Decree No. (31) of 2016
Concerning the
Mortgage of Granted Land in the Emirate of Dubai
We, Mohammed bin Rashid Al Maktoum, Ruler of Dubai,
After perusal of:
Law No. (7) of 2006 Concerning Real Property Registration in the Emirate of Dubai;
Law No. (14) of 2008 Concerning Mortgage in the Emirate of Dubai;
Law No. (4) of 2011 Establishing the Mohammed bin Rashid Housing Establishment and its
Implementing Bylaw;
Law No. (7) of 2013 Concerning the Land Department;
Decree No. (4) of 2010 Regulating the Transfer of Title to Granted Industrial and Commercial
Land in the Emirate of Dubai;
The Order Issued on 14 May 1996 Authorising the Mortgage of Land Granted by the
Government of Dubai for Which Title Deeds Are Issued by the Land Department;
The Instructions Issued on 20 September 1994 Concerning Land Granted by the Government
to UAE Nationals in the Emirate of Dubai; and
The Instructions Issued on 5 June 1996 Concerning the Implementation of the Order Issued
on 14 May 1996 Concerning the Mortgage of Granted Land,
Do hereby issue this Decree.

Definitions

Article (1)
The following words and expressions, wherever mentioned in this Decree, shall have the
meaning indicated opposite each of them unless the context implies otherwise:
Emirate: The Emirate of Dubai.
Government : The Government of Dubai.
DLD : The Land Department.
MRHE : The Mohammed bin Rashid Housing Establishment.
Board of Directors : The board of directors of the MRHE.
Director General : The director general of the DLD.
Beneficiary : A natural or legal person who has a usufruct right to Granted
Land.
Granted Residential Land : A land plot owned by the Government and granted to a
Beneficiary for residential use.
Granted Commercial or Industrial Land : A land plot owned by the Government and
granted to a Beneficiary for commercial or
industrial use.
Granted Land : Granted Residential Land, Granted
Commercial or Industrial Land, or any other
land granted by the Government.
Mortgaged Land : Granted Land mortgaged together with any
buildings or structures thereon.
Mortgagor : A Beneficiary who has a usufruct right to
Granted Land.
Mortgagee : A creditor who lends money to a Mortgagor
against Granted Land provided as collateral.
Competent Entity : The competent entity in the Emirate in
charge of licensing the construction of
buildings and other structures.

Mortgage Authorisation and Conditions

Article (2)
a. A Beneficiary is authorised to mortgage Granted Land in favour of any of the banks or
financing institutions licensed to operate in the Emirate. This mortgage shall be legally
valid and binding on both parties.
b. For the mortgage referred to in paragraph (a) of this Article to be valid and legally
effective, the following conditions must be met:
1. the purpose of mortgaging the Granted Commercial or Industrial Land must be to
invest the loan in exploiting the land for the purpose for which it is granted;
2. the purpose of mortgaging the Granted Residential Land must be to invest the loan in
the maintenance, expansion, construction, or reconstruction of an existing building;
3. the mortgage must be registered in accordance with the rules and procedures
stipulated in the above-mentioned Law No. (14) of 2008; and
4. any other conditions prescribed, in coordination with the MRHE, by the DLD pursuant
to a resolution issued by the Director General in this regard.

Registration of Mortgages

Article (3)
a. The DLD may not register any mortgage that does not meet the conditions stipulated
in paragraph (b) of Article (2) of this Decree.
b. When registering the mortgage of Granted Land, the DLD must ensure that the
mortgage agreement:
1. stipulates that the loan be used to achieve the purpose for which the land is
granted;
2. is accompanied by a building permit submitted by the Mortgagor which is issued
by the Competent Entity; and
3. is accompanied by any other documents or information the DLD may require the
Mortgagor to submit to verify the authenticity of the information included in the
mortgage agreement and to ensure the implementation of such agreement.
Land Granted to Entities Affiliated to the
Government and Real Property Developers

Article (4)
a. The land granted to entities affiliated to the Government, or to companies in which
the Government or its affiliated entities hold at least fifty percent (50%) of the capital,
may be mortgaged without any conditions or limitations.
b. The land granted to Real Property developers for the purpose of Real Property
development is granted on a freehold basis and may be mortgaged or disposed of in
any manner whatsoever without any conditions or limitations.
Pledging the Income of Real Property Constructed on
Granted Commercial or Industrial Land

