The General Real Estate Authority has posted a draft framework on the government’s “Istitlaa” platform to regulate the correction of violations related to rules governing relations between landlords and tenants.
The aim is to ensure compliance with regulations and safeguard fairness and stability in rental relationships.
The draft coincides with the government’s recent issuance of rules to regulate landlord-tenant relations, implementing earlier directives from Crown Prince and Prime Minister Prince Mohammed bin Salman to launch a package of new measures for Riyadh’s rental market.
The move responds to mounting challenges in the capital in recent years concerning rising residential and commercial rents. The rules introduce several controls, the most prominent of which is a five year freeze on annual increases to total rent values in property lease contracts.
The draft, reviewed by Asharq Al-Awsat, identifies four violations that landlords must correct. The first concerns any increase in the total rent value of a property in Riyadh. Landlords must adjust such increases to comply with the new rules within the specified period.
The second violation relates to raising the rent of a vacant property in Riyadh above the value of its most recent contract. The rent must be corrected in line with the regulations.
Refusal to register
The third violation concerns a landlord’s failure to submit a request to register a lease contract on the electronic Ejar network when the contract is not already recorded. The draft requires landlords to register these contracts on the Ejar platform.
The fourth violation relates to a landlord’s refusal in Riyadh to renew a lease and forcing a tenant to vacate in cases not permitted under the rules. The landlord must correct this if the tenant still wishes to renew.
Under the recently issued rules, landlords in Riyadh may not refuse to renew a contract or force a tenant to vacate if the tenant wishes to renew, except in three cases: the tenant’s failure to pay, structural defects that affect the safety of the property or its residents according to an approved technical report from the competent government authority, or the landlord’s desire to use the residential unit for personal use or for the use of a first degree relative.
Dispute resolution
The draft states that if the correction period expires without the violation being remedied, the authority may amend the total rent value or renew the lease contract, depending on the case, in line with the rules.
If the violation cannot be corrected because the landlord has leased the property to another good faith tenant in breach of the rules while the previous tenant still seeks to renew the same unit, the parties will be directed to the competent court to resolve the dispute.
The corrective measures do not affect a harmed party’s right to claim compensation from the party responsible for the violation before the competent court. The rules will take effect from the date they are approved and posted on the General Real Estate Authority’s website.
Automatic renewal
The rules regulating landlord-tenant relations include a five year freeze on annual increases in total rent values for residential and commercial leases, whether existing or new.
The total rent of previously leased properties will be fixed at the value of the most recent contract, while rents for properties that have never been leased will be set according to agreements between the parties.
The new rules also require landlords to register unrecorded leases on the Ejar network.
They further organize automatic renewal procedures, stating that lease contracts across all Saudi cities will renew automatically unless either party notifies the other of non renewal at least sixty days in advance.
Violators will face fines of up to the equivalent of twelve months of rent for the unit in question, in addition to correcting the violation and compensating the harmed party. The board of the General Real Estate Authority will issue a schedule of violations and corresponding fines.
Notably, the new rules allow for a reward of up to twenty percent of the collected fine for individuals who report violations, provided they are not among those responsible for enforcing the regulations.
