Saudi authorities crack down on 30,000 rental contract violations

Abu Dhabi: Saudi authorities have seized 29,908 paper lease contracts not registered and documented in the electronic network of rental services 'Ijar'. The violation is punishable by fines, temporary suspension of the real estate brokerage firm, or a permanent revoking of the license.

Inspection teams from the Saudi Ministry of Housing carried out more than 21,000 field trips from the beginning of 2020 until the end of September. “Only attested e-contracts will be linked to business licenses after October 4,” the ministry said. The move ensures holders of commercial rental contracts will be able to more easily renew municipal licenses.

Saudi Arabia launched a unified, mandatory lease contract for commercial real estate and to be registered on the online rental services network. The initiative involves the activation of a link between the Ministry of Housing’s ‘Sakani’ programme and the ‘Baladi’ portal.

In addition, the initiative aims to regulate the commercial real estate sector, stimulate investments, boost urban development and provide interactive services, thus helping to strike a balance between supply and demand. In July, Saudi Arabia approved a new attestation system for all real estate investments to safeguard buyers’ interests.

Clear up the processes

The move will also add further transparency to judicial documentation required for all such investments. As part of the new requirements, documents issued by notaries will specify the terms of reference, work procedures, control of their outputs, and penalties for offenders.

The documentation system will help with “preventive justice”, which will contribute to reducing disputes and lawsuits, and enhance the speed of restoring owners’ rights without the need to file a lawsuit, according to the Dr. Walid Al Samaani, Saudi Minister of Justice and Chairman of the Supreme Judicial Council.

How to register

The Ejar system made it mandatory for all real estate firms to join. It seeks to regulate the rental market with measures to protect the rights of landlords and tenants, and control rents.

The system defines the rights of tenants and landlords by having both parties sign the agreement. As per the Ministry of Labor and Social Development, a rental contract registration with Ejar is mandatory for the issuance and renewal of work permits for non-Saudis.