Shaikh Mohammad Bin Rashid Al Maktoum, UAE Vice President and Prime Minister of the UAE and Ruler of Dubai, has issued a new mortgage law to regulate the country’s real estate sector, said the chief executive of the Real Estate Regulatory Authority.
The new law regulates the mortgage process in an effort to protect the rights of lenders and borrowers and improve transparency, Marwan Ahmed bin Ghalita said on Tuesday.
The law, which comes into effect 60 days after its publication in the official gazette, stipulates that mortgage contracts be registered with the land department, specifying the size of the loan, the repayment period and the value of the property to which the loan is linked.
"The new law is basically covering the mortgage procedures in Dubai...All property purchases happening offplan for example and all financing must be registered at the land department," Ghalita said.
The law requires that mortgages taken out on properties in Dubai be sold by registered financial institutions, and be insured.
The law also requires borrower and lender to present full financial documents when the mortgage is registered. Property granted by the government to nationals is exempt.
"It gives more confidence to the lender and gives more security for banks," Ghalita said, adding that the land department and banks were now working together to calculate mortgage rates independently from the central bank.
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