Article 407 of the Saudi Civil Transactions Law
المادة 407 من نظام المعاملات المدنية · الفرع الأول: إنشاء عقد الإيجار
The article defines a lease as a contract by which the lessor enables the lessee to benefit from a non-consumable thing for a specified period in return for rent.
Official text (Arabic)
This article has not been amended since the law was issued.
الإيجار عقد يُمَكِّنُ بمقتضاه المؤجر المستأجر من الانتفاع مدةً معينةً بشيءٍ غير قابل للاستهلاك مقابل أجرةٍ.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 407 explained in plain English
This article sets out the definition of the lease contract in the Civil Transactions Law, and the definition rests on four elements:
- Enabling the benefit: the lessor's obligation is to enable the lessee to benefit from the thing, not to transfer its ownership to him.
- A specified period: the benefit is for a specified period, so a lease is by nature a temporary contract.
- A non-consumable thing: the subject of the lease is a thing that remains after it is used, such as real estate, a car or equipment, because the lessee benefits from it and then returns it.
- Rent: the benefit is in return for rent, which is what makes a lease a contract for value.
It follows that things consumed by use do not fall within this definition, and that benefit without rent is not a lease under this definition.
Article 408 details what may be leased, allowing it to be a thing, a usufruct or a right, specified individually or by type, or an undivided share. The articles that follow deal with rent, the lease term and the lessor's obligations.
To assess a particular situation, it is advisable to consult a lawyer who specializes in real estate or civil cases.
Practical example
Mohammed rented an apartment in Riyadh from its owner for one year at an annual rent of 40,000 riyals. The owner enables him to live in it throughout the period, and the apartment is a thing not consumed by use, so the contract is a lease.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 407 of the Saudi Civil Transactions Law
What is the definition of a lease contract under the Civil Transactions Law?
It is a contract by which the lessor enables the lessee to benefit for a specified period from a non-consumable thing in return for rent.
Can a thing consumed by use be leased?
The definition requires that the leased thing be non-consumable.
Must the lease period be specified?
The definition provides that the benefit is for a specified period, and Article 413 deals with the case where the period is not specified.
More articles on Lease Contract
- Article 287
The article prevents set-off between a depositary's debt against the depositor and the deposit, or between a borrower's debt against the lender and the loaned item, except by agreement of the parties.
إذا كان للمودع لديه دينٌ على المودع أو كان للمستعير دين على المعير، فلا تقع المقاصة بين الدين والوديعة أو بين الدين والشيء المعار ولو كان الدين من نوع أي منهما
- Article 296
The article sets a period of 5 years after which a claim is not heard against a party who denies it, for the rights of the liberal professions and recurring periodic rights, with an exception of 10 years for the proceeds owed by a bad-faith possessor and endowment proceeds.
دون إخلال بالنصوص النظامية، لا تُسمع الدعوى على المنكر بانقضاء (خمس) سنوات في الحقوق الآتية: أ- حقوق أصحاب المهن الحرة، كالأطباء والمحامين والمهندسين عما أدوه م
- Article 408
The article allows the leased item to be a thing, a usufruct or a right, specified individually or by type, and also allows it to be an undivided share.
1- يصح أن يكون المأجور عينًا أو منفعةً أو حقًّا؛ سواء كان معيَّنًا بالذات أو بالنوع. 2- يصح أن يكون المأجور حصَّةً شائعة.
- Article 409
The article allows it to suffice to state sound bases for determining the rent, and allows the rent to be a specified sum together with a known percentage of the output or profit.
يصح أن يقتصر تقدير الأجرة على بيان أسسٍ صالحةٍ تتحدد بمقتضاها، ويصح أن تكون بمبلغٍ معيَّنٍ مع نسبةٍ معلومةٍ من الناتج أو من الربح.
- Article 410
The article allows a lease contract to require that the rent be paid in advance, deferred or paid in installments.
يصح اشتراط تعجيل الأجرة أو تأجيلها أو تقسيطها.
- Article 411
The article regulates the rent and the right to terminate where the number of units of the leased item turns out to be more or less than stated in the contract, depending on whether the rent is a lump sum or set per unit.
1- إذا عُقد الإيجار على شيءٍ معينٍ بأجرةٍ إجماليةٍ، وذُكر عدد وحداته دون بيان أجرة كل وحدة منها، فظهرت وحداته أزيد أو أنقص؛ كانت الأجرة هي المحددة في العقد لا ي
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.