Saudi Arabia approves landlord-tenant regulations

The move was taken in line with the directives previously issued by Crown Prince Mohammed bin Salman to implement a package of new regulatory measures for the rental market in Riyadh. These measures aim to address the challenges faced by the Saudi capital in the last few years due to rising residential and commercial rents.

Under these regulations, all residential and commercial rental contracts—existing or new—within Riyadh’s urban boundaries are subject to a five-year freeze on annual rent increases, effective Sept. 25, 2025. REGA may also apply these rules to other cities, governorates, or municipalities as needed, the state-owned SPA reported.

For vacant residential and commercial properties previously leased in Riyadh, rents will be fixed at the value of the latest registered Ejar contract. For the properties that were not previously leased, rent will be determined by mutual agreement between landlord and tenant.

All rental agreements must be registered on the Ejar platform. Both landlord and tenant may apply for registration. Either party may contest the contract data within 60 days of notification; otherwise, the contract is deemed valid.

Rental contracts nationwide renew automatically unless either party provides written notice of non-renewal at least 60 days before expiry. Exceptions include contracts with less than 90 days remaining at the time of enactment or agreements mutually terminated after the notice period.

In Riyadh, landlords cannot refuse renewal if the tenant wishes to extend, except in three cases: default, structural defects impacting safety as verified by an accredited government report, and the landlord’s or a first-degree relative’s intent to occupy the property.

Additional exceptions may be set by REGA’s Board.

Landlords may contest rent values in new (non-existing) contracts if the property underwent significant structural renovations affecting rental value; if the last contract was signed before 2024; and in any other case that may be determined by REGA, which will issue guidelines for dispute resolution.

Violators face fines of up to 12 months’ rent for the unit in question, in addition to correction of the breach and compensation for affected parties. REGA will issue a schedule of violations and penalties, proportional to severity.

Decisions will be handled by committees established under the Real Estate Brokerage Law. Appeals may be filed before competent judicial bodies within 30 days. Informants (excluding enforcement officials) may receive up to 20% of the collected fines if their information leads to a final violation ruling, subject to REGA’s guidelines.

Where not specifically addressed, the Civil Transactions Law applies. The Cabinet may amend these provisions upon recommendation from the Council of Economic and Development Affairs based on REGA’s reports.

REGA will enforce and monitor compliance with these measures in coordination with relevant authorities, publish guidance to stakeholders, and track rental trends to recommend adjustments as needed. Regular reports on implementation, price movements, and related real estate indicators will be submitted to the Saudi Crown Prince.

These measures mark a pivotal step toward restoring balance in Riyadh’s rental market, strengthening contractual fairness and transparency, and fostering a stable, investment-friendly environment that enhances quality of life and supports sustainable urban development.