Article 6 of the Saudi Finance Lease Law
المادة 6 من نظام الإيجار التمويلي
The article obliges the lessee to pay rent on time even if it does not benefit, unless due to the lessor, and regulates acceleration of installments on delay and refund of rent paid in advance.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يدفع المستأجر دفعات الأجرة المتفق عليها في المواعيد المحددة في العقد ولو لم ينتفع بالأصل المؤجر، إلا إذا كان عدم الانتفاع بسبب المؤجِّر.
2 - يجوز اشتراط تقديم حلول دفعات أجرة مستقبلية، يدفعها المستأجر في حال تأخره في السداد، بشرط ألا تتجاوز عدد الدفعات التي تأخر عن سدادها.
3 - يجوز تعجيل جزء من الأجرة، ويرد المعجَّل من الأجرة إن تعذر تسليم الأصل أو الانتفاع به بسبب لا يعود إلى المستأجر.
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 6 explained in plain English
This article is the basis of the lessee's financial obligation, and has three paragraphs:
- Payment on time even without benefit: the lessee pays the agreed rent installments on the dates set in the contract, even if it does not benefit from the leased asset. The only exception is that the lack of benefit is due to the lessor itself.
- Acceleration of future installments on delay: the contract may provide that the lessee pays future rent installments in advance if it is late in paying, but with an important limit: the number of these installments may not exceed the number of installments it was late in paying. Someone late on two installments may not be asked under this condition to pay more than two future installments.
- Paying part of the rent in advance: the lessee may pay part of the rent in advance, and this advance payment is refunded if delivery of the asset or benefit from it is not possible for a reason not attributable to the lessee.
The second paragraph does not operate automatically; it must be provided for in the contract. The article is linked to Article 5, which regulates the lessee receiving the asset by a record stating its condition, and to Article 7, which requires the lessee to use the asset for the agreed purposes and to notify the lessor of events that prevent benefit from it. If the parties disagree on the cause of the lack of benefit or on the amount of installments that fall due, you can consult a lawyer specializing in banking, finance and finance lease cases.
Practical example
Khaled leased a car for his work in Riyadh under a finance lease with a monthly installment, and paid part of the rent in advance. He was late on two installments, and the contract provided for acceleration of future installments on delay, so he may not be asked under this condition for more than two future installments. And if the car had never been delivered to him for a reason not attributable to him, he would be entitled to a refund of what he paid in advance of the rent.
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 6 of the Saudi Finance Lease Law
Do I pay finance lease installments if I do not benefit from the asset?
Yes, the lessee pays the rent on time even if it does not benefit from the asset, unless the lack of benefit is due to the lessor.
Can the company demand all the remaining installments if I am late?
The contract may provide for acceleration of future installments on delay, provided their number does not exceed the number of installments the lessee was late in paying.
Is the advance payment refunded if the asset is not delivered?
Yes, rent paid in advance is refunded if delivery of the asset or benefit from it is not possible for a reason not attributable to the lessee.
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.