How are commercial leases different on Ejar?
Short answer
Commercial leases have had to be documented on Ejar since February 2020, like residential ones, but the fee is SAR 200 for the first year and SAR 400 for each additional year, and 15% VAT is added to the rent when the lessor is registered for VAT or required to register. The rule limiting rent payments to Ejar’s digital channels, which applies to new residential leases, does not cover them, and they have their own options such as the conditional lease and the non-unified commercial lease, which is not an executive instrument. As with residential leases, automatic renewal applies to them throughout the Kingdom, and the rent freeze applies inside the Riyadh urban area.
Documentation and fees
The unified commercial lease became mandatory in February 2020 under Council of Ministers Decision 405 dated 22/9/1437H, and under Decision 292 dated 16/5/1438H an unregistered lease has no administrative or judicial effect. A new lease is concluded through a licensed real estate broker, as with residential leases.
- Documentation fee: SAR 200 for the first year and SAR 400 for each additional year (residential: SAR 125 a year), borne by the lessor.
- Change of tenant (lease assignment) fee: SAR 400 commercial, SAR 250 residential.
VAT and payment
Rent on a home is VAT-exempt, but 15% VAT is added to commercial rent when the lessor is registered or required to register. Ejar says it calculates the tax automatically on the full rent when the property owner is a taxable person.
Ejar says its digital-channel payment restriction currently applies to residential leases only. Ejar’s commercial lease page says rent can be paid monthly, quarterly, six-monthly or annually, through the usual payment channels, SADAD billing or other means, in equal or unequal instalments. The copy of the lease published on Ejar’s website, watermarked “this copy is not intended for official use”, lists cash, cheque, bank transfer and SADAD among the payment methods.
Executive instrument status and added clauses
The unified commercial lease is an executive instrument whose enforcement is requested from the Execution Court via Najiz, under the current Execution Law (M/53) until 27 October 2026 and the new law (M/237) from 28 October 2026. Ejar also offers a non-unified commercial lease, in which the parties draft the clauses and set the amicable settlement periods and the competent court; it gets the unified lease’s services except executive instrument status.
On adding terms to the unified lease itself we found no conclusive official text. Ejar’s FAQ says changing any of its clauses removes executive instrument status, and Okaz (19 July 2025) quoted an informed Ejar source, whom it did not name, as saying any term added to a commercial lease removes that status. The watermarked published copy, by contrast, has a section for additional clauses, with the core section prevailing in a conflict, and mentions no effect on the status.
Renewal and the Riyadh rent freeze
Throughout the Kingdom, a commercial lease longer than 3 months renews automatically unless one party notifies the other at least 60 days before it ends. Inside the Riyadh urban area, increases in total rent for existing and new residential and commercial leases are banned for 5 years from 25 September 2025, and agreed escalating rent is fixed at its first value for that period.
Follow-up questions
What is a conditional commercial lease?
An option that registers the lease with an agreed period before it takes effect, to prepare the unit, during which either party may cancel it. Seven days before the start date, Ejar asks the lessor to confirm the condition is met or set a new date, and the tenant then accepts or rejects.
Can a commercial tenant sublet or change its business activity?
Only as far as the lessor allows: Ejar’s commercial lease page says the lessor can give the tenant permission to sublet and to change the commercial registration or its activity once the data are updated. Subletting is not allowed at all without the lessor’s permission or later approval (Article 437 of the Civil Transactions Law).
Can a commercial lease be ended before its term?
Yes, by agreement through Ejar’s termination-by-both-parties service, which covers residential and commercial leases and has no fee. The copy of the commercial lease published on Ejar’s website, watermarked “this copy is not intended for official use”, also has an optional clause, applying only if the parties activate it, under which the party wishing to end the lease pays 20% of the remaining rent after notifying the other party and obtaining its approval.
Official sources
- Ejar: Commercial lease
- Ejar: Frequently asked questions
- Ejar: New landlord–tenant provisions (FAQ)
- Ejar: Published copy of the unified commercial lease (watermarked “this copy is not intended for official use”)
- Aleqtisadiah: Launch of Ejar’s commercial lease (February 2020)
General information for guidance, not legal advice; the governing regulations and official bodies are the final reference.
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Related questions
- Who pays the Ejar lease documentation fee, the landlord or the tenant?
- Is there VAT on residential rent in Saudi Arabia?
- Can I pay rent in cash or by direct bank transfer outside Ejar?
- How much is the security deposit on a lease, and is there a cap?
- Is a lease that is not registered on Ejar valid?
- If the landlord sells the rented property, does the lease end?
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