Tenants want contracts

Rental prices in Jeddah have increased unjustifiably by an astonishing 100 percent over the last two years, according to an official at the Jeddah Chamber of Commerce & Industry (JCCI). These increases have created a number of housing problems currently plaguing the city.
"Many citizens are demanding contracts to protect themselves from increasing rents and to stop property owners from manipulating prices, which make it impossible for low-income tenants to pay," said Abdullah Al-Ahmari, chairman of the Real Estate Committee at JCCI.
He added that rental price manipulations were found to be unjustifiable because they were not based on necessities such as building restoration, renovation or increase in services, but instead on greed in order for property owners to make fast money.
"I am confident that soon laws will be implemented to regulate rental costs as in other parts of the world, making it possible for supply to dominate demand in the Kingdom's real estate sector," Al-Ahmari added.
In July, Al-Ahmari said that 20,000 real estate cases in Jeddah’s courts were delayed due to tenants who, unable to pay rental increases, stalled their cases by failing to appear and sending legal representation. The cases reportedly included financial claims, eviction demands and disputes over rental contracts.
"The large number of cases have caused about 10,000 vacancies. They relate to legal matters and are another reason for the increase in rental prices, owing to the number of places available for rent does not meet demand and is creating a housing crisis in the city," Al-Ahmari confirmed.
For this reason, tenants have backed a recent move by the Saudi Credit Bureau (SIMAH) to launch a new system to regulate nonpayment of rent. Under the new system, which is expected to be launched at the end of 2014, tenants may pay rent on a monthly basis instead of the previous quarterly, semi-annual or annual schedules, with all payment histories to be kept in a national database.
According to data from the JCCI Real Estate Committee, defaults on rental payments in Jeddah in 2011 amounted to SR 2 billion.