Saudi: Tenants Must Pay Property Guarantee While Documenting Rental Contract
The Saudi ‘Ejar’ platform has obligated tenants to make an one-time payment of an amount toward the rental property’s guarantee at the time of concluding the contract, and this guarantee is aimed to ensure the property’s return without damage.
The Rental Services E-Network or Ejar platform made it possible to reserve the value of the guarantee from the tenant’s wallet upon documenting the contract. The guarantee amount will be kept with Ejar portal as a neutral party. Upon expiry or cancellation of the contract, a form for the return of the housing unit to the landlord will be issued after approval by both parties, and the amounts due to both parties will be returned automatically as a balance available in their own electronic wallets.
This step is aimed to monitor the rental process, provide effective governance for its operations, safeguard the rights of the parties, consolidate the values of transparency and trust, facilitate the rental procedures and document them electronically, and also aims to reduce disputes related to safety of the residential unit.
Okaz/Saudi Gazette learnt that, the value of the damages can be deducted from the security amount deposited by the tenant in Ejar or the amount can be returned to the tenant after reaching an agreement by both parties. The process of keeping the guarantee amount takes place when the contract is registered by the licensed real estate broker and the value of the guarantee amount will be recorded.
During the process, a notification appears that the guarantee value must be paid from the tenant’s wallet. Before the tenant agrees to the contract, he must credit the wallet if there is not enough balance so that the guarantee amount is automatically kept in Ejar portal and then only the contract approval process will be completed.
After the approval of both parties and documenting the contract on the network, the system confirms the reservation process and shows the reserved security amount in the tenant’s wallet. If the contract is not documented, the reservation of the security amount is released and returned as a balance available to the tenant.
The Ejar platform defined the guarantee amount as the amount paid by the tenant as a security, to compensate the owner of the property or the utility for any damage caused to the property. If any amount is not specified for the guarantee, there is no impact on the process of documenting the contract, and if an amount is specified the guarantee must be registered and kept with Ejar.
It is noteworthy that Saudi Arabia’s Real Estate General Authority confirmed that all financial transactions related to payment of rent are being undertaken through the Ejar platform effective from Jan. 15, 2024. The electronic payment of rent is currently applicable to residential contracts only, and not to commercial contracts. The digital payment channels, approved by Ejar, are Mada or SADAD through using the biller number 153.
