Furnished Lease
Synonyms: Furnished Rental، Serviced Lease، Short-term Furnished
Last updated: 2026-05-06
Short Definition
Lease where property comes fully furnished, usually short-term, with higher rent than unfurnished due to included furniture and appliances.
Overview
Legal Basis
Furnished contracts are subject to the Civil Transactions Law and Ejar Platform Regulation, and the VAT Law which classifies them as a taxable activity. Tourist-oriented furnished apartments are additionally subject to the Tourism Accommodation Facilities Regulation issued by the Saudi Tourism Authority, requiring special licenses and classifications.
Practical Example
A real estate office in Riyadh manages 15 furnished apartments. A businessman from the UAE arrives needing one full month during a project. The office offers an apartment at SAR 8,000 monthly + SAR 1,200 VAT + SAR 1,500 deposit. Upon entering Ejar, 'Furnished - Short term' is selected. A furniture list annex (24 items) is attached, signed by both parties with detailed condition. At month-end, a furniture inspection is conducted, photos taken, and the deposit returned after confirming integrity. If an item is missing (e.g., an iron worth SAR 200), it's deducted from the deposit based on the annex.
Common Mistakes
- ✗Not preparing a detailed furniture annex — opens the door to disputes at period end on loss and damage.
- ✗Assuming furnished contract is VAT-exempt like regular residential — every commercial or short-term furnished contract is subject to 15% VAT.
- ✗Renting a furnished apartment to tourists without Saudi Tourism Authority license — a violation that may incur fines.
- ✗Omitting periodic cleaning clause in short-term contract — may create disputes over quality standards.
- ✗Delivering the apartment without verifying actual furniture condition — the lessee may find non-functioning equipment and the lessor isn't blamed unless documented.
International Differences
In the UAE, furnished rental is very common via Ejari + DTCM for tourist areas. In Turkey, short-term furnished rental (via platforms like Airbnb) requires strict tourism licensing. In Egypt, furnished rental is digitally unregulated and relies on paper contracts. The Saudi advantage: integration between Ejar, Tourism Authority, and VAT in a unified system.