The directive issued by Saudi Crown Prince Mohammed bin Salman to suspend annual rent increases for residential and commercial properties in the city of Riyadh for a period of five years, starting in September 2025, a wave of activity and optimism in the Kingdom’s real estate market, with some viewing the new regulatory controls governing the landlord-tenant relationship as a significant and fundamental shift that benefits the sector.
Regulatory Controls Governing the Landlord-Tenant Relationship
The regulatory controls governing the landlord-tenant relationship carry a message of reassurance for tenants, providing them with psychological and financial stability for a period of 5 years, but this directive is primarily aimed at creating a state of balance in the real estate market and curbing real estate inflation.
The new regulations have not overlooked the rights of landlords. Just as they have guaranteed tenants" rights and provided them with psychological and financial stability, they have also ensured that landlords can regain possession of the property in three cases, namely: the tenant’s failure to pay rent; the presence of structural defects that threaten safety; or the desire of the landlord and their first-degree relatives to use the property for personal residence.
Expert Opinions on the New Regulatory Rules Governing Tenancy Relationships
Experts described the decision to freeze rent increases for five years as a strategic step that addresses the recent crisis of arbitrary rent hikes, in addition to setting clear boundaries for the relationship between the two parties and reducing legal disputes.
According to a press statement by economist Hussein Al-Attas, he believes that freezing rent increases for five years addresses the crisis of rising rents, which he described as unacceptable, which in turn has placed a burden on citizens; these decisions are intended to resolve this crisis, while also striking a balance between landlords and tenants.
In the same vein, Walid Al-Zamil, a professor of urban planning at King Saud University, noted that the Saudi Crown Prince’s directive to prevent rent increases came at the right time to address unfair rent hikes, noting that statutory fines for violations of the provisions will ensure compliance and bring about greater discipline in the sector.
In decisive terms, Talal Al-Nashiri, a social consultant, emphasized that these decisions demonstrate the leadership’s concern for the rights of both landlords and tenants, as they give young people preparing to marry a greater opportunity for stability and make Riyadh a more attractive environment for living, working, and investing.
