United Arab Emirates: Mortgage Law In Abu Dhabi

Last Updated: 7 September 2018
Article by STA Law Firm
Most Read Contributor in United Arab Emirates, July 2019

The Enforcement of Mortgages in Abu Dhabi

Mortgages- The Basics

Mortgages are a type of loan banks provide for those looking to purchase a property. The purchasing of a property is a highly important part of the modern world, with everyone potentially being under that umbrella, from the most prominent businesses purchasing for new projects to the average individual buying a first time house. The mortgage itself is a long-term source of finance, and can often be for significant amounts of money. As such, high levels of regulation are usually in place in most jurisdictions.

Dubai currently has the Law Number 13 of 2008- The Real-Estate Law, though there are plans to introduce new legislation on the matter. However, this law was specifically only for the Emirate of Dubai, and in some ways, this is understandable. Dubai is the business heart of the country, and the real estate market there is valued in the tens of billions of Dirhams. Dubai also has the highest population in the country by some margin, and so the real estate sector would require the most monitoring and regulation. However, this does not mean that States such as Abu Dhabi can ignore or rely on laws that explicitly implemented for different purposes. As if in response to this very idea, it was in 2015 that Abu Dhabi enacted a new law to cover mortgages and similar such issues.

Real Estate Law- AUH

The Abu Dhabi Law Number 3 of 2015, the Real Estate Regulatory Law (AUH Real Estate Law) came into existence three years ago with the aim of providing regulations and legislation on various matters. These include escrow law, interim register, mortgage process and more. The law covers a wide variety of areas, though the sectors most affected by it would likely be the real estate market.

In the case of Abu Dhabi real estate, the law was notably first used in a lawsuit in 2017 which related to a mortgage payment, though this will be brought up slightly later.

One of the critical areas that will make those in the real estate sector happy will be the changes to the mortgage regulations, or rather the introduction of rules specific to the matter. Before this laws introduction, the issue relied on the Abu Dhabi Municipality practices and the Federal Law Number 5 of 1985 concerning the UAE Civil Code (the Civil Code). While these laws have, until recently been used in Abu Dhabi, and have gotten the job done, they are still not specific enough to mortgages due to them not being produced with mortgages in mind as one of the critical elements, and so there will likely be questionable decisions made.

The introduction of the Civil Code would theoretically lead to a more consistent and dependable system. As is the case with anything involving money, consistency and dependability are a crucial factor and are often sought after as they provide comfort to those who will be depending on them. Consumer confidence would likely correlate directly with these key points, and so it may be seen that the simple change of introducing an express law can impact the entire sector as a whole. The bill is relatively new at this stage though, and so more time will be required before the true extent of people's opinions will become clear, though it is looking promising.

The Impact

In many ways, the changes are an overhaul of the previously used methods, and there are new regulations and requirements which require observation. A briefly mentioned yet potentially impactful section of the law is the fact that there are now definitions for many phrases. Descriptions are supplied in most legislation and allow for clarity not only when reading through it, but also it gives parties with details of the law even when they are not going through any legal disputes, and can help to avoid any conflicts from arising.

One of the significant changes concerned licensing of entities that partake in real estate related practices. Before the laws arrival, a license was not a necessity, though it is now a requirement, with specific repercussions in place for those found to be in violation. Article 5 (1) states that it shall not be permissible for any developer, realtor, realtor's employee, auctioneer or director of Owners Union, evaluator or surveyor or one who identifies in such a capacity, to practice these professions without first obtaining a license. Article 5 (5) also states that these permits will require renewal annually.

A register will also arise as stated in Article 4. The record aims to gather all of the information, data, and documents related to:

  1. The Licensees;
  2. Account trustees and agreements of project's guarantee account;
  3. Permissions of real estate development project marketing; and
  4. Any other data or documents deemed necessary by the Department shall also become a requirement.

There are many further points discussed throughout the legislation. However, a significant point which brought up later and which shall now be looked at more closely is the matter of mortgage insurance.

Abu Dhabi Summary Court Decision Number 288 of 2017

Mortgage insurance is also defined and mentioned in Article 1, and the definition is as follows:

"A contract by which the creditor acquires a real right or contractual utility on the mortgaged property allocated for the repayment of the debt and by such right or utility such creditor may have precedence over ordinary creditors or other creditors following him in rank."

The Abu Dhabi Summary Court Decision Number 288 of 2017 was the first case in which the Civil Code was brought up. In this case, the claimant was a bank, and they filed the claim against two clients. These clients had taken mortgages and purchased properties, though they were unable to make a payment, and as such, the bank was requesting from the court to be able to sell the properties to reclaim the money lost by them.

The simple legal point that was used to back up this claim was Articles 53 (1) and (2) which states the following:

  1. The mortgagee of mortgage insurance or his designated or non-designated successor may proceed with the execution procedures on the mortgaged property and sell said property by auction if the debt is unpaid upon maturity or any conditions requiring the expiry of the term before maturity materialized;
  2. Before commencement of the execution procedures on the mortgaged property and applying to the judge of summary justice for the seizure on mortgaged property and sale thereof by auction, the mortgagee shall send a written warning to the mortgagor and the guarantor, if any, by registered mail. Within this should be contained the acknowledgment of receipt informing him of the prejudice and requiring him to pay the debt and other entitlements within no less than 30 days as of the date of warning.

Section 1 of this Article states when cases may arise, and it would seem a highly logical approach. However, Section 2 ensures that the mortgagee's treatment is fair. Property purchase is a big deal, and there can be a lot riding on it, and so an opportunity is given to the party to attempt to get their situation in check or provide an explanation of what the issue is.

What this allows for is a fair system and fair judgments and case outcomes to be the norm in failure to pay situations, as there are often two sides to every story.

Article 54 of the law concerns resolving cases concerning failing mortgage payments. This Article states that:

"Subject to the provisions of Clause 2 of the preceding Article of this Law (Article 53), if the mortgagor or the guarantor thereof or their designated or non-designated successor defaulted in payment of debt. The judge of summary justice should issue, upon the request of the mortgagee, a resolution on the sale of the property in mortgage by auction by the procedures applicable to the competent court".

What this Article shows is that there is a level of variance that may be possible within the law, and this is up to the discretion of the Judge in the case. One of the ways a Judge may change Article 53 (2) is by allowing for 60 days rather than 30 to let the mortgagee make the payments.

Is this Law Bettering the System?

The changes the law has made and the regulations it has now set in stone are mostly positive. They will allow for not only professionals in the real estate sector but also regular people looking to obtain mortgages, to have confidence in the legal implications of this activity.

Wish to learn more about Abu Dhabi Property Laws? Click here to read our bespoke Abu Dhabi Real Estate Guide presented by our team of lawyers in Abu Dhabi.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions