If you're a lender with a registered mortgage in the UAE and the borrower has defaulted on repayment, you have specific legal rights to recover your investment. This guide explains the process of recovering money under a registered mortgage in the UAE, focusing on direct execution proceedings as per UAE Civil Procedure Law.
Enforcing a Registered Mortgage in the UAE (Article 225, UAE Civil Procedure Law):
According to Article 225 of the UAE Civil Procedure Law, a properly registered mortgage grants the lender the right to enforce the mortgage directly through the execution court without the need to file a separate lawsuit and obtain a judgment. This streamlined process significantly expedites debt recovery.
Key Aspects of Mortgage Enforcement in the UAE:
- Registered Mortgage is Crucial: This direct execution process applies only to mortgages that are properly registered with the competent authority (e.g., the Land Department in the relevant emirate). Registration is essential for enforcing your rights as a mortgagee. Keywords: registered mortgage UAE, mortgage registration Dubai/Abu Dhabi, property registration UAE
- Direct Access to Execution Court: Upon default, the lender can directly approach the execution court to initiate proceedings to recover the outstanding debt. This bypasses the need for a full trial, saving time and legal costs. Keywords: execution court UAE, mortgage enforcement UAE, debt recovery UAE
- No Need for Separate Lawsuit: Unlike unsecured debts, where a lawsuit is typically required to obtain a judgment before execution, a registered mortgage allows for direct enforcement. Keywords: avoid lawsuit mortgage UAE, streamlined debt recovery UAE
- Confirmation by Abu Dhabi Federal Supreme Court: The Abu Dhabi Federal Supreme Court has affirmed this legal position in its judgment dated 26.1.2014, providing further legal certainty and precedent. Keywords: Abu Dhabi Federal Supreme Court, mortgage case law UAE
Steps Involved in Mortgage Enforcement through Execution Court:
While the process is streamlined, it's essential to follow the correct procedures:
- Default Notice: Typically, a formal default notice is sent to the borrower, providing them with a final opportunity to rectify the breach of the mortgage agreement.
- Application to Execution Court: The lender submits an application to the execution court, along with the registered mortgage documents and evidence of default.
- Execution Procedures: The execution court will then initiate procedures to enforce the mortgage, which may include:
- Seizure and sale of the mortgaged property through public auction.
- Distribution of the proceeds from the sale to satisfy the outstanding debt.
Importance of Legal Counsel:
Although the process is designed to be more efficient, it's highly recommended to seek legal advice from a qualified real estate lawyer in the UAE specializing in mortgage enforcement. A lawyer can:
- Ensure all necessary documentation is in order.
- Guide you through the execution proceedings.
- Protect your rights and interests throughout the process.
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