Long-Term Rental
Synonyms: Annual Lease، Long-Term Lease، Long Let
Last updated: 2026-09-25
Short Definition
A long-term rental is the lease of a property for one year or more, usually under an annual or multi-year contract, in which the property serves as a permanent home or business premises.
Overview
Legal Basis
Long-term leases are governed by the Civil Transactions Law issued by Royal Decree No. (M/191) dated 29/11/1444H: Article 428 provides that selling the leased property does not affect the tenant's rights, Article 440 ends the lease on expiry unless automatic renewal is stipulated and treats it as renewed if the tenant stays on with the landlord's consent, and Article 441 provides that a lease does not end on the death of either party. Leases are documented on the Ejar platform supervised by the Real Estate General Authority, and a documented unified residential lease is an executive instrument enforced at the Execution Court after a five-day period from notification. A new Execution Law was issued by Royal Decree No. (M/237) dated 3/11/1447H and is expected to take effect around late October 2026. The real estate units law allows tenants whose leases exceed five years in a single-owner property to agree with the owner to form an owners' association.
Practical Example
A family leases a villa in Al-Malqa, Riyadh, for SAR 90,000 a year under a three-year contract documented on Ejar for SAR 375 (125 × 3), with half-yearly payments of SAR 45,000 and a SAR 5,000 deposit. After a year the owner sells the villa to an investor, and the lease continues on its terms because selling the leased property does not affect the tenant's rights. Before the end of the third year the new owner wants to raise the rent to SAR 100,000, but the villa is within Riyadh's urban boundary, so no increase is allowed during the freeze, and the lease renews automatically at the same rent unless either party gives notice of non-renewal at least 60 days before it ends.
Common Mistakes
- ✗Not documenting the lease on Ejar, which costs the landlord the executive-instrument advantage and weakens both parties in a dispute.
- ✗Missing the non-renewal notice period (at least 60 days) or the rent adjustment request period (at least 90 days), so the lease renews automatically on its terms.
- ✗A Riyadh landlord assuming they can raise the rent on renewal, although annual increases are frozen for five years from 25 September 2025.
- ✗A tenant believing that a sale of the property ends their lease, although the law provides that selling the leased property does not affect their rights.
- ✗Leaving early termination, the deposit and maintenance allocation unregulated in the contract, which are the most common sources of disputes in long leases.
International Differences
In Dubai, rent increases are linked to an official rental index; in Turkey, the law caps annual residential rent increases at the average consumer price index; and in Egypt, the effects of old rent laws persist in some properties. The Saudi model stands out for mandatory unified documentation on Ejar, automatic renewal with set notice periods, treatment of the documented residential lease as an executive instrument, and the five-year freeze on increases in Riyadh.
