In line with the earlier directive issued by His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister, a new set of regulatory actions aimed at stabilizing the rental market in Riyadh has been formally initiated. These measures come as a response to the notable challenges the capital has faced in recent years, particularly the sharp rise in residential and commercial rental rates. After conducting a comprehensive review aligned with leading international standards for landlord-tenant regulations, the Real Estate General Authority finalized a new regulatory framework. The measures were subsequently endorsed by the Council of Ministers and enacted through a Royal Decree. The approved provisions consist of the following: 1. Suspension of Annual Rental Increases All annual increases in the total rental value of residential and commercial lease contracts—whether existing or newly signed—will be suspended for properties located within the urban boundaries of Riyadh. This suspension is effective for a five-year period beginning Thursday, 25 September 2025 (03 Rabi’ Al-Akhir 1447 AH). From this date forward, landlords are prohibited from raising rental values beyond the amount stated in the contract. The regulation also provides that similar measures may be partially or fully extended to other cities or governorates if required, subject to a decision by the Authority’s Board and approval from the Council of Economic and Development Affairs. 2. Rental Value Fixation for Previously Leased Units Beginning immediately, all vacant residential and commercial units within Riyadh’s urban boundaries that were previously leased will have their rental value fixed to match the amount specified in their last registered lease contract. For properties that have never been leased, the rental value may be determined through mutual agreement between the landlord and the tenant. 3. Mandatory Lease Registration Any lease contract not yet registered on the national electronic leasing network must be submitted for registration by the landlord. Tenants are also entitled to request registration themselves. Once notification of registration is issued, the opposing party may file an objection within sixty days. If no objection is raised within that period, the contract information will be deemed accurate and final. 4. Regulation of Automatic Renewal Clauses All lease contracts across the Kingdom will be considered automatically renewed unless either party provides a written notice of non-renewal at least sixty days before the contract’s expiration. Certain exceptions apply: Fixed-term contracts with ninety days or less remaining upon the enforcement of these rules. Contracts that both parties mutually agree to terminate after the notice period passes. For properties located within Riyadh’s urban boundaries, landlords may not refuse renewal nor request the tenant to vacate except in three circumstances: Non-payment by the tenant. Structural defects confirmed by an authorized technical report indicating safety risks. The landlord’s need to use the property personally or for a first-degree relative. Additional exceptional cases may be defined by the Authority’s Board. 5. Landlords’ Right to Challenge the Rental Value Landlords may request a reassessment of the fixed rental value in specific cases, such as: Major structural improvements that materially enhance the property’s rental worth. If the last lease contract was executed before 2024. Any additional cases approved by the Authority’s Board. The Board will establish regulations and procedures for reviewing and processing these objections. 6. Violations and Penalties A fine of up to twelve months’ rent may be imposed for violations of these provisions, in addition to compensating the harmed party and correcting the violation. A formal schedule of violations and penalties will be issued, taking the severity and circumstances of each violation into account. Violations will be reviewed by the committees authorized under the Real Estate Brokerage Law. Parties may appeal any violation decision within thirty days of notification. A reward of up to 20% of the collected fine will be granted to individuals who report violations—excluding enforcement personnel—if the report results in a final ruling confirming the violation. The Board will determine the rules and distribution mechanisms for these rewards. 7. Additional Provisions For issues not specifically addressed within these regulations, the Civil Transactions Law will apply. The Council of Ministers may amend the provisions upon recommendation from the Council of Economic and Development Affairs based on the Authority’s performance reports. The Authority will oversee implementation in collaboration with relevant entities, monitor rental rates and market trends, and recommend further actions when necessary. Periodic reports on implementation progress, rental price movements, and market indicators will be submitted to ensure balance within the sector and protect the rights of all parties. The Authority will also issue clarifications, explanatory guides, and awareness materials to ensure proper understanding of the new regulatory measures and their application. These provisions mark a significant shift toward rebalancing the rental market in Riyadh, enhancing fairness, transparency, and stability in landlord-tenant relationships, while reinforcing a more secure investment environment that aligns with long-term urban development goals.