New regulatory provisions for the rental relationship

New regulatory provisions for the rental relationship

The Kingdom of Saudi Arabia has been keen to develop the real estate sector and open up opportunities for investors to create new opportunities that keep pace with the growing demand for real estate.

Many real estate systems have been issued and updated that address real estate market problems and achieve balance and sustainability in this sector.

Among the most important modern real estate regulations that have been issued are the new regulatory provisions to control the relationship between the landlord and the tenant, which came to control the increase in the rental value, renewal of the contract and cases of eviction of the property without notifying the tenant of this, and the penalties resulting from violating the provisions of the system.

What are the most important new regulatory provisions to regulate the rental relationship?

The new regulatory provisions stipulate a number of provisions that contribute to the stability of the real estate market in the city of Riyadh and the rest of the cities of the Kingdom, the most important of which are:

• Stopping the annual increase in residential and commercial rental contracts in the city of Riyadh.
• Automatic renewal of leases.
• The lease contract must be documented and registered electronically on a rental platform.

How much is the landlord entitled to increase the rent?

The annual increase rate in the new rental law in residential and commercial real estate rental contracts in the city of Riyadh has been stopped for a period of five years, starting from September 25, 2025.

Therefore, the owner is not entitled to increase the rental value in existing contracts or contracts concluded after the effective date of the new regulatory provisions.

As for the rest of the Kingdom’s cities, increasing the rental value is subject to an agreement between the landlord and tenant in accordance with the contract documented on the Ejar platform.

The rent for vacant properties that have been rented is fixed according to the value of their last lease, while for properties that have not been previously rented, the rent value is calculated according to the agreement of both parties.

Objection to the rent value

Objection to the rent value

The lessor may object to the specified rental value of the vacant property that has been rented in the following cases:

• If the property has undergone substantial structural or structural restoration work that has increased its rental value.
• If the last lease contract was concluded before 2024.
• Any other cases approved by the Board of Directors of the General Real Estate Authority.

Is the lease renewed automatically?

Yes, the lease contract is automatically renewed according to the new lease system unless one of the parties submits a request that he does not wish to renew at least 60 days before the expiration date of the contract period, except in the following cases:

• Fixed-term leases that have 90 days or less remaining when the new regulatory provisions come into effect.
• Contracts in which the parties agree to terminate them by mutual consent after the expiration of the notice period.

Does the landlord have the right to evict the tenant?

Does the landlord have the right to evict the tenant?

The landlord may not evict the tenant and oblige him to vacate the property if the tenant wishes to renew the lease contract, except in specific cases stipulated in the new regulatory provisions to control the rental relationship.

In what cases can a tenant be evicted?

• Tenant defaults.
• The presence of structural defects in the property that affect the safety of the tenant and the safety of its residents, based on a technical report approved by the competent authorities.
• The landlord’s desire to use the property for personal housing or for the use of a first-degree relative.

What are the penalties for violating the provisions regulating the relationship between landlord and tenant?

Anyone who violates the provisions of the new unified rental system shall be punished with the following penalties:

• A fine not exceeding the total 12-month rent for the rented property.
• The violator is required to correct the violation in accordance with the controls set by the Authority.

A specialized lawyer from the office of Lawyer Abdul Majeed Al Rashid specializes in providing various legal services, including drafting rental contracts and reviewing their terms, following up on the procedures for implementing unified rental contracts and vacating the property before the enforcement courts, representing the client before the relevant committees and authorities, attending sessions before the general courts and pleading on behalf of the client, and other services provided.