The Lease Break Agreement is a crucial document used in Saudi Arabia when parties wish to formally terminate a lease agreement before its natural expiration date. This document becomes necessary when both landlord and tenant mutually agree to end their lease relationship early, whether for residential or commercial properties. It must comply with Saudi Arabian law, including the requirements of the Ministry of Housing's Ejar system and Sharia principles. The agreement typically includes essential elements such as termination dates, financial settlements, property handover procedures, and mutual releases. It serves as a protective mechanism for both parties by clearly documenting the terms of the early termination and preventing future disputes. The document must be structured to accommodate both the civil law framework of Saudi Arabia and the practical requirements of property management.
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1. Parties: Identification of the Landlord and Tenant, including their full legal names, addresses, and any relevant identification numbers required under Saudi law
2. Background: Brief description of the existing lease agreement, including its date, property details, and reference to its registration in the Ejar system
3. Definitions: Key terms used in the agreement, including 'Termination Date', 'Original Lease', 'Property', and 'Settlement Amount'
4. Mutual Agreement to Terminate: Clear statement of both parties' agreement to terminate the lease early, specifically referencing compliance with Sharia principles of mutual consent
5. Termination Date: Specific date when the lease will terminate and the tenant's occupation rights will end
6. Settlement Terms: Financial terms including any early termination fees, return of security deposit, and settlement of outstanding rent
7. Property Handover: Requirements for the condition of the property upon return, inspection procedures, and key return process
8. Release and Waiver: Mutual release from future obligations under the original lease, subject to completion of settlement terms
9. Governing Law: Confirmation that the agreement is governed by Saudi law and Sharia principles
10. Execution: Signature blocks and execution requirements compliant with Saudi legal requirements
1. Utility Services: Section addressing the transfer or termination of utility services, required when utilities are in tenant's name
2. Maintenance Obligations: Specific provisions about repairs or maintenance required before vacation, used when property condition issues exist
3. Commercial License Provisions: Additional provisions for commercial properties regarding business licenses and registrations, used for commercial lease terminations
4. Third Party Notifications: Requirements for notifying relevant authorities or third parties, used when required by specific circumstances
5. Insurance Matters: Provisions regarding termination of insurance policies, used primarily in commercial leases
6. Confidentiality: Provisions regarding non-disclosure of termination terms, typically used in commercial contexts
1. Schedule 1 - Property Inventory: Detailed list of property condition and included items at termination
2. Schedule 2 - Settlement Calculation: Detailed breakdown of all financial settlements including rent, deposits, and any deductions
3. Schedule 3 - Handover Checklist: Specific requirements for property handover and inspection criteria
4. Appendix A - Original Lease Details: Copy or key details of the original lease agreement including Ejar registration details
5. Appendix B - Property Photographs: Documentary evidence of property condition at termination
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