Mortgage, Mortgage Release, and Correction
What is a Mortgage?
A mortgage is a legal agreement in which a property is pledged as collateral to obtain financing or a loan. The property remains mortgaged until the debt is fully repaid. This system is one of the most important financial tools in Saudi Arabia and is regulated by the Saudi Central Bank (SAMA) and the Real Estate Finance Law.
Steps of the Mortgage Process in Saudi Arabia:
- The property owner (mortgagor) offers the property as collateral to obtain a loan.
- The property remains registered in the owner’s name, but the mortgagee (lender) has the right to act in case of non-payment.
- Upon full repayment of the loan, the mortgage is released, and full ownership is restored.
Types of Mortgages in Saudi Arabia:
-
Traditional Mortgage: The property is mortgaged in exchange for a specific loan.
- Islamic Mortgage (Tawarruq or Ijara with Ownership Transfer): Conducted according to Sharia regulations.
- Commercial Mortgage: Used by companies to finance real estate projects.
Mortgage Release in Saudi Arabia:
The mortgage is released once the debt is fully repaid, following these procedures:
- Ensuring the full repayment of the outstanding amount to the bank or lender.
- Requesting a mortgage release letter from the lender.
- Submitting a request to the Notary Public or through the Najiz platform to lift the mortgage restriction from the property deed.
- Issuing a new property deed without mortgage restrictions.
Note: If the loan is not repaid, the bank or lender has the legal right to sell the property and recover its dues.
Mortgage Correction:
Legal or financial errors may occur during mortgage registration, requiring correction to ensure compliance with regulations. This is achieved through:
- Reviewing signed contracts to ensure they comply with Saudi regulations.
- Correcting errors in mortgage records with official entities such as the Ministry of Justice.
- Restructuring the mortgage loan to align with the borrower’s financial capacity.
- Challenging unfair mortgage terms before the relevant authorities.
DAG Law Firm and Legal Consultancy Services for Mortgages:
We provide legal support at every stage of the mortgage process, including release and correction!
- Legal consultation on the mortgage system in Saudi Arabia.
- Reviewing and documenting mortgage contracts to ensure compliance with regulations.
- Facilitating mortgage release procedures through official authorities and the Najiz platform.
- Legal representation for clients in mortgage-related disputes.
- Correcting mortgage registration errors and providing appropriate legal solutions.
Do You Have Questions About Mortgages?
Contact us at DAG Law Firm and Legal Consultancy to safeguard your real estate rights with the best legal solutions in Saudi Arabia!
