Article 19 of the Saudi Finance Lease Law

This article shows why registering contracts matters, and has three paragraphs:

1. Proving ownership against third parties: without prejudice to the provisions on real estate ownership, the lessor's ownership of the leased assets is proven against third parties by registering contracts under the Law and its Regulations. A third party is anyone who is not a party to the contract. Registration is the means by which the lessor asserts against others that the asset is its own even though it is in the lessee's possession.
2. Annotation on securitization: in the case of securitization, the lessor must take the steps for annotating the register of contracts, in accordance with the rules and procedures the Regulations set out.
3. Amending the contract and changing its parties: no amendment to the terms of the contract or change in its parties may be relied on against third parties except from the date it is annotated on its record. An amendment may be effective between the two parties, but it cannot be relied on against third parties before annotation.

The practical message: the lessor should make sure to register the contract and annotate every amendment or change of parties without delay, otherwise it cannot rely on it against third parties before that.

The article is linked to Article 18, which establishes the contracts registration company and sets its tasks, including registering contracts with data on the assets and the rights relating to them. It is also linked to Article 20, which requires the lessee to hand the asset back to the lessor when the contract ends, is terminated or its term expires unless it chooses to own it. If you have a dispute with a third party over ownership of a leased asset, you can consult a lawyer specializing in banking, finance and finance lease cases.