Procedures for correcting rental violations: 10-day grace period and new regulations

The General Authority for Real Estate in Saudi Arabia announced the adoption of a new set of regulations aimed at rectifying violations of the provisions governing the landlord-tenant relationship. This decisive step comes as part of the Authority's ongoing efforts to raise the level of compliance in the real estate market, enhance transparency, and guarantee the rights of all contracting parties.

Context of regulation and development of the real estate market

This decision cannot be viewed in isolation from the radical transformations taking place in the Kingdom's real estate sector, transformations that align with the goals of Vision 2030. Over the past few years, the Real Estate Regulatory Authority (RERA) has worked to regulate the rental sector by launching the "Ejar" electronic network, which has become the official platform for documenting contracts. These regulatory measures aim to eliminate the haphazard nature of real estate transactions and reduce legal disputes arising from undocumented or non-compliant contracts.

Regulating the relationship between landlords and tenants is the cornerstone of market stability, as clear regulations contribute to attracting real estate investments and encouraging owners to put their units on the market, while guaranteeing tenants their rights to housing or conducting business without legal concerns.

10-day grace period and standard procedures

The General Authority for Real Estate clarified the details of the new procedures, emphasizing that failure to rectify a rental violation within a legal period not exceeding ten days from the date of notification grants the Authority full power to take the necessary regulatory measures to enforce compliance. These measures include the following:

• Rental Value Adjustment: Intervention to adjust the total rent value in accordance with the valid contract and applicable regulations.
• Mandatory renewal: The lease contract is renewed automatically or mandatorily in accordance with the provisions adopted on the electronic rental services network.

Protecting "good faith" and the judicial process

In an important legal detail, the regulations addressed cases where it is impossible to rectify the violation in kind. If the property is leased to another tenant acting in "good faith" (i.e., unaware of the previous violation or the existing dispute), the authority does not immediately terminate the new contract to maintain legal stability. Instead, the dispute is referred to the competent court for adjudication according to established judicial procedures.

The Authority stressed a crucial point, which is that the application of these administrative controls does not negate the right of those affected (whether they are former tenants or owners) to resort to the judiciary to claim compensation for the material or moral damages they suffered as a result of those violations.

Expected impact on the real estate sector

These controls are expected to have a tangible positive impact in the short and medium term, namely:

• Speed ​​of decision on violations: Instead of a long wait, the new mechanism provides a quick solution within days to rectify the situation.
• Reducing the burden on the courts: through administrative handling of clear violations before they reach the courts.
• Increased reliability: Enhancing the confidence of market participants that there is a regulatory body with effective enforcement tools to protect the market from manipulation.

It is worth noting that these regulations will come into effect from the date of their adoption, which requires all real estate brokers and owners to review their contracts and ensure their compliance in order to avoid mandatory corrective measures.