Starting from January 15, Saudi Arabia has made it obligatory for all residential rent payments to be processed exclusively through the Ejar platform. This initiative was announced by the country’s Real Estate General Authority, which also clarified that this requirement will not extend to commercial lease agreements.
The Ejar system provides tenants and property owners with a digital infrastructure to facilitate rental transactions. It is now the only sanctioned method for fulfilling residential rental payments in the kingdom.
Key changes in Saudi rent transactions
According to the Real Estate General Authority, the enforcement of this new rule will apply to all new residential leases. It also implies that from the specified date, any payments made outside the Ejar platform’s digital channels will not be recognized as valid evidence of payment.
The authority is taking steps to phase out the issuance of electronic receipt bonds for new residential leases, as the settlement of payments will be processed automatically through Ejar’s digital channels. This change is in line with the Cabinet Resolution No. (131) which seeks to streamline payment arrangements and enhance the efficiency of rental transactions.
Authorities have emphasized the importance of providing electronic payment services to facilitate lease contract transactions, highlighting the benefits of simplifying rent payments and ensuring that funds are deposited directly into landlords’ bank accounts.
To initiate the use of these online payment channels, landlords and tenants must first document their contract through Ejar, with the assistance of a real estate broker licensed by the authority. Once the payment is completed via the Ejar system, the landlord should receive the funds in their bank account within five working days.
Since its inception in 2018, Ejar has processed over 8 million rental contracts. The platform has been widely praised for increasing transparency in the real estate market, reducing the incidence of fraudulent activities, and simplifying the payment process for both tenants and landlords.