Article 409 of the Saudi Civil Transactions Law
المادة 409 من نظام المعاملات المدنية · الفرع الأول: إنشاء عقد الإيجار
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.
Official text (Arabic)
This article has not been amended since the law was issued.
يصح أن يقتصر تقدير الأجرة على بيان أسسٍ صالحةٍ تتحدد بمقتضاها، ويصح أن تكون بمبلغٍ معيَّنٍ مع نسبةٍ معلومةٍ من الناتج أو من الربح.
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 409 explained in plain English
This article deals with how rent is determined in a lease contract, and gives the parties flexibility through two forms:
- Sufficing with a statement of the bases of determination: the rent need not be stated as a fixed figure in the contract; the contract may be limited to stating sound bases by which the rent is determined.
- Composite rent: the rent may be a specified sum together with a known percentage of the output or of the profit.
The limits in the text are important: the bases must be sound for determining the rent, the percentage must be known, and the accompanying sum must be specified.
In practical terms, the second form is useful in leasing commercial shops or productive land, where the parties agree on a fixed sum to which a share of the output or profit is added.
Article 410 completes the rules on rent by allowing it to be required in advance, deferred or paid in installments. This article is connected to Article 408, which specifies what may be leased.
To assess a particular situation, it is advisable to consult a lawyer who specializes in real estate or civil cases.
Practical example
A start-up rented a shop in a commercial complex in Jeddah at an annual rent of 60,000 riyals, plus 5% of the shop's net profits. This is rent made up of a specified sum together with a known percentage of the profit, and it is permitted under the article.
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 409 of the Saudi Civil Transactions Law
Must the rent be a fixed sum in the contract?
No. It suffices for the determination of the rent to be limited to a statement of sound bases by which it is determined.
Can the rent be a percentage of profits?
The article allows the rent to be a specified sum together with a known percentage of the output or the profit.
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 407
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.
الإيجار عقد يُمَكِّنُ بمقتضاه المؤجر المستأجر من الانتفاع مدةً معينةً بشيءٍ غير قابل للاستهلاك مقابل أجرةٍ.
- 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 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.