Document background
The Owner Financing Promissory Note is utilized in Saudi Arabia when a property seller agrees to finance the purchase directly for the buyer, rather than the buyer obtaining traditional bank financing. This document is essential in markets where conventional mortgage financing may be limited or when parties prefer to structure their transaction in accordance with Islamic finance principles. The note details the payment obligations, including the purchase price and Sharia-compliant profit structure, security arrangements, and enforcement mechanisms. It must comply with Saudi Arabian law, particularly Islamic Banking Control Law and SAMA regulations, while avoiding conventional interest (riba). The document is commonly used in both residential and commercial property transactions and includes specific provisions for default, payment schedules, and property security interests.
