Dubai Mortgage Law

His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has issued Law No 14 for 2008 that will regulate property mortgages and the relations between mortgage issuer and the borrower. The 35-article law includes all procedures concerning a mortgage and its legal effects on the concerned bodies, as well as execution procedures on the mortgaged property and the relations between the mortgage lender and borrower. The law makes property insurance mandatory.

The law makes all mortgage deals that are not registered with the Dubai Land Department null and void, allowing the department to better regulate property and mortgage transactions. It also regulates relations between both parties involved in the mortgage process and the Dubai Land Department, which is responsible for implementing the law and ensuring the rights of both parties. The law stipulates the invalidity of any property contracts that are not registered with the department. The law allows mortgaging of properties from sold off-plan or those that are still under construction, on the condition they are registered with the land department.

The provisions of the law will be applied to properties for mortgage as property insurance with no difference between full towers or units. The law is applied to properties to be mortgaged whether they are full buildings, units or plots under the property insurance. The law does not differentiate between full towers, units, plots or rights to a property sold on the map. It also allows mortgaging of leased property for a period of no less than 10 years and no more than 99 year.

Under the law, mortgage lender shall be a bank, financial institution or a finance company licensed by the UAE Central Bank to practice the activity of property finance. The law allows the lender to manage his mortgaged property and to receive its revenues until the time the property is taken away from him by force and selling it in an auction, if the debt is not paid.

The law excludes properties granted by the government to UAE citizens for residential and commercial purposes, as those are subject to orders and instructions issued by the Ruler.