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The mortgage law in Dubai, United Arab Emirates (UAE), governs the rights and obligations of the borrower and lender within the mortgage contract. It has been precisely structured to encourage foreign investments while safeguarding the interests of the financial institutions. While the law is similar to that of other jurisdictions, the UAE sets specific rules on mortgage properties, foreclosure processes and more.
Despite the process seeming straightforward, complexities often arise regarding mortgage law. Certain situations such as understanding the terms and conditions of the mortgage contract, dealing with a foreclosure, refinance planning, and loan modifications may require legal expertise. If you're a foreign investor not familiar with local mortgage law, it's highly advisable to seek legal advice to navigate these complexities.
The Dubai law allows only UAE-based financial institutions to provide mortgage loans. Foreign lenders are not allowed to provide mortgage loans against properties in the UAE. Furthermore, mortgage in Dubai is based on the concept of registration, and without registration, a mortgage is considered void. Also, in the event of a default, the mortgage contract cannot be unilaterally altered by the bank, and the foreclosure process requires an execution judge's approval.
Yes, foreigners, both resident and non-resident in the UAE, can get a mortgage in Dubai, provided it is from a UAE-based financial entity.
In the event of a default, the lender must file a lawsuit. An execution judge then approves the foreclosure process, which typically involves auctioning the property.
Yes, but the term of the mortgage cannot exceed that of the leasehold.
Yes, in addition to the loan amount, costs such as registration fees, property valuation fees, and life insurance may apply.
The maximum term of a mortgage loan can go up to 25 years for salaried individuals and 20 years for self-employed professionals.
The Land Department and the Dubai Economic Department are the main governmental bodies that oversee real estate and economic activities, respectively, in Dubai. The UAE Central Bank is also a key player regulating all financial institutions.
Anyone seeking legal advice or assistance in mortgage-related issues should consult an experienced local lawyer or a law firm specialized in real estate. Remember to gather all relevant documents, including the mortgage contract, property purchase agreement, and any other related documents before attending the first consultation.
