(MENAFN - Arab News) Tenants have backed a move by the Saudi Credit Bureau (Simah) to launch a new system to regulate non-payment of rent.
Under the new system, rental payments can be made monthly instead of the traditional quarterly, semi-annual or annual schedule, with all payment information to be kept in a database.
Defaulters will be punished with a bad credit rating while tenants who pay rent on time will be rewarded with an excellent credit rating, enabling them to easily obtain credit-based products through local banks.
Local resident Aymen Al-Husseini told Arab News: "I have always been a loyal tenant, paying my rent and other bills on time and feel it is unfair that all tenants are put in one negative category, especially in the media."
He added he was happy that defaulters would finally be identified and loyal tenants rewarded under the new system.
Other tenants fed up with landlords manipulating rental prices and ignoring lease contracts also welcomed the new system.
Bandar Al-Ghazi said: "I recently had my rent increased from SR 25,000 for a three-bedroom apartment to SR 28,000 despite moving in four months ago and receiving a signed lease from the landlord."
He added the landlord told him that if he did not want to pay the increase he could leave at the end of the lease period.
He said since it is very difficult for tenants to keep constantly moving, he thought the new system would be a positive step in regulating rental prices and corrupt landlords.
The new system is expected to be launched by the end of 2014 and level the playing field between landlords and tenants who often have to spend years in court settling rental disputes.
According to data from the Jeddah Chamber of Commerce and Industry's real estate committee, defaults on rental payments in Jeddah in 2011 amounted to approximately SR 2 billion, while 30 percent of leases in Makkah were revoked due to unpaid rent bills.