Dubai Government Wants to Better Regulate the Real Estate Sector by Issuing a New Mortgage Law
A 35-article law includes all procedures concerning a mortgage in Dubai was issued by His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. The goal for issuing a mortgage law is to better regulate the emirate’s booming real estate sector.
According to Marwan Ahmed bin Ghalita, chief executive of Dubai’s Real Estate Regulatory Authority “the law is basically covering the mortgage procedures in Dubai”, this is an effort to protect the rights of lenders and borrowers and to improve transparency. The Mortgage law will come into effect after 60 days from its announcement.
The new law states that mortgage contracts must get registered with the “Land Department” of Dubai. The size of the loan, the repayment period and the value of the property must be specified. The law also states that the mortgages that are taken out on properties in Dubai can only be sold by registered financial institutions and also should be insured.
Full financial documents should be presented by the borrower and lender. “It gives more confidence to the lender and gives more security for banks” Marwan Ahmed bin Ghalita said. Dubai started allowing foreign investors to buy properties in Dubai on a freehold basis in 2002.
Since then the mortgage business grew rapidly. Back in July Standard Chartered warned that the prices of the still under construction real estate will be inflated due to speculators in the market betting on quick gains.
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Add comment August 21st, 2008
