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Real Estate Regulations in Bahrain 2022

Published on : 05 Jul 2022

Bahrain Property Law 2022

A new plan to promote the real estate sector is set by the Bahrain Real Estate Regulatory Authority (RERA) in accordance with the Kingdom's Economic Vision 2020 called National Plan for Real Estate. This aims to enhance Bahrain's economy by attracting the investors into the Kingdom and to enhance the growth and development of the Real Estate industry. It intends to make Bahrain a regional leader in the sector.

The RERA initiated to set a plan to implement and execute a National Real Estate Plan. The main aim in setting the national real estate plan is to set out Law 27 of 2017 and to announce the Real Estate Regulation Law by the established the authority. They have set a five pillar plan with it’s the main subjects sustainability, innovation, transparency and union.

The five pillar plan has taken consideration which is generally executed in worldwide practises like requirements and safeguarding the privileges of all stakeholders and advancing the current administrative structure.

Law 27 of 2017

The new Law was issued in official Gazette 2017 and it came into existence on 2018. The new Law is Law No. 27 of 2017 which is built for the Promulgation of the Real Estate Sector Regulation Law. The New Law will cover a wide range of problems existing in real estate sector in Bahrain and it consists of 109 Articles and related legislations.

The Chapter One of the Law No. 27 of 2017 deals with the establishment of a Real Estate Regulatory Agency (RERA). It regulates the Real Estate sector in Bahrain.  The Board has numerous of tasks including the execution of a national plan and issuing operation of new law in regulation of the Real Estate sector. The other part of the New Law was the guideline of off-plan developments in Bahrain. It replaced the Law No. 28 of 2014 which previously governed all off-plan developments. The Developers who plan to sell off the properties should obtain a Developer’s Licence before carrying out any development activities. After acquiring a developer license, it will be recorded in Developers register which will be kept by RERA.  A resolution from the Cabinet of Ministers will determine the requirements for obtaining, renewing and amending a Developer’s Licence.

The fundamental change from the past law is that a Home Owners Association (HOA) is established up on the sale of one unit instead of 4. This will equip to form part of title deed of any common property which is jointly owned to get enrolled at the Survey and Land Registration Bureau. The New Law will enable to keep all genuine rights to incorporate long term leases mortgages and privileges of Musataha to get enlisted. The Non-compliance with the New law may attract extreme punishments which range from 2 years imprisonment and a fine of up to BHD50,000.

Pillars of new law

The first pillar is centred on the development of real estate focused technology which will help to work on the improving the proficiency of existing practices in real estate with the help of digital technologies. Improving the real estate sector will draw in global experts who are specialized in the field of real estate technology into the Kingdom. RERA likewise intend to consolidate general real estate knowledge, as well as real estate technology explicitly into Bahrain's education by making venture with the training schools to create more interest in youthful Bahrainis in this sector. Also REREA looks forward to create opportunities for Bahraini residents in the move towards modern technologies anticipating that the quick move into technology development and innovation will create high-income job openings for citizens who desire to participate in the development of this growing sector.

The second Pillar aims to harmonise the legislative procedures required to acquire endorsements for real estate development. By appointing a single central authority to act as the focal point between financial and government authorities to increase the efficiency of the overall process by making it more smooth. This news is a relief for real estate developers and investors who had to frequently manage different government agencies. RERA will provide incentive to encourage the investors and developers to invest in the Kingdom.

The third pillar sets the establishment of a real estate database at RERA. This is to furnish the investors with accurate, up to date and dependable information. It also intends to provide guarantee to the investors that all data can be acquired easily from a single and authorised source. The Government officials plan to launch the real estate database by 2022.

The pillar four encourages the use of sustainable practice explicitly within real estate sector. This will help to create an increasing awareness towards environment friendly real estate projects. It will encourage reducing the utilization and development of methods using the non-renewable resources.  This is proposed to be executed through of 'Transit-oriented development' projects. The aim of these kinds of projects is that to reduce air pollution by encouraging the foundation of public roads free from vehicles and diminishing the dependency on vehicles. This is an interesting focus on future real estate projects in Bahrain which can prompt some creative new activities.

The final pillar is in accordance with the theme of transparency and similar to the third Pillar. This aims is to secure the interests of investors within the real estate sector. Previously the current rights and restrictions over land are not always fully disclosed or transparent to buyers. The investors have to be provided with a guarantee that is they can acquire total and accurate information related to their privileges, commitments and limitations and should disclose these in all new contracts. This will be a critical new development in the sale and purchase of land in Bahrain. This will be welcomed by investors who had faced a bad experience over the transparency of land transactions.

This pillar also looks forward in the development of professionalism within the sector. That is providing the rental agents a RERA license for regulating and protecting rights of owner within the profession and thereby reducing rental disputes.

A specific bank account has to be opened for all financial receipts and valid development cost payments by developer who is on to off-plan sales development. This account is known as an escrow account. The account has to be managed by an independent escrow account agent approved by the RERA. The entire off plan sale contracts and buyer deposits must be paid directly into the escrow account. Brokers won’t get any benefit from the deal off-plan contracts. Development payments are paid from the escrow account and the same transaction needs to be certified by a consulting engineer registered with the RERA. A minimum amount needs to be maintained in an escrow account. If the project is discontinued then the remaining funds should be divided equally among the buyers.

The ownership of land mostly rest on few royal family members but in certain area both Bahraini nationals and foreign firms can possess ownership on lands. For business purpose foreign investors may own property in various fields.  Foreign investors may own commercial property in certain parts Bahrain. Most of the new development projects in Bahrain the foreigners and international investors are permitted to own houses, buildings, outlets, or freehold apartments in Bahrain. The Legally purchased property cannot be given back to the owners even if such property is not occupied.


The New Law with the resulting goals will provide comprehensive legislation managing the Real Estate sector in Bahrain. The establishment of RERA as the regulator makes the important government power to execute the new law and regulations. With such regulation having the capacity to get a level playing field for stakeholders and give greater confidence in the market to investors.

The National Real Estate Plan contains some truly outstanding and practical aims for the real estate sector. The new law look forward to see the implementation of the aims of the plan which will make life easier for developers and investors. Overall the new law should lead to new sustainable projects in the Kingdom of Bahrain.




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