The most important legal news in local newspapers
We in Ben Arafa Law Group Consulting & Legal Legitimacy L.L.C likes to provide you of the most important legal news in the local newspapers for this week, which related to your business and commercial, labor and procedural activities, and accordingly we provide you with the most important news as follows:
(1) New Regulations for regulating the tenancy market in Riyadh
For enforcement of the directions issued by His Majesty the Crown Prince, Mohamed Bin Salman Bin Abdul Aziz, a number of new regulations are issued to regulate the tenancy market in Riyadh, in a response to the challenges faced recently by the capital as a result of huge raise in the housing and commercial tenancies. The regulations include the following:
- Fixing tenancy prices:
- Stopping the annual raise of the total lease for the (present and new) tenancy contracts of housing and commercial properties in the urban areas of Riyadh for five years commencing from the 3rd Rabea Akher, 1447H corresponding to 25th September, 2025. Accordingly the lessor shall not raise the agreed total lease value in present or new contracts from the date.
- Fixing the total value for vacant housing or commercial properties in the urban areas of Riyadh (which were previously leased) according to the tenancy value of the last tenancy contract. The total value of housing and commercial properties (which haven’t been previously leased) is calculated according to an agreement between the lessor and the lessee.
- Necessity of documenting contracts:
- Landlords should document lease contracts at “ejar” website, while tenants have the right of applying for registration.
- Each party may object the contract information at the Public Properties Authority in (60) days from the notification date, while in a case of not objecting, the information shall be considered correct.
- Automatic renewal regulations:
- The tenancy contract shall be renewed automatically in all cities of the KSA, unless a party notifies the other that he doesn’t intent to renew it at least (60) days before the date of the contract completion.
- In the scope of Riyadh, the landlord shall not reject the contract renewal in a case of the tenant intent to continue it, unless in defined cases which include the tenant failure of payment, or in a case of structural defects that affect the property safety, or in a case of the landlord or any of his relative of the first keen to occupy the unit.
- Objecting the lease value:
- The landlord may object the lease value in contracts other than the present ones in a case the property has material restorations, or in a case of another contract is made before 2024, or according to what is decreed by properties public authority.
- Violations and Fines:
- Applying a fine up to the lease value of (12 months) on violations, while correcting it and compensating the damaged party.
- Granting a reward up to (20%) of the collected fine to the one who reports a violation that results in issuing a final decision of its confirmation.
Those regulations represent a material step for rebalancing the tenancy market in Riyadh, and ensuring justice and transparency in contracting relationship between the landlord and the tenant, that reinforces secure investments and supports sustainable urban development, to achieve the goals of the KSA vision 20230 including upgrading life quality and regulating property sector.
(2): legal Information
The manager and the board of directors are jointly liable for compensating the company, the partners, the shareholders or others against the damages resulted from violating the company bylaw or its articles of association, or resulted from their mistakes or omissions or their short performance of their duties, while any contrary condition shall be null.
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