Center commits to speed: Arbitration period: Not exceeding 30 days from panel formation, Can be extended with parties' consent or necessity, Total time from filing claim to award: Usually 2-4 months.

Real Estate Arbitration Advantages

Speed: 30 days versus years in courts, Specialization: Expert arbitrators in real estate, Confidentiality: Sessions and awards completely confidential, Flexibility: Simpler procedures than courts, Bindingness: Award binding and enforceable, Independence: Neutral and independent body, Electronic: All procedures via platform.

Real Estate Arbitration Disadvantages

Cost: Higher than settlement (arbitrators' fees + costs), Limited appeal: Cannot appeal arbitration award except in rare specified cases, Requires agreement: Must have arbitration agreement or parties' consent, Limited jurisdiction: Only for disputes specified in Center's regulations.

Fifth: Third Method - Courts (Judiciary)

Courts are the traditional and most common path for resolving real estate disputes, especially those not falling under Saudi Center's jurisdiction.

Types of Courts Competent in Real Estate Disputes

1. General Courts (Primary)

Competent to consider all real estate claims not falling under other courts' jurisdiction, including: Ownership and possession claims, Property encroachment claims, Sale and purchase contract disputes, Lease disputes (non-unified), Non-interference claims, Ownership proof claims, Division and separation claims.

2. Personal Status Courts

Competent to consider real estate disputes related to inheritances: Estate property division among heirs, Proof of property wills, Heir enumeration and share determination in property, Inheritance property claims, Disputes over endowed properties.

3. Commercial Courts

Competent to consider real estate disputes of commercial nature: Real estate disputes between companies, Properties that are part of commercial transaction, Partner disputes in real estate companies, Commercial real estate development contracts.

4. Board of Grievances

Competent in real estate disputes with government entities: Expropriation for public benefit, Appeal of expropriation decisions, Compensation for expropriation, Disputes with municipalities, Appeal of administrative decisions related to property.

When to Resort to Courts?

Resorting to courts becomes necessary in the following cases: Settlement, mediation, and arbitration failed, Dispute outside Saudi Center's jurisdiction, Related to original ownership or inheritances, You want official judicial ruling, You need appeal possibility, You need precautionary measures, No arbitration agreement and other party refused arbitration, Your budget is limited and you cannot pay arbitration costs.

How to File Lawsuit in Court?

Step 1: Preparation and Evidence Collection
Before filing lawsuit, prepare: Ownership deeds and contracts, Supporting documents (letters, emails, evidence), Witnesses if any, Technical reports (experts, surveyors), Photos and videos, Previous correspondence with other party.

Step 2: Consult Specialized Lawyer
Strongly advised to retain specialized real estate lawyer to: Draft lawsuit claim legally correctly, Determine competent court, Choose appropriate requests and defenses, Represent you in sessions, Follow procedures.

Step 3: File Lawsuit via Najez Platform
Access Najez platform, Choose "Lawsuits", Choose "New Lawsuit", Specify lawsuit type (real estate), Specify competent court, Fill lawsuit claim, Attach documents, Pay lawsuit fees, Get lawsuit number.

Step 4: Notify Defendant
Court notifies defendant of lawsuit claim, Defendant given deadline to respond to lawsuit.

Step 5: Attend Sessions
Court sets first session, You or your representative (lawyer) attend, Both dispute parties heard, Evidence and proofs presented, Several sessions may be held.

Step 6: Issue Primary Judgment
After pleadings end, court issues its judgment, Judgment is primary (appealable).

Step 7: Appeal (Optional)
Party unsatisfied with judgment has right to appeal within 30 days, Appeal filed to Court of Appeal, Court of Appeal reviews judgment and affirms, cancels, or modifies it.

Step 8: Execution
After judgment acquires final degree (not appealed or appellate judgment issued), Judgment executed via Execution Court if convicted party doesn't comply voluntarily.

Timeline in Courts

Duration varies by case complexity: Simple cases: 6 months to one year, Medium cases: One to two years, Complex cases: Two to several years, Appeal: Adds 6 months to one additional year.

