Royal Decree M/73: Key Provisions Regulating the Relationship Between Landlords and Tenants in Riyadh
A new Royal Decree No. (M/73), dated 02/04/1447 AH, was recently issued. It sets forth specific regulatory provisions to govern and stabilize the relationship between landlords and tenants within the city of Riyadh.
This decree represents a significant and transformative step in the Kingdom’s judicial landscape. Its primary aim is to address the challenges posed by rising rental prices, while also regulating and stabilizing the contractual relationship between both parties.
In this article, we at Yaqeen Al-Farasa Law Firm highlight the most important provisions introduced by this new regulatory framework.
First: Prohibition of Increasing Rent Upon Renewal or Signing a New Lease Agreement
The system imposes an explicit restriction on increasing the rent and details the application of this prohibition according to the condition of the property at the time the system comes into effect, as follows:
- Properties with Existing ContractsIf the property is leased under an existing rental contract as of the system’s effective date (04/04/1447 AH, corresponding to 26/09/2025), the landlord is not permitted to increase the rent upon renewal or when entering into a new contract.
- Previously Leased Properties: If the property was previously leased and the contract has expired, and the landlord wishes to lease it again after the system comes into effect, the total rent must not exceed the value of the last executed rental contract.
- New Properties (First Lease):If the property has not been leased before the system comes into effect, the rent value shall be determined through free agreement between the landlord and the tenant.
Second: Regulations for Objections to Rent Value for Previously Leased Properties
The system imposes an explicit restriction on increasing the rent and details the application of this prohibition according to the condition of the property at the time the system comes into effect, as follows:
- Properties with Existing Contracts: If the property is leased under an existing rental contract as of the system’s effective date (04/04/1447 AH, corresponding to 26/09/2025), the landlord is not allowed to increase the rent upon renewal or when entering into a new contract.
- Previously Leased Properties: If the property was previously leased (and the contract has expired) and the landlord wishes to lease it again after the system comes into effect, the total rent must not exceed the amount of the last executed rental contract.
- New Properties (First Lease): If the property has not been leased before the system comes into effect, the rent shall be determined by mutual agreement between the landlord and the tenant.
Third: Mandatory Renewal for Tenants Who Wish to Continue (with Exceptional Cases for Eviction)
As a general rule, the landlord is not allowed to refuse the renewal of the rental contract. This condition applies if the tenant has expressed their desire to renew (at the same rental rate).
However, the system grants the landlord the right to request eviction and allows non-renewal in specific and exclusive cases, which are:
- Non-Payment of Rent: If the tenant fails to pay the due rent.
- Safety Hazard: The presence of structural defects in the property that affect its safety and the safety of its occupants. To validate this, an official technical report from the relevant government authority is required.
- اPersonal Use (for Residential Property):The landlord’s desire to reclaim the residential property for personal use or for the use of a first-degree relative.
Fourth: Financial Penalties and Obligation to Correct Violations
If the landlord violates any of the provisions of this regulation, they shall face the following penalties:
- Monetary Penalty: It may amount to no more than the total rent for 12 months of the property in violation.
- Violation Rectification: The violating landlord is required to correct the violation (such as restoring the contract to the correct rent or enforcing mandatory renewal).
- Right to Compensation: These penalties do not affect the tenant’s right to seek compensation through judicial authorities for any damage incurred as a result of the violation.
Conclusion
This new regulation represents a significant milestone. At Yaqeen Al-Farasa Law Firm and Legal Consultancy, we take pride in providing specialized legal support to help navigate these changes.
Whether you are a landlord seeking to ensure your contracts comply with the new system, or a tenant wishing to understand your rights, our team is ready to provide expert guidance.
For more information about our real estate and rental services, you can visit the page: legal servicesTo request a consultation or contact us directly, please visit the page: Contact Us.
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