Eviction Process for Companies and Commercial Shops in Kuwait

In the Kuwaiti commercial real estate sector, "stability" for companies and trademark owners is considered a fundamental pillar of investment. Kuwaiti law traditionally prohibited landlords from evicting a company or store from its premises merely because the written contract period had ended (due to statutory extension of the contract). Commercial eviction was only ordered under stringent, exceptional circumstances.

However, recent amendments through Decree No. 95 of 2024 have significantly streamlined the process for landlords to collect overdue rent and expedite evictions, particularly for notarized lease contracts. This introduces a more efficient enforcement mechanism while still requiring adherence to legal procedures.

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Direct Commercial Eviction Grounds (Rental Court & Execution Department)

According to Article 20 of Rent Law No. 35 of 1978, as augmented by Decree No. 95 of 2024, the owner of a commercial complex or tower has the right to request the termination of the contract and forced eviction in the following cases:

1. The Company Defaults on Payment (Exceeding the 20-Day Grace Period & Notarized Contracts)

The most common reason in the office market: If a tenant company or showroom exceeds a period of (20) days from the rent due date without paying.

• Expedited Enforcement with Notarized Contracts: With the introduction of Article 11 bis via Decree No. 95 of 2024, a lease contract that is notarized and stamped with an "executive formula" (a writ of execution) allows landlords to bypass a lengthy preliminary lawsuit. It enables direct action through the Execution Department to recover overdue rent or initiate eviction.
• Process for Notarized Contracts: The landlord must first serve the tenant with an official notice demanding payment and obtain a certificate from the court's treasury confirming non-deposit of rent. Then, the Execution Department can seize assets or initiate eviction.
• Last Chance (for non-notarized or traditional process): The company can avoid eviction if it pays the arrears and expenses before the judge only in the first hearing. But if the delay is repeated a second time and a new eviction lawsuit is filed, the judge will expel the company immediately, and the decoration (Fit-out) funds will be lost.

2. Changing the Commercial Activity Without Consent (Material Breach)

If a company rents a property as "administrative offices" and converts it into a "dental clinic" causing pressure on the building's elevators and parking, without obtaining written permission from the landlord to change the activity, it will be judged for eviction due to violating the conditions of use and harming the building.

3. Closure and the Landlord's Need for Repair or Demolition

• Showrooms and shops may be evicted if the owner of the old property (after 25 years have passed since its construction) decides to demolish the entire building and redevelop it, provided they issue the necessary licenses and pay compensation or arrange alternatives.

The Great Exception: Selling the Store (Al-Jadak) is Not Subletting

The general rule is that "subletting the premises" to third parties warrants immediate eviction. However, Article (20 - E) introduced a needed exception for the Kuwaiti commercial market:

If the original tenant sells the (commercial shop) as a (commercial establishment with its equipment and name / legally known as selling 'Al-Jadak') to a new investor. Here, the new investor is not considered a "subtenant"; rather, they take the place of the seller in the original lease agreement against the landlord's will, and the landlord has no right to evict them under two conditions:

1. The new buyer must practice the exact same activity.
2. It must not cause any harm to the landlord's material rights.

Executive Pressure Procedures (Ministry of Commerce, Municipality, and Execution Department)

When a final eviction judgment or an enforceable "executive formula" order is issued against a commercial company that refuses to leave:

• The Rent Execution Department (for traditional judgments) or the direct Execution Department (for notarized contracts with executive formula) communicates with active partners such as (the Ministry of Commerce, the Municipality, the Public Authority of Manpower).
• The company's file is (frozen), preventing it from bringing in labor or renewing its commercial licenses in other branches until the headquarters is vacated, the keys are handed over, and the debts in favor of the landlord are settled. This forms a lethal deterrent to evasive institutions.
• Important Note: Even with these new rules, landlords are strictly prohibited from using "self-help" measures like changing locks or cutting off utilities. All evictions must still be carried out through the official Execution Department or Rental Committee procedures.

To avoid losing assets, Landager offers commercial property managers automated alerts to track adherence to post-dated cheque dates and deal early with any payment default before resorting to the stages of commercial litigation, now including awareness of the expedited notarized contract enforcement.

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How Landager Helps

Landager tracks lease terms, commercial eviction process deadlines, and payment schedules - making it easy to stay compliant with Kuwait regulations, including the new expedited procedures for notarized contracts.