In a major move to stabilize the rental market, Saudi Crown Prince and Prime Minister Mohammed bin Salman has directed the implementation of new regulations that freeze rental increases in Riyadh for the next five years. The decision, effective from September 25, 2025, aims to protect tenants, promote fairness, and restore balance to the capital’s real estate sector.
Key Provisions of the New Regulations
1. Rent Freeze
Residential and commercial rents in Riyadh cannot be increased under existing or new contracts for five years. This applies to all properties within the city’s urban boundaries.
2. Ejar Registration
All rental contracts must be documented through the official Ejar system. Both landlords and tenants have the right to initiate registration. Once registered, contract details are considered binding unless challenged within 60 days.
3. Automatic Renewal
Lease contracts across the Kingdom will automatically renew unless either party gives at least 60 days’ notice before expiration. In Riyadh, landlords cannot refuse renewal except in three cases:
- Non-payment of rent
- Structural issues that make the property unsafe
- The landlord’s personal or immediate family use of the property
4. Rent Value for Vacant Units
Vacant properties previously rented must adhere to the rent value in the last registered Ejar contract. For properties being leased for the first time, rent is set by agreement between landlord and tenant.
5. Appeals and Adjustments
Landlords may appeal rental values under specific conditions, such as significant renovations or if the last contract predates 2024. The General Real Estate Authority will handle these appeals under approved regulations.
6. Violations and Penalties
Violators face fines of up to 12 months’ rent for the unit in question, in addition to correcting the violation and compensating affected parties. Whistleblowers may receive up to 20% of collected fines if their reports lead to confirmed violations.
7. Broader Application
While the measures begin in Riyadh, they may be extended to other cities or regions if necessary, by decision of the General Real Estate Authority with approval from the Council of Economic and Development Affairs.
Objective of the New Measures
The Crown Prince’s directive responds to rising rental costs in Riyadh over recent years, which have posed challenges for both residents and businesses. By freezing rental hikes, mandating Ejar documentation, and regulating renewal conditions, the government seeks to:
- Ensure fairness and transparency between landlords and tenants
- Support a stable and balanced real estate market
- Safeguard tenant rights while providing landlords with clear regulatory frameworks
- Encourage sustainable urban development and improve quality of life
Oversight and Monitoring
The General Real Estate Authority will oversee the implementation of these measures, monitor rental price trends, and publish clarifications to ensure public awareness. Regular progress reports, including data on rental prices and market indicators, will be submitted to the Crown Prince to evaluate the impact of the reforms.
