Ejar outlines new rental regulations, addresses FAQs

Below are the key features of the new rental regulations:

Annual rent increases are suspended for properties located within the urban boundaries of Riyadh City for a period of five years. This applies to both existing and new contracts.

The rental value of vacant properties within Riyadh’s urban boundaries will be fixed based on the last recorded rent in the Ejar system.

All residential and commercial rental contracts must be registered in Ejar, which serves as the official legal reference protecting all parties’ rights, as per Cabinet Resolution No. (292) dated 16/5/1438 AH. Unregistered contracts will not be recognized as valid or enforceable administratively or judicially.

All rental contracts across the Kingdom are automatically renewed unless either party notifies the other at least 60 days before the end of the contract of their intent not to renew.

The landlord cannot refuse to renew the lease if the tenant wishes to continue, except in specific cases: The tenant fails to pay rent, the property has structural issues affecting residents’ safety, the landlord wishes to use the property for personal residence or for an immediate first-degree relative.

Ejar also introduced a new electronic service that allows landlords to submit formal requests to tenants to increase or decrease the rent for the next contract term, through a regulated digital process ensuring transparency and traceability.

Landlords may file an objection in certain cases, such as: When major renovations or structural work have been completed that significantly affect property value, if the last lease for the property was signed before 2024.

Penalties will be imposed for violations to ensure effective enforcement and the protection of all parties’ rights.

Frequently Asked Questions About the New Rental Regulations

1- Do the new rules apply to both residential and commercial contracts?

Yes. They apply to all residential and commercial contracts to ensure a unified positive impact across the sector.

2- Do the rules apply to all contract durations?

They apply to contracts longer than three months, except for rent cap provisions, which apply to all contracts.

3- Can rent be increased in Riyadh?

Rent increases are not allowed for residential or commercial properties within Riyadh’s urban area for five years from enforcing these regulations.

4- Can rent be increased in other cities?

In cities outside Riyadh, landlords can submit a request to modify rent at renewal, but it requires tenant approval through the Ejar platform.

5- How does automatic renewal work?

Contracts are automatically renewed unless either party opts out 60 days before the contract’s expiry.

6- Can the tenant cancel automatic renewal?

Yes, by notifying the landlord at least 60 days before the end of the contract.

7- When can the landlord cancel automatic renewal?

Only in specific cases in Riyadh: nonpayment, structural issues, or personal/family use.

8- Who can request a rent adjustment?

Only the landlord can submit a request, at least 90 days before the contract ends.

9- What’s the timeframe for accepting or rejecting a rent change?

The tenant must respond before 60 days prior to contract expiry.

10-What happens if the tenant rejects a rent change?

The contract won’t renew automatically, and it will end at its expiry unless a new agreement is reached.

11- What if the tenant does not respond to the rent adjustment request?

It is considered a rejection, and the contract will end at expiry.

12- When do rent adjustments take effect?

They apply only to renewed contracts, not active ones.

13- What happens if the landlord doesn’t pay renewal fees?

The contract still renews automatically, but the fees become a debt owed by the landlord.

14- When can landlords object to the rent cap?

Only if major renovations were made or if the last contract predates 2024.

15- What if the tenant refuses a rent increase—can they stay?

In Riyadh, rent cannot be increased at all for five years. Outside Riyadh, the tenant can stay only if a new agreement is reached.

16- Can the rent cap be lifted for old contracts?

Yes, if the last contract was before 2024, the landlord may request reassessment.

17- If a property is vacant in Riyadh, what’s the rent cap?

Rent cannot exceed the last recorded rent in Ejar.

18-If the property is new and never rented, how is rent set?

The rent is set by mutual agreement between the landlord and tenant and becomes the fixed upper limit.

19- If the landlord refuses to register the contract in Ejar, what can the tenant do?

The tenant can request registration or file a complaint with the Real Estate General Authority.

20- Are all contracts automatically renewed?

Yes, all residential and commercial contracts longer than three months are automatically renewed unless notice is given 60 days in advance.

21- How can a tenant cancel renewal?

By submitting a non-renewal request at least 60 days before contract expiry.

22- How can contracts be canceled?

Either mutually or through a court ruling, as currently practiced.

23- What if a 10-year contract includes yearly rent increases?
 

In Riyadh, rent will remain fixed at the first agreed rate for five years, regardless of the clause.

24- Who bears unpaid Ejar platform fees?

The landlord is responsible for platform fees.

25- What documents are needed for an objection?

A report from a licensed real estate appraiser (and renovation permits if applicable).

26- Must the appraisal be from an accredited source?

Yes, it must come from a certified appraiser accredited by the Saudi Authority for Accredited Valuers.

27- If property ownership changes, is the rent cap reset?

No, the previous cap remains in effect.

28-Why does the rent freeze apply only to Riyadh, and will it expand?

Riyadh is the first phase, based on market studies. Expansion to other cities may occur later, by REGA’s decision and approval of the Council of Economic and Development Affairs.

29- If I agreed with the tenant on a rent increase before the new rules, can I apply it?

No. All rent increases in Riyadh are prohibited for five years.

30- What if the landlord falsely lists the property outside Riyadh to avoid the rules?

The property location will be verified based on ownership documents, and the landlord will face legal penalties.

31- Can landlords charge extra fees (e.g., parking, cleaning, homeowners’ association)?

Additional service fees (e.g., parking, cleaning) may be included as fixed items in the contract. Homeowners’ association fees are set separately via the “Mullak” platform and not included in the rental contract.