The Commercial Tenancy Agreement is a crucial document used in Saudi Arabia when establishing a formal lease relationship between commercial landlords and tenants. This agreement is essential for businesses looking to lease commercial space in the Kingdom, whether for retail, office, industrial, or other commercial purposes. The document must comply with Saudi Arabian law, including both Sharia principles and modern commercial regulations, while addressing practical aspects of property management and tenant obligations. It typically includes comprehensive details about the property, rental terms, maintenance responsibilities, and various other commercial considerations. The agreement is designed to protect both parties' interests while ensuring compliance with local regulations and business practices. Given the complex nature of commercial property relationships in Saudi Arabia, this document serves as a fundamental tool for establishing clear rights, responsibilities, and expectations between the contracting parties.
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1. Parties: Identification of the Landlord and Tenant with full legal names, addresses, and commercial registration details
2. Background: Context of the agreement, including brief description of the property and intended commercial use
3. Definitions: Definitions of key terms used throughout the agreement, including Islamic finance terms where relevant
4. Property Details: Comprehensive description of the leased premises, including exact location, dimensions, and permitted uses
5. Term and Renewal: Duration of the lease, commencement date, and renewal provisions
6. Rent and Payment Terms: Rental amount, payment schedule, method of payment, and any escalation provisions
7. Security Deposit: Amount, terms of holding, and conditions for return of the security deposit
8. Utilities and Services: Responsibility for utilities, maintenance services, and related charges
9. Use of Premises: Permitted commercial activities and restrictions on use
10. Maintenance and Repairs: Responsibilities of each party for maintenance, repairs, and improvements
11. Insurance: Required insurance coverage and obligations of each party
12. Alterations and Improvements: Rules regarding modifications to the premises
13. Assignment and Subletting: Conditions under which the tenant may assign or sublet the premises
14. Landlord's Covenants: Obligations and warranties of the landlord
15. Tenant's Covenants: Obligations and warranties of the tenant
16. Default and Remedies: Events of default and available remedies for both parties
17. Termination: Conditions and procedures for early termination
18. Governing Law: Confirmation of Saudi law application and Sharia compliance
19. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and venue
1. Force Majeure: Provisions for unforeseen circumstances preventing performance - particularly relevant in light of recent global events
2. Operating Expenses: Detailed breakdown of operating costs - necessary for triple net leases
3. Environmental Matters: Environmental compliance requirements - important for industrial or manufacturing premises
4. Parking: Specific provisions for parking rights and restrictions - relevant for retail or office spaces
5. Signage Rights: Rules regarding external signage - important for retail premises
6. Common Areas: Rules for shared spaces - necessary for multi-tenant buildings
7. Trade License Requirements: Specific provisions regarding trade licenses - relevant for certain commercial activities
8. Competition Restrictions: Non-compete provisions - relevant for retail premises in shopping centers
1. Floor Plan: Detailed plan showing the leased premises and common areas
2. Rent Schedule: Detailed breakdown of rent payments and escalations
3. Service Charges: Breakdown of service charges and calculation method
4. Building Rules and Regulations: Specific rules governing the use of the building
5. Fit-out Guidelines: Technical specifications for tenant improvements
6. Handover Condition Report: Detailed description of premises condition at handover
7. Permitted Uses: Detailed list of permitted commercial activities
8. Maintenance Schedule: Schedule of routine maintenance responsibilities
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