Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai issued a new decree on Tuesday regulating the mortgaging of government lands granted to individuals or businesses for residential, commercial or industrial purposes in the emirate, according to state news agency WAM.
The decree allows a beneficiary to mortgage the land to any bank or financial institution registered in Dubai. The mortgage is legally binding when monies arising from the pledge of the land is invested into achieving the purposes of the original grant or are invested into maintaining, expanding or replacing the building in the case of residential land.
Lands granted to real estate developers are considered freehold and may be mortgaged unconditionally. The Civil Court will be responsible for adjudicating any disputes arising over mortgages. Residential land may not be sold if the mortgagor defaults, unless prior approval from the Mohammed bin Rashid Housing Establishment is given. All mortgages registered prior to the issuing of the decree will still be considered valid.t.