Article 14 of the Saudi Finance Lease Law
المادة 14 من نظام الإيجار التمويلي
The article makes the lessee responsible for damage resulting from its use of the leased asset.
Official text (Arabic)
This article has not been amended since the law was issued.
يتحمل المستأجر المسؤولية عن الأضرار الناتجة من استخدامه الأصل المؤجر.
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 14 explained in plain English
This article is short but important in practice: the lessee is responsible for damage resulting from its use of the leased asset.
In a finance lease the asset remains owned by the lessor, but the one who uses and controls it is the lessee. So the article ties responsibility to use, not ownership: whoever uses the asset is answerable for the damage that results from that use.
Two points should be noted in the text:
- Responsibility is tied to the lessee's use of the asset, so it concerns damage resulting from that use.
- The text is general about "damage", and does not detail its types or how it is assessed.
The article is linked to Article 13, which regulates the lessee obtaining the licenses needed to acquire, operate or run the asset and bearing their fees, since the lessee is the actual operator of the asset. It is also linked to Article 15, which provides that a sale of the asset by the lessor does not affect the contract, since ownership passes burdened with it.
In practice, the lessee would do well to use the asset with care and within what the contract allows, because it is answerable for damage resulting from its use. If damage occurs and there is a dispute over who is responsible or the amount of compensation, you can consult a lawyer specializing in civil and compensation cases.
Practical example
Yasser leased a forklift for his warehouse in Jeddah under a finance lease. While operating it, he hit a customer's car parked in the yard. The one responsible for this damage is Yasser as the user of the forklift, not the lessor company merely because it owns it.
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 14 of the Saudi Finance Lease Law
Who bears damage caused by a finance-leased asset?
The lessee is responsible for damage resulting from its use of the leased asset.
Does the finance lease company bear accident damage because it owns the asset?
The article ties responsibility to the lessee's use of the asset, so responsibility for damage resulting from its use falls on the lessee.
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 13
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.
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 لأ
- 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.