In implementation of previous directives to begin executing a package of new regulatory procedures for the rental market in Riyadh city, in response to the challenges the capital has witnessed in recent years concerning the rise in residential and commercial rental prices; the General Real Estate Authority has studied the procedures according to the best global practices and experiences to regulate the relationship between the landlord and the tenant. The Cabinet’s decision and the Royal Decree have been issued approving the regulatory provisions for regulating the relationship between the landlord and the tenant, which include the following:
Total Rent Value
First: Suspending the annual increase in the total rent value for residential and commercial property lease contracts (existing or new) for properties located within the urban area of Riyadh city for a period of (5) years starting from today’s date. Accordingly, the landlord cannot increase the total rent value of the property agreed upon in existing or new contracts starting from this date. The provisions regulating the annual rent increase can also be applied to entire cities, governorates, and centers, or parts thereof (when needed for application) by a decision of the Board of Directors of the General Real Estate Authority after the approval of the Economic and Development Affairs Council.
Second: Starting from today’s date, the total rent value for vacant residential and commercial property lease contracts within the urban area of Riyadh city (which have been previously leased) is fixed according to the total rent value of the last lease contract. The total rent value for residential and commercial properties (which have not been leased before) is calculated based on what is agreed upon between the landlord and the tenant.
Contract Documentation and Automatic Renewal
Third: Documentation of lease contracts in the “Ejar” network: The landlord of a contract not registered in the “Ejar” electronic network for lease services must apply to register the contract in “Ejar”. The tenant has the right to apply to register the contract in “Ejar”, and the other party has the right to object to the contract data before the General Real Estate Authority within (60) days from the date of being notified of the registration; if this period passes without objection, the contract data is deemed correct.
Fourth: Regulating the controls for automatic renewal in lease contracts: The lease contract (in all cities of the Kingdom) is considered automatically renewed, unless one party notifies the other party of the unwillingness to renew at least (60) days before the contract expiry date, except for the following cases: Contracts with a fixed term that have (90) days or less remaining at the time these provisions come into effect, or in the case of contracts where the two parties agree to terminate it amicably after the specified period for submitting the notice of unwillingness to renew has passed. The General Real Estate Authority may increase the notice period stipulated in
