Why Were the New Tenancy Regulations Introduced?
The new tenancy framework is designed to establish a stable and transparent rental market based on four fundamental principles:
Table Of Contents
1. Principle of Stability
The regulations prioritize tenant stability by introducing automatic lease renewal as the general rule across all Saudi cities.
Non-renewal by the landlord is limited to specific exceptions in Riyadh, ensuring greater housing and contractual security for tenants and their families throughout the Kingdom.
2. Principle of Balance and Fairness
The new regulations aim to create an equitable relationship that protects all parties.
Tenants benefit from rent stability and continuity, while landlords retain the right to their property and may contest rent values under specific conditions all within a clear legal framework ensuring fairness for both sides.
3. Principle of Transparency and Clarity
All lease agreements must be documented on the “Ejar” platform, granting contracts full legal validity and eliminating informal or undocumented dealings.
This step enhances market credibility and promotes transparency in the real estate sector.
4. Principle of Governance and Oversight
To ensure proper implementation, the regulations establish penalties for violations, strengthen community oversight, and clarify the roles of relevant authorities fostering a well-governed and enforceable system.
Key Provisions of the New Regulations
1. Mandatory Registration on “Ejar”
All residential and commercial leases must be registered on “Ejar,” the official reference platform protecting the rights of both parties.
Unregistered contracts are not legally valid and produce no administrative or judicial effects.
2. Automatic Lease Renewal
Leases are automatically renewed unless either party notifies the other at least 60 days before contract expiration of their intent not to renew.
3. Adjusting the Rental Value
A new electronic feature “Request to Modify Rental Value” allows landlords to submit formal electronic requests to tenants to increase or decrease rent for the next term.
The process ensures a structured and documented negotiation.
Process Overview:
- The landlord submits a modification request via Ejar at least 90 days before the contract ends.
- The tenant is notified and may accept or reject the request.
- If accepted, the lease renews automatically at the new rate.
- If rejected, automatic renewal is canceled, and the lease ends upon expiration.
You also care : Electronic Signatures Under Saudi Law
Right to Contest Rental Value
Landlords in Riyadh may challenge the designated rent value under specific conditions, such as:
- Major structural or construction renovations affecting property value.
- The last lease being concluded before 2024.
Frequently Asked Questions
1. Do these regulations apply to all cities in the Kingdom?
Yes. The regulations apply nationwide, with certain exceptions for Riyadh.
2. Do they include both residential and commercial leases?
Yes, the rules cover both types to ensure consistency across the rental sector.
3. Do they apply to all contract durations?
They apply to leases longer than three months, while rent caps apply to all leases regardless of duration.
4. How will automatic renewal work for new contracts?
Automatic renewal will be activated by default.
Tenants may cancel renewal 60 days before expiry, while landlords in Riyadh may only do so under specific conditions.
5. Can tenants cancel automatic renewal?
Yes, tenants may cancel renewal without conditions, provided notice is given 60 days before the end of the term.
6. When can landlords cancel automatic renewal?
Landlords may request non-renewal in Riyadh only under defined circumstances:
Non-payment of rent by the tenant.
Structural problems in the property.
The landlord’s personal or first-degree relative’s need for the property.
7. Who may request a rent adjustment?
Only landlords may submit rent adjustment requests via Ejar at least 90 days before contract expiration.
8. What happens if the tenant ignores the request?
Failure to respond within the notice period (60 days before expiry) is considered a rejection, leading to cancellation of automatic renewal.
9. When does the new rent apply if both agree to modify it?
The new rate applies only upon renewal, not during the current active lease term.
10. What if the landlord fails to pay renewal fees?
The lease remains valid and renews automatically; unpaid fees are recorded as debt against the landlord to protect the tenant.
11. Can old contracts be reviewed if rent is below market value?
Yes. If the last contract was signed before January 1, 2024, landlords may appeal to the General Real Estate Authority for rent reassessment.
12. What if the landlord refuses to register the lease?
The tenant may request registration through Ejar or report the case to the General Real Estate Authority.
13. Are all leases renewed automatically?
Yes, all residential and commercial leases exceeding three months are automatically renewed unless notice of non-renewal is given 60 days before expiry.
14. Can tenants opt out of renewal?
Yes. Tenants may choose not to renew without conditions by submitting notice 60 days prior to expiration.
15. Who bears the platform fees if paid by a broker?
Platform fees are the landlord’s responsibility, even if initially paid through a brokerage.
16. Can the landlord charge extra fees (e.g., parking, cleaning, owners’ association)?
Additional agreed-upon service fees must be explicitly included in the contract.
Owners’ association fees, however, are determined separately via the “Mullak” platform and not through the lease.
At Al Salamah Law Firm and Legal Consultancy, we provide comprehensive legal guidance and consultation regarding the new tenancy framework, vacant land and real estate fees, and their executive regulations across all Saudi cities.
If you wish to file an appeal or seek legal clarification, our firm stands ready to assist you in ensuring your rights are fully protected under the new legal system.
READ MORE :Tabby & Consumer Finance in Saudi Arabia: Between Regulatory Opportunities and Rising Oversight
