Article 11 of the Saudi Finance Lease Law

The lessee's circumstances may change so that it no longer needs the asset or cannot continue paying, and this article gives it a way out: assigning the contract to another lessee.

But this right is subject to a basic condition: the lessor's consent. The lessee cannot transfer the contract to someone else of its own accord, because the lessor contracted with it on the basis of its position and ability to pay, and it has the right to accept or refuse the new lessee.

The article refers the provisions on assignment to the Regulations, so the detailed procedures and conditions are found there, not in the Law. The lessee, under Article 1, is the person who holds the benefit of the leased asset under the contract.

This article is linked to Article 10, which allows securities to be issued against the lessor's rights, and to Article 12, which gives the lessor or its delegate the right to inspect the asset to make sure the lessee continues to hold it and to examine its condition. Anyone wanting to assign would do well to contact the lessor before any agreement with the new lessee, and to document the consent. If the lessor refuses, or the parties disagree on the effects of the assignment, you can consult a lawyer specializing in banking, finance and finance lease cases.