The Cabinet’s approval, during its session yesterday, of a number of regulations related to the organization of the rental sector in the Kingdom and the strengthening of confidence in it has been met with widespread satisfaction in the real estate sector, Housing Minister Majid bin Abdullah Al-Hogail praised the move, noting that it is an extension of the unlimited support and continuous attention provided by the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz, his trusted Crown Prince, and the Deputy Crown Prince —may God protect them—toward the housing sector and its regulation and development in the service of the nation and its citizens.
The rental sector… half of the real estate sector
In a statement yesterday following the Cabinet’s decision to regulate the residential rental market, the Minister of Housing affirmed that the regulations approved at yesterday’s Cabinet session will contribute to the regulation of the rental sector in the Kingdom, noting that the rental sector accounts for about half of the real estate sector, which necessitates the establishment of specific regulations and controls aimed at developing the Kingdom’s housing and real estate sector in a balanced manner, by finding sustainable solutions to its challenges and helping to safeguard the rights of all parties involved in the rental process, while ensuring the highest levels of trust and security among those transacting in this field and protecting their rights.
The "Ijar" program operates alongside ongoing efforts aimed at fulfilling the aspirations of the Kingdom’s leaders and citizens, in line with the Ministry of Housing’s goal of supporting supply, stimulating demand, and realizing its vision of regulating and facilitating a balanced and sustainable housing environment, improving the performance of the real estate sector, and increasing its contribution to GDP, in line with the National Transformation Program 2020 and Saudi Vision 2030.
Regulations Ensure Contract Reliability
On the same topic, the General Supervisor of Rental Sector Regulation, Eng. Muhammad bin Saleh Al-Bati, emphasized that the regulations issued by the Council of Ministers are of the utmost importance to the Kingdom’s rental sector, noting that they reduce potential disputes, as they ensure the necessary reliability of contracts and naturally prevent the courts from being burdened with disputes and cases stemming from basic errors in lease agreements—such as the accuracy of the contracting parties” information, the validity of the property title deed, and issues related to agency agreements and legal instruments. He noted that a large proportion of real estate cases involve rental disputes, Regarding the fee for notarization, Al-Bati explained that notarization services will be charged based on the method of payment, such as electronic payment and other options, emphasizing that the Ministry of Housing aims to regulate all financial transactions in the rental market through a payment system for the entire housing sector.
Curbing Sham Lease Contracts
The regulations stipulate that a lease agreement not registered in the electronic network shall not be considered a valid contract with administrative and judicial effects, and that the Ministries of Justice and Housing shall establish the conditions and requirements that must be met in the contract, so that it may be considered registered in the electronic network, as well as the circumstances under which this is possible, including cases where one of the contracting parties refuses to register it, The regulations also stipulate that government agencies requiring a lease agreement to provide a service must use the “Ijar” network to verify the agreement—such as public schools that require citizens to prove residency within the school’s catchment area for a student to be admitted— As proof of lease agreements for tenants will be provided exclusively through the network and not via traditional contracts or those not registered on the network, this will help curb fictitious lease agreements.”
Housing Regulation Program
The new regulations require a lease agreement registered in the “Ejar” network for the Ministry of Labor and Social Development to issue or renew work permits for non-Saudis, provided that coordination takes place with the Ministry of Housing to agree on the necessary mechanism for this, and to identify relevant professions, as this collaboration between the Ministry of Housing and the Ministry of Labor and Social Development will help regulate housing for residents.
The “Ejar” program aims to document contracts and protect the rights of all parties involved in the rental process, draft standardized lease agreements that meet the needs of beneficiaries and have them approved as enforceable instruments, accrediting and licensing real estate brokerage firms, establishing regulatory and supervisory policies and procedures for their operations after providing them with the necessary training and accreditation, and reducing the number of pending cases related to rent.
