Article 13 of the Saudi Finance Lease Law
المادة 13 من نظام الإيجار التمويلي
The article allows the lessee to apply for a license to acquire or operate the asset on the strength of the registered contract, and makes the lessee bear the license fees and renewal unless agreed otherwise.
Official text (Arabic)
This article has not been amended since the law was issued.
1- إذا كان اقتناء محل العقد أو تشغيله أو تسييره يستلزم رخصة، فلمستأجره أن يتقدم إلى الجهة المختصة بطلب الحصول على هذه الرخصة، استنادًا إلى العقد المسجل وفقًا لأحكام هذا النظام. ويجوز أن تصدر الرخصة باسم المؤجر متضمنة ما يدل على أن الأصل في حيازة المستأجر بموجب العقد، وتبين اللائحة أحكام ذلك.
2 - يتحمل المستأجر جميع الرسوم النظامية للحصول على الرخصة وتجديدها، ما لم يتفق على خلاف ذلك.
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 13 explained in plain English
Some assets may not be acquired, operated or run except under a license, such as certain vehicles and equipment. This article deals with the question: who applies for the license, in whose name is it issued, and who pays its fees?
- Applying for the license: if acquiring, operating or running the subject of the contract requires a license, the lessee may apply to the competent body for it, on the strength of the registered contract under the Law's provisions. Registration of the contract is what enables the lessee to make this application.
- The name on the license: the license may be issued in the lessor's name, provided it includes something showing that the asset is in the lessee's possession under the contract.
- Details: the Regulations set out the provisions on this.
- Fees: the lessee bears all the statutory fees for obtaining and renewing the license, unless otherwise agreed. So the rule is that the fees are on it, and the parties may agree otherwise in the contract.
The article is linked to Article 12, which allows the lessor to place its name and the contract's registration number on the leased movable and to inspect the asset, and to Article 14, which makes the lessee responsible for damage resulting from its use of the asset. Before signing, the lessee would do well to review the contract to see whether a different division of fees was agreed. In a dispute you can consult a lawyer specializing in banking, finance and finance lease cases.
Practical example
A school transport company in Taif leased buses under a finance lease that need operating licenses. The company applies for the licenses to the competent body on the strength of the registered contract, and the licenses may be issued in the name of the lessor company with a statement that the buses are in the possession of the transport company. The fees for the licenses and their renewal are on the transport company unless the contract provides otherwise.
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 13 of the Saudi Finance Lease Law
Who applies for an operating license for a finance-leased asset?
The lessee may apply to the competent body for the license on the strength of the registered contract.
Is the license issued in the lessee's name or the lessor's?
It may be issued in the lessor's name, including something showing that the asset is in the lessee's possession under the contract, and the Regulations set out the provisions on this.
Who pays the license fees and renewal?
The lessee bears them unless otherwise agreed.
More articles on Maintenance of the Leased Asset and Lessee's Duties
- Article 7
The article obliges the lessee to ordinary use and operational maintenance at its own cost, puts essential maintenance on the lessor unless agreed otherwise, and requires notice of events affecting benefit.
1 - يلتزم المستأجر باستعمال الأصل المؤجر في الأغراض المتفق عليها في حدود الاستعمال المعتاد، ويكون مسؤولًا عن القيام بأعمال الصيانة التشغيلية على نفقته وفق الأصو
- Article 8
The article prevents the lessee from making any change or modification to the leased asset without the lessor's written consent stating its nature, scope and who bears its cost.
لا يجوز للمستأجر إجراء أي تغيير أو تعديل في الأصل المؤجر دون موافقة محررة من المؤجر، تتضمن طبيعة التغيير أو التعديل، ونطاقه، والمسؤول عن كلفته.
- Article 14
The article makes the lessee responsible for damage resulting from its use of the leased asset.
يتحمل المستأجر المسؤولية عن الأضرار الناتجة من استخدامه الأصل المؤجر.
- Article 16
The article prevents the lessee from creating rights over ownership of the leased asset or mortgaging it to a third party except with the lessor's written consent.
لا يجوز للمستأجر ترتيب حقوق على ملكية الأصل، أو رهنه لطرف ثالث إلا بموافقة محررة من المؤجر.
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.