The Lease Cancellation Agreement is a critical document used in Saudi Arabia when parties mutually agree to terminate an existing lease before its natural expiration or at the end of its term. This document is essential for compliance with Saudi Arabian real estate regulations and Sharia law principles, particularly given the recent reforms under Saudi Vision 2030. It must be registered in the EJAR system and includes specific provisions for property handover, financial settlements, and mutual releases. The agreement serves both residential and commercial contexts, requiring careful attention to local legal requirements and customs. Usage scenarios include early terminations, mutual agreements to end the lease, or formal documentation of lease expiration, with the document providing protection for all parties involved.
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1. Parties: Identification of the Landlord and Tenant, including their full legal names, addresses, and national ID/CR numbers as required under Saudi law
2. Background: Details of the original lease agreement including its date, property description, and reference to its registration in the EJAR system
3. Definitions: Key terms used in the agreement including 'Effective Date', 'Property', 'Original Lease', and 'Final Settlement'
4. Termination: Clear statement of mutual agreement to terminate the lease and the effective date of termination
5. Handover Obligations: Requirements for returning the property, including condition requirements and inspection procedures
6. Financial Settlement: Settlement of all financial matters including rent, utilities, and any other charges
7. Release and Waiver: Mutual release from future obligations under the original lease
8. Governing Law and Jurisdiction: Confirmation of Saudi law application and jurisdiction for disputes
9. Execution: Signature requirements and execution formalities
1. Security Deposit: Terms for the return of security deposit, used when a security deposit was part of the original lease
2. Early Termination Fees: Applicable when the cancellation occurs before the natural end of the lease term and includes penalties
3. Outstanding Maintenance: Used when there are pending maintenance issues that need to be addressed before termination
4. Third Party Rights: Required when there are registered mortgages, sublease arrangements, or other third-party interests
5. Confidentiality: Optional clause for commercial leases where parties wish to keep the termination terms confidential
6. Surviving Obligations: Used when certain obligations need to continue after termination
1. Property Handover Checklist: Detailed list of property conditions and items to be checked during final inspection
2. Financial Settlement Statement: Breakdown of all financial settlements including outstanding amounts and payments
3. Utility Accounts Schedule: List of utility accounts to be transferred or terminated
4. Existing Damage Report: Documentation of any existing damage or wear and tear at the time of termination
5. Required Notices: Copies of any required notices or registrations with authorities (e.g., EJAR system notifications)
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