Security over property under UAE law is a relatively simple procedure (but it’s pertinent to know the decentralized legal regimes of different Emirates) Dubai Mortgage Law -Security over Immovable Property: Security over immovable property is a Federal subject under the UAE Constitution, but Dubai owns jurisdiction to legislate in this area through Emirate-level laws. Meanwhile, in other Emirates such as Abu Dhabi (which also follows Federal laws), the regulatory infrastructure. necessary to register a true mortgage is absent. In addition to that, the official processes and legal formalities for registering a mortgage can be difficult considering its practice sometimes contradicts the prevailing laws. Khairallah Law Firm provides a diversity of legal services geared for experienced help in understanding these intricacies.

You can only register a property mortgage in favor of banks and financial institutions licensed to operate in the UAE. Consequently, foreign lenders must appoint a local bank as an agent to hold the security on their behalf.

Dubai Mortgages

Dubai Mortgage Law (Law No. 14 of 2008) governs mortgage property Dubai and property unit mortgages used as security for debt registered with the Dubai Land Department. According to the law, a valid lender must be a bank, company, or financial institution licensed and registered with the UAE Central Bank to offer property financing in the UAE. The mortgagor, on the other hand, must be the owner of the mortgage property Dubai and have the authority to dispose of it.

Only mortgages registered with the Land Department will be deemed valid. This means the property must be registered with the Land Department before you can mortgage it. If a mortgage is on the interim register, it will automatically transfer to the real estate register when the title is transferred. Additionally, the ranking of the mortgage depends on the registration time, with a serial number assigned upon registration with the Land Department.

Regarding enforcement, the Mortgage Law specifies that any clause in a mortgage contract allowing the lender to automatically take title to or sell the mortgaged property without following the legal enforcement steps if the borrower fails to repay the mortgage debt within the specified period will be deemed void. This provision, along with the execution proceedings for mortgaged property foreclosure, establishes a streamlined court-driven process in the event of borrower default. The enforcement steps adhere to mortgage laws and regulations and are as follows:

If the borrower defaults on the payment of the debt when due, the lender must first issue a 30-day written notice through the Notary Public before starting execution proceedings. Should the borrower fail to pay the amounts due within these 30 days, the lender can then request the execution judge to order an attachment against the mortgaged property. Following this order, the Land Department will auction the property according to the applicable procedures.

Property Ownership and Registration in Dubai: Understanding Dubai Mortgage Law

UAE and other GCC nationals, as well as companies fully owned by them, can own real property throughout Dubai. This includes options such as freehold ownership, long lease rights up to 99 years, and rights of usufruct and Musalaha. For other nationals, real property ownership is allowed only in ‘designated areas’ determined by the Ruler. Examples of these areas include new projects like Downtown Burj Khalifa, the Palm Jumeirah, and Dubai Marina. All ownership and related transactions must comply with UAE mortgage law.

Where owners are permitted to own property rights in an area, they must register the same with the Dubai Land Department (the only authority entitled to record real property rights of properties located in Dubai). When this happens, the Land Department will get a title certificate issued in favor of the owner to confirm that they own such property. Also, the Land Department’s governmental body keeps an interim property register. So we cannot accept any off-plan property sale contract not registered on this interim register But in basic terms, all property should now be registered and have a title.

Abu Dhabi Mortgages

Abu Dhabi currently lacks a specific mortgage law governing property mortgage and property unit mortgages as security for debt. The recent resolution reaffirming the Abu Dhabi registration framework instructs the director of the relevant property registration department to register mortgages on all property and property rights, both within and outside the investment areas. However, due to limited property and property rights registrations in the investment areas and minimal registration of long lease, Musalaha, and usufruct rights outside these areas, most property mortgages in Abu Dhabi have only been registered against freehold titles owned by UAE and GCC nationals outside the investment areas. We are still awaiting implementing regulations for the registration of other types of property mortgages.

Lenders financing an unregistered property in Abu Dhabi typically rely on a conditional assignment of the borrower’s sale and purchase agreement or lease agreement, depending on the case, along with step-in rights in the event of a loan default. They often combine this with an unregistered mortgage. Additionally, these interests are recorded on the internal register maintained by the relevant developer.

For enforcement, if a lender does not hold a registered mortgage, they will likely pursue the perfection of the conditional assignment with the developer’s cooperation or file a claim against the property as an unsecured creditor. In both scenarios, the provisions of the UAE Civil Code and Dubai mortgage law will apply.

 

Property Ownership and Registration in Abu Dhabi

Only UAE nationals and companies that are fully owned by them can own property in Abu Dhabi. GCC nationals are permitted to own property in designated “investment areas.” Meanwhile, other foreign nationals can own apartments or entire floors in buildings within specific “investment areas,” but they cannot own the land itself. Additionally, they can hold a 99-year right of usufruct or right of Musalaha.

Abu Dhabi has a property registration framework requiring all dispositions that create real property rights, including lease contracts longer than four years and rights of usufruct and Musalaha, to be registered. Recently, a resolution reinforced this framework by mandating that the director of the relevant property registration department must register all transactions and issue title certificates for ownership—whether for land, apartments, or floors in buildings—as well as long leases, Musalaha, and usufruct rights, both within and outside the investment areas. This process must comply with Dubai mortgage law.

In practice, however, registration in the investment areas has been minimal to date. While UAE nationals generally register ownership rights to property outside these areas, they rarely register long leases, musataha, and usufruct rights. Additionally, unlike Dubai, Abu Dhabi currently lacks an interim property register for off-plan property sales.

Conclusion

This difference in the implementation of property law (Dubai has its special mortgage law) is a common way to discover that UAE mortgages work differently depending on which Emirate you are involved with. We trust that the issuance of fresh implementing regulations and forthcoming property laws in Abu Dhabi will harmonize mortgage registration and enforcement procedures across both Emirates. Khairallah Law Firm For more information and support on these matters please contact us to arrange a consultation with our expert team.

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