Following the guidance of HRH Crown Prince Mohammed bin Salman, the Real Estate General Authority ("REGA") has announced a new package of measures designed to help curb rent inflation and enhance protections for both landlords and tenants in Riyadh. These positive changes, approved by the Council of Ministers and a Royal Decree, which took effect on 25 September 2025 (03 Rabi' Al-Akhir 1447 AH).
A key highlight of the new regulations is a five-year suspension of annual increases in the total rental value for all residential and commercial leases, both new and existing, within Riyadh's urban boundaries. REGA may also extend these supportive rules to other cities, pending the Council of Economic and Development Affairs ("CEDA") approval.
For vacant properties that have been leased before, the total rental value will be set according to the last registered "Ejar" contract, ensuring consistency and fairness. For properties being leased for the first time, landlords and tenants can agree on a suitable price together. To make things easier and more transparent, all leases must be registered on the Ejar platform. Either party can submit the registration, and the other has 60 days to review and raise any concerns before the details are finalized.
Across the country, leases will automatically renew unless either party provides at least 60 days' notice. In Riyadh, tenants who wish to renew their lease can do so with confidence, as landlords are only permitted to refuse renewal or request vacancy in specific cases:
- nonpayment,
- safety-related structural issues confirmed by a competent authority, or
- if the landlord needs the unit for personal use or for a close family member.
REGA will ensure that notice periods in model contracts are clear and appropriate for each situation.
Landlords have the opportunity to object to determined rental values (except for existing contracts) if:
- there have been significant renovations that affect the property's value,
- if the last lease was signed before 2024, or
- in other cases approved by REGA.
Clear guidelines for submitting and reviewing objections will be provided to ensure everyone's voice is heard.
To encourage compliance and fairness, violations of these new measures may result in fines of up to 12 months' rent, along with requirements to correct the issue and compensate affected parties. Anyone who receives a violation decision can appeal within 30 days.
To further support transparency, individuals who report violations may be eligible for a reward of up to 20% of the collected fines, according to rules set by REGA's Board.
For any matters not specifically addressed, the Civil Transactions Law will apply. REGA will actively monitor the implementation of these measures, provide helpful clarifications, and share regular market updates. The Council of Ministers may also make adjustments based on recommendations from CEDA.
Altogether, these new regulations are designed to restore balance in the market, promote transparency, and create a fair, secure environment for everyone; helping to improve quality of life and support sustainable urban growth in Riyadh.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
