Saudi Arabia freezes rent hikes in Riyadh

Saudi Arabia has halted annual rent increases for residential and commercial properties in Riyadh for five years, in a landmark move aimed at governing and regulating landlord-tenant relations, following directives from Crown Prince Mohammed bin Salman, the state-run press agency SPA reported on Thursday.

The decision, effective September 25, 2025, is part of a wider set of regulatory measures designed to address the capital’s rising rental prices in recent years and promote a more balanced real estate market.

Mohammed bin Salman also directed regular reporting on market conditions, including price indices, to inform potential future adjustments and maintain equilibrium in the sector.

The directives stipulate that the Real Estate General Authority is mandated to activate and monitor the new regulatory measures in coordination with relevant agencies. The authority will continue to track rental prices and market activity to ensure compliance and maintain the ability to introduce further measures as needed.

In addition, the Crown Prince has directed periodic reporting on the implementation of these regulations, including updates on prices and related real estate indicators, reflecting his commitment to maintaining balance in the sector while safeguarding the rights of all parties.

To ensure effective enforcement of the regulatory measures governing landlord-tenant relations, the authority and relevant entities will publish clarifications, explain the mechanisms applied, and raise awareness of the procedures.

These regulations represent a pivotal step toward restoring balance to Riyadh’s residential and commercial rental markets, reinforcing fairness and transparency in contractual relationships between landlords and tenants. They also mark an important phase in creating a fair and secure investment environment that enhances quality of life and supports sustainable urban development efforts.

The authority conducted an extensive study of global best practices to establish the new rules governing landlord-tenant relations.

Key measures

Freeze on annual rent increases: Landlords cannot raise total rent on existing or new leases within Riyadh’s urban boundaries for five years. Similar measures may be applied in other cities or regions as needed, subject to board approval.

Stabilisation of vacant property rents: Vacant residential and commercial units will have their rent set based on the last lease agreement, while newly unleased properties will have rents mutually agreed between landlord and tenant.

Mandatory registration in “Ejar” network: Lease contracts must be recorded electronically in the government’s Ejar system, with a 60-day period for objections. Contracts registered without dispute are considered valid.

Automatic lease renewal: Contracts renew automatically unless either party provides notice of non-renewal at least 60 days before expiry. Exceptions include structural defects, non-payment, or landlords’ personal use of the property.

Objections to rent valuation: Landlords may contest rent calculations for properties that have undergone major renovations or whose last lease predates 2024. A dedicated authority committee will review and rule on such disputes.

Penalties for violations: Financial fines of up to 12 months’ rent may be imposed for breaches of the rules, with corrective actions and compensation for affected parties. Informants may receive up to 20 percent of collected fines.

Governance and oversight: The Real Estate Authority will monitor market compliance, report periodically on rent levels, and coordinate with related agencies to ensure transparent implementation.

Officials emphasised that the regulations are intended to create a fair, transparent, and sustainable rental market in Riyadh, supporting investment and urban development while protecting the rights of both landlords and tenants.