Late Fees and Delayed Rent Payments in Kuwait: Legal Guidelines for Landlords

In the State of Kuwait, delaying the payment of monthly rent is considered one of the most exhausting real estate violations for landlords and building management budgets, especially amidst the high cost of financing investment projects. Therefore, the Kuwaiti legislator established a decisive protective system for landlords to deal with delays and provide a definitive procedural path.

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Can a Landlord Add Interest or Penalties for Late Payment?

Based on Islamic Sharia principles and the Kuwaiti Civil Code, imposing an interest rate or a hierarchical percentage increase on a debt due for payment (like rent) simply because of a delay is considered exorbitant interest or usury (Riba) which is judicially unacceptable in Kuwait, and will almost certainly be rejected in court.

• Compensation Instead of Interest (Agreed Penal Clause): Instead of traditional late-payment interest, some lawyers in Kuwait resort to including a fixed financial clause referred to as "compensation for administrative expenses and bank follow-up for bounced cheques," and this is only applied as an exceptional route with the approval of a committee or the Rental Court.
• Collecting Rights via Direct Eviction: The system and the "Kuwaiti Rent Law" prefer to grant the landlord a sharper solution by terminating the entire relationship without engaging in marginal claims for financial fines, through fundamentally rescinding the contract.

The Golden (20) Day Grace Period and Proving the Delay

Kuwaiti law (Article 20 of Rent Law No. 35 of 1978) specifies a temporal protection period or "legal grace period" for the tenant during which they cannot be penalized:

The landlord must allow a time period of (20 consecutive days) starting from the rent due date specified in the contract.

• Example: If the contract states the payment date is the "1st of every Gregorian month," the landlord is obligated to wait until the 21st of that month. If the tenant has not paid by then, the legal justification is established.

Filing an "Eviction for Non-Payment" Lawsuit

If the twenty-day period elapses without the tenant fulfilling the rent, the landlord or their legal representative has the right to head directly to file an Eviction for Non-Payment of Rent lawsuit before the (Plenary Court - Rental Circuit).

Enhanced Enforcement with Notarized Contracts (Decree Law No. 95 of 2024): Under the recent Decree Law No. 95 of 2024, if a lease is notarized and includes an "executive formula" (writ of execution), the landlord may be able to bypass a lengthy trial process to collect overdue rent or evict, provided they have formally notified the tenant and obtained a certificate of non-payment. However, the 20-day grace period remains the prerequisite for defining "late" rent that justifies such enforcement actions.

The Perquisite of Avoiding Rescission (The Tenant's First Chance)

The Kuwaiti judiciary distinguishes itself by offering a chance to the tenant if this is the first and only time they have defaulted and a lawsuit is filed against them. Under the law, if the tenant pays (all delayed installments owed, in addition to a form of compensation for litigation fees and lawyer expenses estimated by the court) before the closing of pleadings in the hearing, the request for rescission drops and their eviction is dismissed.

Repeating the Refusal and Delay (No Leniency for the Second Time)

The biggest deterrent for stalling tenants lies here; if the landlord files an eviction lawsuit for non-payment for a second time (repeating the delay and exceeding twenty (20) days) at another stage, the court will definitively rule for direct eviction even if the tenant decides to deposit the rent in the treasury during the course of the hearing, and paying off the debt will not benefit them by dropping their eviction this time.

Avoid losing control over your collections. Thanks to Landager's collection and warning tool, a building owner in Kuwait can follow up with late tenants using a strict, direct electronic alarm that accurately calculates the twenty-day period, serving as live and clear evidence sent to the Rental Court administration when litigation is necessary.

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