Advantages of Resorting to Courts

Comprehensiveness: Competent in all dispute types, Legal force: Final and binding judgments, Appeal: Judgment can be appealed, Precautionary procedures: Seizure, travel ban, judicial custody, Forced execution: Via execution courts, Low fees: Compared to arbitration.

Disadvantages of Resorting to Courts

Slowness: May take years, Publicity: Sessions and judgments public, Complexity: Lengthy and complex procedures, Psychological pressure: Repeated sessions and continuous follow-up, May harm relationships: Especially between relatives and partners.

Sixth: Comprehensive Comparison Table Between Mechanisms

To help you choose the most appropriate method for your case, here's a comprehensive comparison table:

Element	Settlement & Mediation	Real Estate Arbitration	Courts
Timeline	Days to weeks	30 days (2-4 months total)	6 months to several years
Cost	Very low	Medium to high	Low (judicial fees)
Confidentiality	Complete confidentiality	Complete confidentiality	Public
Bindingness	Not binding except after authentication	Binding and final	Binding and final
Appeal Possibility	None	Very limited	Available
Specialization	Medium	High (specialized arbitrators)	Medium
Flexibility	Very high	High	Low
Relationship Preservation	Excellent	Good	Poor
Jurisdiction Comprehensiveness	All disputes	Specified by Center's regulations	All disputes
Procedure Ease	Very simple	Simple	Complex
Enforcement Power	After authentication	After execution order	After acquiring final degree

Seventh: How to Choose the Appropriate Method?

Choosing the appropriate mechanism depends on several factors. Here's a decision-making guide:

Start with Settlement if:

Dispute is simple with limited value, Relationship between you and other party is ongoing and important, You want quick solution within days, You prefer complete confidentiality, Ready to waive some rights for peace of mind.

Choose Arbitration if:

Dispute falls under Saudi Center's jurisdiction, Settlement failed, You want quick solution within month or two, You want arbitrators specialized in real estate, You want complete confidentiality, Arbitration clause exists in contract, Ready to pay arbitration costs.

Resort to Courts if:

Dispute outside Center's jurisdiction, Related to original ownership or inheritances, You want official judicial ruling, You need appeal possibility, You need precautionary measures, No arbitration agreement and other party refused arbitration, Your budget is limited and cannot pay arbitration costs.

Decision-Making Chart

1. Is dispute simple and can be resolved amicably? Yes → Try settlement first, No → Move to next question.

2. Does dispute fall under Saudi Real Estate Arbitration Center's jurisdiction? Yes → Choose arbitration, No → Move to next question.

3. Is there arbitration agreement in contract? Yes → Must resort to arbitration, No → Move to next question.

4. Do you want speed and confidentiality and ready for cost? Yes → Try agreeing on arbitration, No → Resort to courts.

Eighth: Entities Responsible for Real Estate Dispute Resolution

To fully understand the system, here are the main responsible entities:

1. General Authority for Real Estate (rega.gov.sa)

Government entity responsible for regulating real estate sector, Established Saudi Real Estate Arbitration Center, Supervises licensed real estate activities, Issues real estate regulations and bylaws.

2. Saudi Real Estate Arbitration Center (reac.sa)

Specialized center affiliated with General Authority for Real Estate, Provides services: Real estate arbitration, Settlement and conciliation, Real estate expertise, Operates completely electronically, Licensed by Permanent Committee of Arbitration Centers.

3. Ministry of Justice

Responsible for general courts and personal status courts, Supervises Najez platform for judicial services, Supervises Taradhi platform for settlement, Issues arbitration award execution orders.

4. Board of Grievances

Competent in administrative disputes with government entities, Expropriation and compensation, Appeals in administrative decisions related to property.

5. Notaries

Authenticate settlement agreements, Issue and authenticate property deeds, Authenticate real estate contracts.

Ninth: When is Decision Binding?

Understanding when decision becomes binding and enforceable is very important:

In Settlement

Decision binding when: Settlement agreement signed by both parties, Agreement authenticated at Notary or Saudi Real Estate Arbitration Center, After authentication, becomes enforcement deed, If one party doesn't comply, can be forcibly executed via Execution Court.

