While expats normally do enter into a legal tenancy agreement or Aqd Ejar in Saudi Arabia, now a new law has been passed that complicates the matter. But don’t worry Qsaudi is here to clarify what action you need to take.
The New Ejar Law as per Ministry of Housing
Earlier this year the government implemented new laws to regulate the KSA real estate market and a registration fee of SR250 was introduced. This is the amount every house rent deal or Aqd Ejar will be charged for authentication.
In addition, a new system was launched called EJAR. This portal offers several e-services related to real estate in the Kingdom and connects tenants, property owners, and real estate agents.
In 2016 itself the government started reforming the real estate sector by developing an integrated residential leasing contract.
What will happen if you do NOT register?
It is now compulsory to authenticate your aqd ejar or house rent agreement for renewal of work permit. If someone fails to authenticate their lease agreement, their work permit will not be renewed.
In order to implement this rule, the status of work permit has been electronically linked to the EJAR system. So, both issuance and renewal of your permit depend on whether you have a valid and authenticated lease contract.
How the online System Works
The EJAR website is accessible here. It basically works to link all parties of the lease or tenancy process: tenant, owner and agent (aqqari). Every real estate agency registers on the system and submits documentation for approval. Once approved they receive training and certification. Then property owners approach these aqqaris to register their properties for rent.
Finally when a tenant approaches the aqqari and decides which property to rent, he needs to register all information on the EJAR website. Once the rent/lease agreement is prepared and signed by all parties, its details are uploaded on EJAR. Then the agents awaits authentication. Finally, when the process is complete, details about rent amount, payment terms and due installments are linked to the user accounts.
Then onwards all payments take place electronically for which tenant’s SADAD account is linked to the EJAR portal. At any given time either party can view due dates for outstanding payments as well as payments that have already been made.
Using EJAR portal
In order to register, go to the official EJAR website and click on e-services in the English version of the website. It will take you to the SIGN IN page.
On the Sign In page, click Identify Registration. It will take you to another page where you will be asked for the following details: Date of Birth and ID Number (Iqama/Passport). Thereafter there will be 3 more steps and you will be registered on the portal.
Once you complete all formalities and upload documents, your SADAD system will be linked to EJAR and you can start making payments electronically.
This is how the details of installments will be displayed once you have a valid lease/rental contract linked to EJAR. Any SADAD payments you have already made will also be displayed to you and your landlord like a statement. You can also see your next due installment amount and date here. The annual rent can be paid in two modes: quarterly (every 3 months) or biannually (every six months).
Using the EJAR system, a query can be made easily to check the status of an individual’s rent agreement. Same applies to payment terms and whether he/she has paid their installments or not. For that simply click on Query Tenancy Status in e-services menu. The following screen will be displayed:
Once you provide the ID of the person as well as the date of birth and enter the CAPTCHA code, you can then view the status of the tenancy contract and details of payment.
Crucial Information about real estate agents
One aspect of the entire development is to protect rights of tents and make agents accountable for their services. Therefore expats need to be well informed about the latest regulations. The detailed rules can be found on the EJAR website.
Some important tips when dealing with a real estate agent:
- Make sure you are visiting a genuine real estate office. Also, make sure the owner and manager are both Saudi as that is compulsory as per the Ministry of Housing.
- Remember that you can bargain about the commission amount and whether you or the property owner will pay for it. As per law total commission should not exceed 2.5 percent of the value of the contract. Also, remember leasing contract should specify the commission and who will pay for it.
- Also, know that if you feel cheated or wronged by a real estate agent seek justice. They are accountable for paying damages resulting from the work of the employees of the office.
How will the Ejar Program be Beneficial?
The Ejar program will regulate an otherwise haphazard market. We all know how aqqaris would employ expats as agents and run offices in tiny nooks. Some were not even registered with the government and many times the rental contracts were unfair. They also charged huge commission from landlords and tenants. Worse still, if there was a dispute the case would linger on in courts for months and years.
Alhamdulillah, through the EJAR system, real estate is now very streamlined. Several positive effects are expected from the implementation including:
- Cashless transactions and payment of rents electronically through SADAD either monthly or quarterly or half-yearly or annually.
This will get rid of cash transactions.
- It will reduce the number of tenancy related cases in courts of law due to the unified tenancy format.
- It will contribute to the development of the local economy and bring in foreign investors.
- Helps government departments monitor residents’ status by linking EJAR with the work permit and Iqama etc.
- The Tenancy Credit Record of the tenant and the landlord is easily accessible. Maintenance activity and expenses are duly recorded in the Residential Unit Maintenance Report.
- It prevents fraud as well as advertisement of property by fake owners. the system stops real estate agents from unfairly charging money from clients.
- Also by providing training and certification to real estate brokers, the overall quality of the real estate market will improve.