Saudi Gazette report

RIYADH — The Saudi Real Estate General Authority unveiled its plans to carry out studies on expanding the implementation of the regulations with regard to freezing rent increase to encompass all regions across the Kingdom for a period of five years, Al-Arabiya.net reported.

Tayseer Al-Mufarrej, spokesman of the authority, said that the authority continues to monitor real estate indicators in the Saudi cities and the regulations will be implemented in accordance with market standards and the outcome of monitoring of each city. The total rent value for vacant residential and commercial property leases within the urban area of ​​the remaining cities will be stabilized accordingly. The authority is also studying, based on its real estate monitoring indicators, ways to regulate the relationship between landlords and tenants.

The Saudi capital city of Riyadh recently witnessed the implementation of a package of measures to regulate the rental market, including the freezing of rent increases for a period of five years and that was in implementation of the directives of Crown Prince and Prime Minister Prince Mohammed bin Salman. The sweeping regulatory measures aimed to stabilize the rental market in Riyadh came into effect as part of addressing the challenges that the capital city had been witnessing over the recent years in terms of cases of exorbitant rise in residential and commercial rents.

The new measures halt the annual increase in the total rent value of the existing and new residential and commercial leases of properties located within the urban area of ​​Riyadh for a period of five years, which limits inflation and increases real estate supply. Al-Mufarrej stated that the decision to stabilize rent for five years was based on in-depth studies of the rental market in Riyadh. These studies were consistent with the plan to balance supply and demand and increase real estate supply.

“This period gives tenants the opportunity to stabilize their rents and protects them from sudden increases. At the same time, it provides investors with clarity that enables them to plan with confidence within a stable environment,” he said. Al-Mufarrej noted that the authority had detected multiple violations since the implementation of the statutory regulations governing the landlord-tenant relationship. These violations include requests to vacate the property, requests to increase the total property value, as well as payments outside the platform, and failure to document contracts through the Ejar platform.

He said that all violators will be punished with a fine of up to 12 months' rent of the total rental value. Whistleblowers will also receive an incentive reward not exceeding 20% ​​of the value of the detected violation.