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Rent To Rent Contract for Saudi Arabia

Rent To Rent Contract Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that establishes a rent-to-rent arrangement where a middle tenant leases a property from the original owner (head landlord) and gains the right to sublet it to other tenants. The document outlines the rights, obligations, and responsibilities of all parties involved, ensuring compliance with Saudi real estate regulations, Sharia law principles, and the Ejar system requirements. It includes detailed provisions for property management, maintenance responsibilities, financial terms, and subletting conditions, while incorporating necessary safeguards for all parties involved in the arrangement.

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What is a Rent To Rent Contract?

The Rent To Rent Contract is a specialized agreement used in Saudi Arabia when a party wishes to lease a property with the explicit purpose of subletting it to other tenants. This arrangement has gained prominence in both commercial and residential sectors, particularly with the growth of professional property management services and the development of the Saudi real estate market under Vision 2030 reforms. The document is structured to comply with Saudi Arabian real estate laws, Sharia principles, and the mandatory Ejar system requirements. It provides comprehensive coverage of all aspects of the arrangement, including property management responsibilities, financial obligations, maintenance requirements, and subletting conditions. This type of contract is particularly relevant for property management companies, corporate housing providers, and individuals seeking to establish professional property subletting operations within the Saudi Arabian market.

What sections should be included in a Rent To Rent Contract?

1. Parties: Identification of all parties: Original Property Owner (Head Landlord), Middle Tenant (Tenant and Sub-Landlord), and details of their legal capacity

2. Background: Context of the agreement, including property details and purpose of the rent-to-rent arrangement

3. Definitions: Key terms used throughout the agreement, including 'Head Lease', 'Sub-lease', 'Property', 'Term', etc.

4. Grant of Rights: Explicit permission for the middle tenant to sublet the property and scope of these rights

5. Term and Renewal: Duration of the agreement, commencement date, and renewal provisions

6. Rent and Payment Terms: Financial terms including rent amount, payment schedule, and review mechanisms

7. Deposit and Security: Details of security deposits, their management and return conditions

8. Property Management Obligations: Responsibilities of the middle tenant in managing and maintaining the property

9. Subletting Conditions: Terms and conditions for subletting, including minimum requirements for sub-tenants

10. Maintenance and Repairs: Allocation of maintenance responsibilities between all parties

11. Insurance Requirements: Required insurance coverage and responsible parties

12. Compliance and Regulations: Obligations to comply with local laws, registration requirements, and Sharia principles

13. Default and Remedies: Consequences of breach and available remedies

14. Termination: Grounds for termination and the process to be followed

15. Governing Law and Jurisdiction: Confirmation of Saudi Arabian law application and dispute resolution mechanism

What sections are optional to include in a Rent To Rent Contract?

1. Guarantees: Required when additional security is needed from the middle tenant

2. Profit Sharing: Used when there is an agreement to share profits from subletting

3. Property Improvements: Include when the middle tenant is permitted to make improvements to the property

4. Marketing Rights: Required when specific marketing arrangements for subletting need to be detailed

5. Property Management Services: Include when additional property management services are part of the agreement

6. Change of Ownership Provisions: Include when there's a possibility of property sale during the term

7. Force Majeure: Optional clause for unforeseen circumstances affecting contract performance

What schedules should be included in a Rent To Rent Contract?

1. Property Description: Detailed description of the property including floor plans and photographs

2. Inventory: List of fixtures, fittings, and contents included in the property

3. Permitted Subletting Terms: Standard terms and conditions for sublease agreements

4. Maintenance Schedule: Detailed breakdown of maintenance responsibilities and schedules

5. Rent Payment Schedule: Detailed payment terms including dates and methods

6. Property Management Standards: Required standards for property management and maintenance

7. Registration Requirements: Documentation required for local authority registration

8. Condition Report: Initial condition report of the property with photographic evidence

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Saudi Arabia

Document Type

Agreement Contract

Cost

Free to use

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