Long-Term Lease Conditioned on Compliance: Ending Landlord Risk in Saudi Arabia 2026
Mahmoud Adel Althomali Law Firm (Riyadh, Jeddah and Taif) applies, within its legal property management service launched in September 2026, the long-term lease conditioned on compliance as a replacement for short one-year leases. This article explains why landlords lose money by shortening the term, how conditional drafting handles the defaulting tenant, and which clauses turn an Ejar-registered lease into an enforcement tool rather than a mere document.
Why landlords lose with short leases
A one-year lease looks safe because the owner is free not to renew, but its real cost is high: a recurring marketing commission, a vacancy at every turnover, an annual rent negotiation that may drive away a good tenant, and refurbishment costs. A tenant who knows the lease ends in months does not invest in the unit or maintain it the way a long-term tenant does.
The remedy: a long term in exchange for strict compliance
The idea is simple: give the tenant what they want — stability for three to five years — and secure for the owner what they fear they will not find — an immediate exit on default. The long term is not an unconditional grant; it is conditioned on compliance, and any material breach ends the lease by express provision without a judicial assessment of cause.
Clause | Our drafting | Effect |
Term | 3–5 years | Stability for the tenant; marketing commissions saved |
Express termination clause | Automatic termination on late payment beyond a set period after statutory notice | Eviction through the enforcement court without a merits lawsuit |
Annual increase | A percentage fixed in the lease within the applicable regulations | No annual negotiation, no surprises |
Security | Bank guarantee or deposit covering at least two months | Covers the eviction period |
Use and subletting | Express prohibition, treated as a material breach | Prevents a three-party dispute over the unit |
Maintenance | Clear allocation between owner and tenant | Fewer end-of-lease disputes |
Registration | Electronic registration on Ejar from day one | The lease is an enforceable instrument |
How the Ejar lease becomes an enforcement tool
A lease registered on Ejar is an enforceable instrument under the Enforcement Law, but the instrument alone is not enough if its clauses are vague: the enforcement court enforces what is fixed in amount and due. We therefore draft payment dates, rent amounts and the notice mechanism precisely and preserve proof of notice, so that an enforcement or eviction application becomes a direct procedure.
When a long lease does not fit
A property to be sold or demolished within two years: a short lease with an extension option.
A new tenant with no verifiable record: a one-year trial with a promise of extension on compliance.
A commercial unit in a fast-changing location: an increase tied to an index rather than a fixed rate.
From practice
The tenant of a commercial unit in Jeddah missed two consecutive payments. Because the lease was registered and contained an express termination clause with a fixed notice period, the firm filed for enforcement the day the notice expired, and the eviction and collection order was issued without a merits lawsuit. The owner who had feared being tied for five years realised that the risk had never been in the term but in the contract.
FAQ: long-term leases in Saudi Arabia
Can the owner end a long lease to sell the property?
Not merely because of a sale, but a termination option against a fixed compensation can be included, or the lease transfers to the buyer on its terms.
Is the agreed annual increase binding?
Yes, if fixed in the registered lease and within the regulations applicable at the time it is applied.
What if the tenant refuses the express termination clause?
The refusal is a signal to assess; the clause is usually accepted when matched by a long term and a moderate increase.
Must the lease be registered on Ejar?
Yes. Registration is what makes the lease an enforceable instrument and shortens the path to collection and eviction.
Decision point
If you renew your leases every year for fear of a defaulting tenant, Send the title deed and the current lease via WhatsApp to +966 53 009 9485 for an initial assessment. Fees are quoted in full before any work begins. Consultations are available in English.
Practice: Property & Endowment Management — Approved by Founding Partner Mahmoud Adel Althomali, Attorney and Certified Commercial Arbitrator | Last updated: 13 September 2026 | Arabic version: here
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