Rent Increases in Kuwait (Ajrat Al-Mithl): A Legal Guide for Landlords

Controlling rent increases is one of the most rigorously regulated subjects under Kuwaiti law, designed to protect tenants from market volatility while ensuring stable, long-term returns for landlords and investors. The law strictly prohibits arbitrary rent hikes. While new Decree Law No. 95 of 2024 has streamlined enforcement, the core provisions regarding rent increases remain as stipulated in the original 1978 law.

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The Golden Rule: The Five (5) Year Period

Article (11) of the Kuwaiti Rent Law categorically establishes a temporal protection period preventing any alteration to the rental value:

"The lessor may not increase the rent, nor may the lessee demand its reduction, before the lapse of five (5) full years from the date of the commencement of the lease or from the date of the last modification made to the agreed rent."

• Mandatory Nature: Any clause inserted by the landlord into the lease agreement allowing a rent increase before the expiration of 5 years is considered absolutely void (null and void) as it violates public policy.
• Automatic Renewal: During these five years, the tenant's contract is automatically renewed annually (or according to its term) by the force of law at the identical rental value, provided they continue paying the monthly rent.

Demanding a Rent Increase After 5 Years (Ajrat Al-Mithl)

Once the immunity period (five years) expires, the landlord acquires the legal right to demand an increase in the rental value to align with current market rates. This path takes two forms:

1. Amicable Settlement and Direct Agreement

The landlord issues a notice or negotiates with the tenant regarding the new value (e.g., an increase of 50 KD). If the tenant agrees and signs an addendum or a new contract, a new "5-year protection period" begins from the date of this consensual increase.

2. Judicial Solution (Ajrat Al-Mithl Lawsuit)

If the tenant refuses the requested increase and the landlord deems it unfair based on surrounding market prices, either party (usually the landlord) has the right to resort to the Ministry of Justice Experts Department (mandated by the Rental Court) to file an "Ajrat Al-Mithl" (similar rent estimation) lawsuit.

How is 'Ajrat Al-Mithl' Determined?

When a landlord resorts to the judiciary, the court appoints an "engineering and real estate expert" to inspect the apartment or residential unit. The expert relies on several factors to estimate the fair adjudicated rent (Ajrat Al-Mithl):

• The location and position of the investment building and its proximity to services (schools, cooperative societies).
• The area of the residential apartment and the number of rooms or attached facilities (exclusive parking spots, central AC, security).
• The condition of the building (new vs. old and interior finishes).
• Comparing the rent to similar apartments in the same building or adjacent blocks in the same area (e.g., comparing an apartment in Salmiya - Block 4 to similar apartments on the same street).

Based on the expert's report, the court rules to fix the new rent retroactively from the date the lawsuit was filed or the tenant was notified. Once the judgment is issued, the door is closed again for the next 5 years.

What If the Landlord Adds Substantial Improvements?

There is a very narrow exception to the 5-year rule. The landlord may exceptionally request a one-time rent increase before the five years elapse if they have made substantial additions or major improvements to the building that increased the unit's value (e.g., installing a new central air conditioning system where none existed, or adding an elevator). The increase is estimated at a modest percentage but requires the approval and assessment of the court.

The Landager platform assists landlords and real estate companies in Kuwait by digitizing the start dates of every contract and automatically triggering "Right to Demand Rent Increase" alerts months before the 5-year cycle relates, facilitating perfect timing for tenant notifications.

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