A new decree has been issued to regulate the mortgaging of granted lands in Dubai.
The decree was issued by UAE Vice President and Prime Minister and Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum.
‘Granted’ lands are the lands owned by the government and granted to beneficiaries for residential, commercial or industrial purposes, official news agency WAM reported.
According to the ruling, a beneficiary may mortgage the land to any bank or financial institution registered in Dubai.
“The mortgage is legally binding for all concerned parties if the monies arising from the pledge of the commercial and industrial land will be invested to achieve the purposes of the original grant and if the monies arising from the pledge of the residential land will be invested in maintaining, expanding or replacing the building,” the report said.
The pledge also has to be registered as per law no 14 of 2008 concerning mortgages in Dubai.
The Dubai Land Department (DLD) will not register any mortgage unless all the conditions are satisfied.
Sultan Butti bin Mejren, director-general of the DLD, said that the decree will have a “positive impact” on the emirate’s real estate market.
It will help developers and owners obtain financing from trusted financial institutions and promote the growth of investments in the real estate sector.
It also gives the DLD further mechanisms to regulate the property market, he added.
The ruling also states that the civil court is responsible for settling any disputes arising from the mortgage.
The granted residential land may not be sold if the mortgagor defaults unless it receives approval from the board of the Mohammed bin Rashid Housing Establishment.
The decree is valid from the date of issuance and will be published in the official gazette.