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Dubai ruler issues decree on mortgaging granted lands in the emirate

Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum issued Decree No (31) of 2016 on mortgaging granted lands in the emirate.

The Decree defines the granted lands as the lands owned by the government and granted to the beneficiary for residential, commercial or industrial purposes.

The Decree states that the beneficiary may mortgage the land to any bank or financial institution registered duly in Dubai.

The mortgage is legally binding for all concerned parties if the monies arising from the pledge of the commercial and industrial land will be invested to achieve the purposes of the original grant; if the monies arising from the pledge of the residential land will be invested in maintaining, expanding or replacing the building and the pledge is registered duly as per Law No (14) of 2008 Concerning Mortgages in the Emirate of Dubai.

According to the Decree, the Dubai Land Department will not register any mortgage unless all these conditions are satisfied.

Director General of the Dubai Land Department Sultan Butti bin Mejren said that the Decree is a key legislative initiative that will have a positive impact on the real estate market.


He further said it will help developers and owners obtain financing from trusted financial institutions and promote the growth of investments in the real estate sector. Bin Mejren also said that the Decree addresses many questions of
investors and responds to their needs. It also gives the Dubai Land Department further mechanisms to regulate the real estate market.

Regarding the lands granted to entities owned by the government, the Decree states that if the Government or the Government’s subsidiaries own over 50% of the entity’s capital, then the land may be mortgaged unconditionally. The lands granted to real estate developers are considered freehold and may be mortgaged unconditionally and with discretion.

The Decree also permits mortgaging against the commercial or industrial property’s income, and the mortgagee may manage the property and receive its income until the mortgage is satisfied. The Decree also states that the Civil Court is the entity responsible for settling any disputes arising from the mortgage, and the granted residential land may not be sold if the mortgagor defaults unless approval from the Board of the Mohammed Bin Rashid Housing Establishment is obtained.

All mortgages registered duly with the Dubai Land Department prior to the activation date of this Decree remain valid.




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