Glossary

Contracts & Leasing

40 terms in this category

Annual Lease

One-year lease, most common in Saudi Arabia, providing stability at lower rent than short-term contracts.

Breach of Contract

Failure of either party to comply with contract terms, like non-payment or property misuse, giving the affected party right to claim compensation or termination.

Co-Signer

Person guaranteeing tenant's obligations financially and legally, becoming liable for debts if tenant defaults on payment.

Commercial Lease

Lease for commercial properties like shops, offices, and warehouses, subject to different terms than residential with potentially longer durations.

Contract Amendment

Making changes to existing lease terms by mutual agreement, such as modifying rent or adding clauses, processed through Ejar platform.

Contract Annex

A supplementary document to the original contract containing additional terms or modifications, having same legal force as the original and officially documented.

Contract Fees

Costs of authenticating contracts in Ejar, 125 SAR annually for residential and 200 SAR for commercial, paid by lessor or real estate office.

Contract Handover

Procedure of receiving property from landlord or returning it at contract end, including a report documenting property condition and meter readings.

Contract Language

The official language of the contract, originally Arabic in Saudi Arabia; translations may be added but Arabic version is the legal reference.

Contract Renewal

Extension of lease for new term under same or modified terms, automatic in Ejar unless either party expresses intent to terminate 60 days before expiry.

Contract Template

Standardized lease contract template approved by Ministry of Housing, ensuring all mandatory clauses and legally protecting both parties.

Early Termination

Ending the lease before its agreed duration, either by mutual consent or for legitimate reason, potentially incurring penalties per contract clauses.

Ejar Platform

A Saudi government platform to regulate the rental market and authenticate lease contracts electronically, mandatory for residential since 2018 and commercial later, operated by Ministry of Housing.

Electronic Signature

Legally certified digital signature used to authenticate contracts electronically through Ejar, holding same legal force as traditional signature.

Eviction

Forcing tenant to vacate the property, done only through legal channels for legitimate reasons like non-payment or contract expiry.

Force Majeure

Exceptional events beyond control of parties preventing contract execution like natural disasters, temporarily exempting from legal liability.

Furnished Lease

Lease where property comes fully furnished, usually short-term, with higher rent than unfurnished due to included furniture and appliances.

Good Faith

Legal principle obligating contract parties to deal honestly and fairly, protecting contractual relationship and preventing exploitation or fraud.

Lessee

The party who rents the property from the owner for paid rent, known as the second party, with rights and obligations under rental law.

Lessor

The party owning the property who leases it for agreed rent, known as the first party in the lease contract with specific rights and obligations.

Master Lease

Comprehensive lease for entire property or multiple units, signed by main tenant who then leases units to subtenants with landlord's permission.

Monthly Lease

Short-term lease that renews monthly, common in furnished and serviced apartments, offering flexibility at higher rent.

Notice Period

Required time period to notify the other party of intent to terminate or not renew the contract, typically 60 days before expiry in Saudi Arabia.

Property Inspection

Examining property in presence of both parties at start and end of contract to document its condition, protecting both from damage disputes later.

Renewal Notice

Official notice sent by either party before contract expiry to confirm desire for renewal or change, typically sent 60 days before.

Rent Increase

Raising rent value by the landlord, typically done at contract renewal, subject to legal restrictions preventing excessive increases and protecting tenants.

Rent-to-Own

System combining lease and purchase; tenant pays rent for set period then becomes property owner, common in Islamic real estate financing.

Rental Arrears

Unpaid rent amounts past their agreed-upon due dates, accumulating over time and giving landlord right to legal claim.

Rental Contract

A written agreement between landlord and tenant specifying rental terms for a property over a defined period for rent, registered in Ejar in Saudi Arabia.

Rental Disputes

Disputes between landlord and tenant resolved through specialized judicial committee in Ejar, providing fast solutions without resorting to general courts.

Rental Period

The agreed-upon time period for renting property, typically one year renewable, with longer durations possible for commercial contracts.

Rental Receipt

Official document proving tenant's rent payment, including amount, date, and coverage period, must be kept for future reference.

Rental Yield

Ratio of annual rental income to property value, important indicator for evaluating real estate investment viability, calculated as percentage.

Residential Lease

Lease for residential properties like apartments and villas, mandatory to document in Ejar since 2018 at 125 SAR annually.

Subletting

When tenant rents the leased property to third party, requiring landlord's written consent, prohibited under Saudi law without permission.

Tenant Blacklist

List of tenants who breached previous contracts, used by offices to avoid unreliable tenants, partially managed through Ejar.

Tenant Screening

Process of evaluating potential tenant before signing contract to verify financial ability and record, including ID, income, and credit history checks.

Termination Clause

Contract clause specifying conditions and mechanism for ending the contract early, like advance notice and applicable penalties.

Vacant Possession

Delivering property to tenant free from any legal or factual encumbrances, fundamental condition in most lease contracts.

Voluntary Vacancy

Tenant leaving the property by full free will at contract end or by agreement with landlord on early termination.