RIYADH: Saudi Arabia has enacted sweeping new regulations to stabilize rental prices in Riyadh, including a five-year freeze on increases for residential and commercial properties.
The measures, approved by the Cabinet and enacted by a royal decree, are designed to address surging rents in the capital and restore balance to the property market.
Effective Sept. 25, landlords will no longer be permitted to increase rental values in existing or new contracts within Riyadh’s urban boundaries for a period of five years, according to a report by the Saudi Press Agency.
The General Real Estate Authority will also have the authority to extend the freeze to other cities or regions with the approval of the Council of Economic and Development Affairs.
Crown Prince Mohammed bin Salman directed that the measures be enforced as part of broader efforts to safeguard tenant and landlord rights, strengthen transparency, and ensure fair competition in the rental market, while supporting sustainable urban development in Riyadh, according to SPA.
The news agency’s report stated: “The General Authority for Real Estate has studied the procedures in accordance with the best international practices and experiences to regulate the relationship between the landlord and the tenant.”
Under the new framework, rents for vacant units that were previously leased will be fixed at the value of the last registered contract, while rents for properties that have never been leased will continue to be determined by agreement between landlord and tenant.
All lease agreements must be registered on the government’s Ejar digital platform, with both landlords and tenants entitled to submit contracts for registration. The other party will have 60 days to object before the contract is considered legally valid.
The regulations also establish automatic renewal for leases across the Kingdom unless one party gives at least 60 days’ notice before expiration.
Contracts with less than 90 days remaining at the time of implementation are exempt, as are leases terminated by mutual agreement after the notice period.
In Riyadh, landlords cannot refuse to renew a contract if the tenant wishes to continue occupancy, except in three cases: non-payment of rent, structural safety issues verified by an official technical report, or the landlord’s personal need for the unit or that of an immediate family member.
The authority may also define additional exceptions in the future.
Landlords may challenge fixed rental values in specific circumstances, including when substantial renovations have increased property value, when the last lease contract predates 2024, or in other cases approved by the authority. The body will establish mechanisms to review and decide on such objections.
Violations of the new system will carry fines of up to 12 months’ rent for the affected unit, alongside requirements to correct the violation and compensate the injured party.
Penalties will be determined by committees established under Article 20 of the Real Estate Mediation Law. Landlords and tenants found in violation may appeal decisions within 30 days to the competent judicial authority.
Whistleblowers who are not directly involved in enforcement may also receive up to 20 percent of the collected fine if their information results in a confirmed violation, with distribution rules set by the authority.
Where the new regulations do not provide explicit guidance, provisions of the Civil Transactions Law will apply.
The Cabinet also retains the right to amend the rules based on recommendations from the Council of Economic and Development Affairs and future reports from the General Real Estate Authority.
The authority has been tasked with monitoring compliance, publishing clarifications, and providing public education on the new rules.
It will also deliver periodic reports on rental prices and market performance.
