Commercial Shop Lease template

Commercial Shop Lease Template Compliant with the Regulations of the Kingdom of Saudi Arabia

Praise be to God, and peace and blessings be upon the Messenger of God. This contract was agreed on / / AH, corresponding to / / AD, in the city of ........, between: First Party (Landlord): Mr/Ms ........................ (or company/establishment ........................, Commercial Registration No.: ............), National ID/Iqama No.: ............, National Address: ................, Mobile: ......., Email: ......., VAT Number (if any): ............ Second Party (Tenant): Mr/Ms ........................ (or company/establishment ........................, Commercial Registration No.: ............), National ID/Iqama No.: ............, National Address: ................, Mobile: ......., Email: ....... Under this contract, the First Party has leased to the Second Party: Description of the leased premises: Commercial shop No. (....) in the property located on ........ Street, ........ District, in the city of ........, with an approximate area of (....) m² and a frontage of (....) m, including: (toilet / attached storeroom / mezzanine / .... parking spaces) — to be specified at signing. Permitted activity: The shop shall be used for the following activity only: ......................... The Tenant may not change the activity or add another activity without the Landlord's prior written consent, and only in a manner that does not breach the regulations and the requirements of the competent authorities. Licences:

• The Tenant shall obtain, at its own expense, the commercial registration, the municipal licence and any other licences needed to carry on its activity, and shall renew them throughout the term of the contract.
• The Landlord shall enable the Tenant to use the contract and the documents needed to complete the licensing procedures, and warrants that the leased premises are designated for commercial use and that nothing legally prevents the agreed activity from being licensed.
• If licensing proves impossible for a reason relating to the leased premises or their legal status, the Tenant may terminate the contract and recover what it has paid for the period during which it could not use the premises.

Term and renewal: The lease term is (.......), starting on: / / AH and ending on: / / AH. A party not wishing to renew shall notify the other party in writing at least (....) days before the end of the term; otherwise the contract shall be renewed for a similar period on the terms agreed by the parties, and the renewal shall be registered through the Ejar platform. Rent:

• Annual rent: (.........) Saudi riyals, payable in advance (annually / semi-annually / quarterly).
• Value added tax: A commercial lease is a taxable supply. If the Landlord is registered with the Zakat, Tax and Customs Authority (ZATCA), VAT at the statutory rate shall be added to the rent, and the Landlord shall issue a compliant tax invoice for each payment. State here whether the amount above is (inclusive / exclusive) of VAT: ............
• Note that the Landlord is required to register for VAT once its taxable revenue reaches the threshold set by law.
• Rent shall be paid by bank transfer to IBAN: SA.............................. or through the Ejar platform. Cash payment is not recognised without a signed receipt.
• If the rent is not paid on time, the Tenant shall be given written notice and a grace period of (....) days before any action is taken.

Security deposit: A refundable deposit of (.........) Saudi riyals shall be paid on signing and refunded within (....) days of the premises being vacated and handed over, after deducting the cost of any damage, unpaid bills and whatever is needed to restore the premises, and the Tenant shall be given a statement of the deductions with supporting documents. Fit-out, decoration and reinstatement:

• The Tenant may fit out the shop and carry out decoration suited to its activity at its own expense, subject to the Landlord's written approval of any work affecting the structure, the frontage or the installations.
• Fixed improvements that cannot be removed without causing damage shall remain part of the leased premises when the contract ends, unless otherwise agreed in writing.
• On vacating, the Tenant shall restore the premises to their original condition or to the agreed condition: ........................

Signage: The Tenant may install a sign bearing its trade name in accordance with the requirements of the municipality (Amanah/Baladiyah) and at its own expense, and shall remove it on vacating and repair any damage caused by its removal. Utilities and bills: The Tenant shall bear the electricity, water and telecommunications bills and any shared service charges, shall transfer the meters into its name within (....) days of handover, and shall pay all amounts due on them in full before vacating. Obligations:

1. Landlord's obligations:
   • To hand over the leased premises in a condition fit for use for the agreed activity on / / AH.
   • To maintain the structural parts and main installations, and to repair any damage arising from a defect in the premises or from normal use.
   • Not to interfere with the Tenant's use of the premises throughout the term of the contract.
2. Tenant's obligations:
   • To use the premises for the permitted activity only, and to take care of them.
   • To carry out day-to-day operational maintenance, cleaning and safety, and to comply with Civil Defence requirements.
   • Not to store hazardous or prohibited materials, and not to cause anything harmful to the property or its neighbours.
   • To hand over the premises at the end of the contract in good condition, allowing for normal wear and tear.

Assignment and subletting: The Tenant may not assign the contract, sublet the premises or bring in a partner to operate them without the Landlord's prior written consent. If the Landlord consents to an assignment upon the sale of the business, the assignee shall replace the Tenant in all obligations, and the contract details shall be amended on the Ejar platform. Any consideration agreed between the parties in this regard shall be recorded in writing, stating its effect when the contract ends: ........................ Vacating and handover: The Tenant shall hand over the premises vacant at the end of the term, and a handover report signed by both parties shall be drawn up recording the condition of the premises and the meter readings. Dispute resolution: Any dispute shall be settled amicably; failing that, it shall fall within the jurisdiction of the competent judicial authorities in the Kingdom of Saudi Arabia, in accordance with the Kingdom's laws and in particular the Civil Transactions Law. Notices: The National Address, mobile number and email stated above are each party's chosen address for service, and any notice sent to them shall take effect. Signatures: This contract has been executed in two copies signed by both parties, each party retaining one copy, and it shall be registered through the Ejar platform. Landlord: Name: ........................ Signature: ................ Date: / / AH Tenant: Name: ........................ Signature: ................ Date: / / AH