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20 AUGUST 2008 ( SOURCE GOWEALTHY LLC )His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has issued the decree regarding Mortgage Law No 14 for 2008, legalizing the housing finance sector in a 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 based on international best practices. The law will help better regulate the emirate's growing real estate market, partly tainted by project delays and corruption probes.
The law, which will come into effect 60 days after its publication in the official gazette, stipulates that mortgage contracts be registered with the Dubai Land Department, specifying the size of the loan, the repayment period and the value of the property. 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.
The law also requires that mortgages taken out on properties in Dubai be sold by registered financial institutions, and be insured. 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.
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 will definitely boost investor confidence in the real estate market of Dubai and expand the housing finance sector.