In Arbitration

Decision binding when: Arbitration panel issues final award, Award immediately binding on both parties, But for forced execution, must: Deposit award with competent court, Obtain execution order from court, After execution order, award executed via Execution Court.

In Courts

Decision binding when: Judgment acquires final degree, This occurs: If not appealed within 30 days, Or final appellate judgment issued, After acquiring final degree, executed via Execution Court.

Tenth: Golden Tips to Avoid Real Estate Disputes

Prevention is better than cure. Here are tips to avoid entering disputes from the start:

1. Document Everything in Writing

Never rely on verbal agreements, Write everything: Contracts, agreements, amendments, additions, Keep copies of all correspondence and emails, Photograph every important document.

2. Consult Lawyer Before Signing

Don't sign any real estate contract before reviewing it with specialized lawyer, Lawyer discovers loopholes and unfair terms, Consultation cost much less than dispute cost.

3. Verify Deeds and Documents

Before buying any property: Verify ownership deed at Notary, Ensure no mortgages or debts on property, Verify boundary and area compliance, Consult surveying expert if necessary.

4. Put Clear Clauses in Contracts

Good contract should include: Clear identification of parties, Accurate property description, Price or rent specification, Payment and delivery terms, Each party's obligation clauses, Dispute resolution mechanism (settlement, arbitration, courts), Penalty clauses in case of breach.

5. Include Arbitration Clause in Contracts

It's wise to add arbitration clause in your real estate contracts, such as: "In case of any dispute between parties, it shall be referred to Saudi Real Estate Arbitration Center for arbitration resolution according to its regulations and system, and arbitration decision shall be final and binding on both parties."

6. Maintain Good Communication

Most disputes start from misunderstanding or communication breakdown, Maintain open communication channels with other party, Explain your position clearly, Listen to other party's position, Try amicable solution before escalation.

7. Comply with Regulations and Bylaws

Ensure your real estate transactions comply with: Building and planning regulations, Real estate brokerage system, Unified lease system, General Authority for Real Estate regulations.

Eleven: Frequently Asked Questions

1. Can I file lawsuit directly in court without trying settlement?

Yes, you can if there's no obligation for settlement first. But settlement is advised as it's faster and cheaper.

2. How much does arbitration cost at Saudi Real Estate Arbitration Center?

Costs vary by dispute value and number of arbitrators, including: Administrative fees (limited), Arbitrators' fees (by value and complexity), Generally, cost higher than courts but less than years of litigation.

3. Can arbitration award be appealed?

No, except in very specific cases such as: Arbitration agreement invalidity, Public order violation, Preventing one party from defense, Arbitration panel formed contrary to regulations.

4. What if other party refuses to attend settlement?

If they refuse, you can move directly to arbitration or court according to dispute jurisdiction.

5. Can ownership disputes be arbitrated?

No, original ownership and possession disputes outside Center's jurisdiction, go to general courts.

6. How long for judgment in primary court?

Varies by case complexity, but generally from 6 months to two years for primary judgment.

7. Do I need lawyer in arbitration?

Not mandatory, but strongly advised especially in complex or high-value disputes.

8. What if dispute is between me and government entity?

Goes to Board of Grievances, not Center or general courts.

9. Can settlement occur after arbitration starts?

Yes, parties can settle anytime before award issuance, settlement documented and arbitration terminated.

10. How do I know if my dispute falls under Center's jurisdiction?

Check Center's website (reac.sa) or contact them, or consult real estate lawyer.

Conclusion

Understanding real estate dispute resolution mechanisms in the Kingdom is not luxury, but necessity for everyone working or investing in real estate sector. You now have three clear paths: Settlement for speed and relationship preservation, Arbitration for specialization and speed with bindingness, Courts for comprehensiveness and judicial power.

Choose the most appropriate path for your case based on dispute nature, your relationship with other party, available time, and budget. Always remember: Prevention is better than cure, so document everything, consult experts, and comply with regulations.

We pray Allah protects you from disputes, and that your real estate transactions are blessed and problem-free. Share this guide with everyone concerned in real estate sector.