Saudi Arabia freezes rent hikes in Riyadh for five years

Riyadh: In a landmark move, Saudi Arabia has introduced new regulations that prevent rent increases for both residential and commercial properties in Riyadh for the next five years.

The rules, issued under the guidance of Crown Prince Mohammed bin Salman, aim to stabilise rental prices and ensure a fair and transparent property market in the capital.

The General Real Estate Authority (REA) confirmed that the measures, approved by the Council of Ministers through royal decree, are designed to protect tenants, support landlords, and promote sustainable urban development.

Key measures

• Rent freeze: Effective from Thursday, landlords cannot increase rental values on existing or new leases within Riyadh for five years. The REA may extend the measure to other cities or regions with approval from the Council of Economic and Development Affairs.

• Vacant properties: For previously leased units, rent will remain at the level of the last registered contract. Properties being rented for the first time will have rent agreed directly between landlord and tenant, ensuring clarity and consistency.

• Mandatory contract registration: All rental agreements must be recorded on the government’s “Ejar” platform. Either party can submit contracts for registration, with a 60-day period to dispute details. Unchallenged contracts are automatically considered valid.

• Automatic renewal: Lease agreements across the Kingdom will renew automatically unless one party provides at least 60 days’ notice. In Riyadh, landlords may only refuse renewal in cases of non-payment, structural safety concerns confirmed by official reports, or personal use by the landlord or immediate family members.

• Right to appeal: Landlords may challenge fixed rents in certain situations, including substantial renovations or if the last lease was signed before 2024. The REA will establish procedures to review such disputes.

• Enforcement and penalties: Breaches of the rules may result in fines of up to 12 months’ rent, alongside corrective measures and compensation for tenants. Whistleblowers whose reports lead to confirmed violations may receive up to 20 percent of the collected fines

The REA will monitor rental trends, enforce compliance, and submit regular reports to the Crown Prince. Authorities will also issue guidance to clarify processes and raise awareness among landlords and tenants.

Officials said the regulations mark a decisive step toward creating a stable rental market in Riyadh, protecting tenants’ rights, supporting landlords, and fostering responsible investment and urban development.

Editor’s note: The headline has been updated for clarity.