Article (5)
a. Notwithstanding the provisions of Article (2) and Article (4) of this Decree, the income
of the Real Property constructed on Granted Commercial or Industrial Land may be
pledged, exclusive of the land, in favour of any of the banks or financing institutions
licensed to operate in the Emirate. In this case, the pledgee shall manage the Real
Property and collect its income until repayment of the loan, or as agreed by both
parties.
b. For the purpose of implementing the provisions of paragraph (a) of this Article, the DLD
shall create an entry on the registry folio of the Granted Commercial or Industrial Land
to denote that the income of the Real Property constructed on that land is pledged in
favour of the pledgee.
Procedures for Foreclosure on Mortgaged Land

Article (6)
Where a Mortgagor or his successor fails to perform his obligations under the mortgage
agreement, the Mortgagee or his successor may initiate foreclosure proceedings on the
Mortgaged Land and the sale of the same at public auction under the supervision of the
DLD and in accordance with its adopted procedures, provided that the Mortgagor or his
successor is served a notice, through the notary public, at least thirty (30) days before the
commencement of foreclosure proceedings, to perform his obligations.
Hearing Claims Relating to Mortgaged Land

Article (7)
a. Courts shall hear any applications or claims relating to the mortgage of Granted Land.
b. Where a Mortgagor or his successor defaults on repayment of his debt within the
grace period prescribed in Article (6) hereof, the execution judge shall issue, upon the
Mortgagee’s request, a foreclosure order in respect of the mortgaged Real Property in
order to sell the same at public auction in accordance with the relevant procedures
adopted by the DLD.

Payment of Mortgaged Land Foreclosure Proceeds
Article (8)

a. Without prejudice to the rights of the MRHE as a preferential creditor, the Mortgagor’s
debts shall be paid from the proceeds of the foreclosure sale of the Mortgaged Land
after deducting the following amounts:
1. court fees and costs;
2. the fees and costs of the sale of the Mortgaged Land at public auction and fees and
costs for the registration of the sale with the DLD; and
3. the fees payable in accordance with the above-mentioned Law No. (4) of 2010 for
the transfer of title to industrial and commercial land, where these fees have not
been paid upon the registration of the mortgage.
b. The balance of the price of sale of Granted Commercial or Industrial Land at public
auction, if any, shall be paid to the Mortgagor.
c. The balance of the price of sale of Granted Residential Land at public auction, if any,
shall be paid towards the purchase of a house that shall be registered as a grant in the
name of the Beneficiary or towards providing him with any other Housing Services as
the MRHE deems appropriate. However, if the remaining amount is not sufficient to
purchase a house, that amount shall be paid to the Mortgagor.

Sale of Granted Residential Land

Article (9)
Notwithstanding the provisions of Article (6) hereof and where a Mortgagor or his
successor defaults on repayment of his debts, Granted Residential Land may not be sold
without first obtaining the approval of the Board of Directors. This approval shall be
granted in accordance with the relevant rules and conditions adopted by the Board of
Directors.

Mortgage Validity

Article (10)
All mortgages registered with the DLD on the land granted by the effective date of this
Decree are hereby deemed valid and effective.

Invalidity of Violating Dispositions

Article (11)
Any disposition or agreement concluded in breach of the provisions of this Decree shall be
null and void, shall have no legal effect, and may not be registered with the DLD.

Issuing Implementing Resolutions

Article (12)
The Director General shall issue the resolutions required for the implementation of the
provisions of this Decree.

Repeals

Article (13)
The above-mentioned Order issued on 14 May 1996 and the instructions issued in
implementation thereof on 5 June 1996 are hereby repealed. Any provision in any other
legislation shall also be repealed to the extent that it contradicts the provisions of this
Decree.

Commencement and Publication

Article (14)
This Decree comes into force on the day on which it is issued, and shall be published in
the Official Gazette.

Mohammed bin Rashid Al Maktoum
Ruler of Dubai
Issued in Dubai on 1 November 2016
Corresponding to 1 Safar 1438 A