Kuwait Commercial Rent Increases (Ajrat Al-Mithl) for Landlords
How to control and demand rent increases for corporate leases, administrative offices, and commercial complexes in light of Article 11 of the Kuwaiti Rent Law.
Legal Disclaimer
This content is for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. Laws change frequently — always verify current regulations and consult a licensed attorney in your jurisdiction for advice specific to your situation. Landager is a property management platform, not a law firm.Information last verified: May 2026.
In the commercial sector, rent increases are a critical factor for real estate investment returns. Governed by Decree Law No. 35 of 1978 (Effective July 30, 1978) and its recent amendments under Decree Law No. 95 of 2024, Kuwaiti rental law establishes strict protections for commercial tenants. The five (5) year rule remains the mandatory reference point for any rent adjustments, and any contractual clause allowing an increase before this period is null and void as a matter of public policy.
Legal DisclaimerThis guide provides general legal information. Lease laws can change. Always consult a licensed notary or lawyer in this region.
The 5-Year Protection for Showrooms and Offices (Ajrat Al-Mithl)
According to Article (11), "The lessor may not increase the rent, nor may the lessee demand its reduction, before the lapse of five full years from the date of the commencement of the lease or from the date of the last modification made to the agreed rent."
- Immediate Nullity: If a mall owner commits to leasing a showroom to a car dealership with a 10-year contract at a fixed price, and adds a clause stating "rent will increase by 10% every two years," this clause is absolutely null and void because it violates the minimum 5-year period legally established in Kuwait.
- Judicial Demand: Upon the expiration of the five years, if the company and landlord do not agree on a new marginal amount, either party has the right to file a lawsuit requesting the estimation of 'Ajrat Al-Mithl' (Fair Market Rent). The Rental Court determines this value based on expert assessment of similar properties in the same area or building.
- Enforceable Leases (2024 Amendment): Under Decree Law No. 95 of 2024 (Article 11 bis), a written lease contract that is notarized and appended with an 'executive formula' serves as an enforceable executive document. This allows landlords to collect agreed-upon rent or evict for non-payment without a preliminary court judgment, provided the tenant is formally notified.
Can Pre-Agreed Increases be Built into a Commercial Contract Without Violation?
Yes, there are strategic solutions used in major commercial contracts in Kuwait:
The Step-up Rent Strategy (Escalating Rent for 5 Years)
Instead of waiting for the 5 years, both parties can agree in advance in an extended commercial lease (for more than 5 years) to allocate an escalating rent from the very beginning of signing the contract.
- Legal Example: It is agreed in the contract that the rent for the first five years will be (1000) Dinars, then from the sixth year the rent becomes (1200) Dinars... and so on. Here, the increase is valid because it initially adheres to completing the 5-year cycle before application, and the tenant has agreed to it in advance.
The Turnover Rent System (For Complexes and Shopping Centers)
Massive Malls and some global brands in Kuwait adopt an innovative strategy to cover market fluctuations, where the commercial rent consists of two parts:
- Base Rent: A fixed monthly fee.
- Percentage of Sales (Percentage / Turnover Rent): The landlord takes a percentage of revenues if sales exceed a certain threshold.
Legality in Kuwait: Decree Law No. 95 of 2024 explicitly exempts 'Mudaraba' (Profit-Sharing) leases and contracts with unconventional financial obligations (such as turnover-based rent in malls) from the standard protections of the Lease Law. This allows these commercial structures to operate outside the 5-year rent increase restriction, as they are considered participatory revenues rather than fixed rent.
Your ability to organize these statements and increases in your institution's contracts requires a tracking tool. Because the Landager system supports the inclusion of escalating rent clauses and automated demand notifications, you will never forget the due date for demanding an increase from corporate tenants after the five years have elapsed.
Back to Kuwait Commercial Laws Overview.
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Landager tracks lease terms, commercial rent increases deadlines, and payment schedules - making it easy to stay compliant with Kuwait regulations.
Sources & Official References
Frequently Asked Questions
▶What are the key landlord-tenant laws in Kuwait?
Kuwait boasts a and highly regulated residential leasing sector governed primarily by Decree Law No. (35) of 1978 Regarding Leasing of Real Estate and its subsequent amendments. The law carefully balances the rights of both the landlord and the tenant, ensuring stability for families while protecting real estate investments. This guide covers the essential compliance requirements for property owners and landlords.
Read the complete guide▶What is the legal eviction process for landlords in Kuwait?
The eviction process in Kuwait requires landlords to follow formal legal procedures. Valid grounds typically include non-payment of rent, lease violations, or the landlord's personal use of the property. Landlords must provide proper written notice, allow any required cure periods, and may need to obtain a court or tribunal order. Self-help evictions are generally prohibited.
Read the complete guide▶What are the rent increase limits and caps in Kuwait?
Kuwait has specific rules governing when and how landlords can increase rent. These rules may include caps on the percentage of increase, minimum notice periods, and restrictions on frequency. Landlords must comply with all applicable regulations when raising rent on existing tenancies.
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Kuwait has rules governing how much landlords can charge as a security deposit, how deposits must be held or protected, and the timeline for returning deposits after a tenancy ends. Landlords must provide itemized statements of any deductions and comply with all statutory deadlines to avoid penalties.
Read the complete guide▶What are the mandatory lease requirements in Kuwait?
Lease agreements in Kuwait must comply with applicable national and local laws. Required elements typically include the names of both parties, property description, rent amount and payment terms, deposit details, lease duration, and maintenance responsibility allocation. Written leases may be required for certain tenancy types or durations.
Read the complete guide▶What are the landlord maintenance and repair obligations in Kuwait?
Landlords in Kuwait are generally required to maintain rental properties in a habitable condition, keeping the structure, plumbing, electrical systems, and essential services in proper working order. The specific allocation of maintenance responsibilities between landlord and tenant should be clearly documented in the lease agreement.
Read the complete guide▶What are the late fee and penalty rules for rental properties in Kuwait?
Kuwait has specific rules regarding late fees and penalties for overdue rent. These may include mandatory grace periods, caps on late fee amounts, and restrictions on interest charges. Late fee provisions should be clearly stated in the lease agreement and must comply with local regulations to be enforceable.
Read the complete guide▶What property disclosures are landlords required to make in Kuwait?
Landlords in Kuwait must disclose relevant information about the property to prospective tenants before the lease is signed. Required disclosures typically include known material defects, environmental hazards, previous damage history, and any conditions that could affect the tenant's use and enjoyment of the property.
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