Explanation of Article 409
This article was introduced to clarify the provisions related to determining the amount of rent; the rent in a lease contract is like the price in a sale contract, and it must meet the general conditions for the subject of obligation in every contract. This includes that the rent must be specified either in itself, by type and amount, or be determinable. The default is that its amount is determined at the time of the contract; for example, the contracting parties may agree that the rent for the house is ten thousand riyals for one year.
The article explained that it is valid for determining the amount of rent for the contracting parties to agree on valid bases by which the amount of rent is determined; such as agreeing that the rent will be the equivalent market rent at the time of the contract, or according to a specific, consistent index. The agreement on this may be implicit, such as when the contracting parties remain silent about determining the amount of rent, and the circumstances indicate their intention towards the equivalent market rent or what has been customary between them; thus, the contract is not void for not specifying the rent. Instead, their silence is interpreted based on the circumstances; for instance, if the lessor allows the lessee to benefit from the leased property without specifying the rent for that benefit, their silence indicates that they intended the equivalent market rent. The article provided two examples of valid bases by which the amount of rent can be determined:
The first example: the rent is a specific amount plus a percentage of the output, such as when a person leases agricultural land to another, with the rent being one hundred thousand riyals plus one-third of its output.
The second example: the rent is a specific amount plus a percentage of the profit; such as when a person leases a property to a commercial establishment, with the rent being one hundred thousand riyals plus 10% of the establishment's annual profit.
Related To
Article 409
Rent may be determined on the basis of valid pricing criteria, or may be a specific amount together with a known percentage of the output or the profit.