Saudi Arabia has implemented decisive new regulations to stabilize the Riyadh rental market, effectively freezing residential and commercial rental prices for five years. The new measures, enacted through a royal decree and approved by the Cabinet, will directly address the recent surge in capital city rental costs, creating a more balanced property market for everyone. Crown Prince Mohammed bin Salman personally directed these changes as part of a larger initiative to protect tenant and landlord rights, enhance transparency, and promote fair competition in the rental market.
How The New Regulations Work
Beginning on 25 September, landlords may not increase rental values for any properties within Riyadh’s urban boundaries, with this five-year rent freeze applying to both existing and new contracts. Furthermore, the General Real Estate Authority can extend this freeze to other cities with approval from the Council of Economic and Development Affairs.
Additionally, under the new regulations, rents for vacant units will remain fixed at the last registered contract value. For properties that have never been leased, rental prices will be determined through mutual agreement between landlords and tenants. All lease agreements must be registered on the government’s Ejar digital platform, allowing both parties to submit contracts for registration. The other party has 60 days to object before the contract becomes legally valid.
The regulations also mandate automatic lease renewals unless one party provides at least 60 days’ notice before expiration. The new regulations exempt contracts with fewer than 90 days remaining at implementation and leases terminated by mutual agreement.
Tenant Rights and Landlord Obligations
In Riyadh, landlords cannot refuse to renew a contract if the tenant wishes to stay, except in three specific cases: non-payment of rent, verified structural safety issues, or the landlord’s personal need for the unit. The authority may define additional exceptions in the future.
Landlords can challenge fixed rental values under certain conditions, such as substantial renovations or if the last lease contract predates 2024. The authority will establish mechanisms to review these objections.
Enforcement and Penalties
Violations of the new regulations may result in fines up to 12 months’ rent for the affected unit. Committees established under Article 20 of the Real Estate Mediation Law will determine penalties. Both landlords and tenants can appeal decisions within 30 days to the appropriate judicial authority.
Whistleblowers who report confirmed violations may receive up to 20% of the collected fine, with distribution rules set by the authority. In cases where the new regulations lack explicit guidance, the provisions of the Civil Transactions Law will apply.
The Cabinet retains the right to amend these rules based on recommendations from the Council of Economic and Development Affairs and future reports from the General Real Estate Authority. This authority will monitor compliance, publish clarifications, and educate the public about the new regulations while providing periodic reports on rental prices and market performance.
