Do mortgages in Dubai automatically include any buildings or attachments on the property?
In Dubai, when you secure a mortgage on a property, it generally includes both the land and any buildings or attachments on that land. This is because the mortgage is tied to the property as a whole, encompassing the land, structures, and any permanent attachments that are part of the property at the time the mortgage is taken out.
Key Points:
Inclusive of Structures:
Mortgage Coverage: When a property is mortgaged in Dubai, the financing typically covers the entire property, including all buildings, fixtures, and any other permanent attachments. This ensures that the lender has a secure interest in the property as a whole.
Legal Framework: The mortgage agreement will clearly define what is included, and in most cases, it includes both the land and all permanent structures. This is in line with the UAE’s property laws, where the mortgage extends to everything that forms part of the real estate.
Additional Attachments:
Future Additions: If the property owner adds new buildings or attachments after the mortgage is issued, these may also be included under the mortgage, depending on the terms of the agreement. However, it’s crucial to notify the lender of any significant changes to the property.
Registration and Legal Documentation:
Land Department Registration: The mortgage must be registered with the Dubai Land Department (DLD), and the registration typically details all elements covered by the mortgage, including the land, buildings, and any attachments.
Mortgage Agreement: The mortgage contract between the lender and the borrower will specify what is included. This document is critical in determining the extent of the lender’s security interest in the property.
Data and Compliance:
Market Practices: Most financial institutions in Dubai follow this practice to ensure their investment is fully secured. According to the DLD, the inclusion of buildings and attachments under a mortgage is standard practice in the real estate market.
Supporting Data:
Dubai Land Department (DLD): The DLD’s official guidelines and regulations ensure that mortgages cover the entire property, including land and any existing or future buildings.
UAE Central Bank: The UAE Central Bank regulations on property financing require that mortgages are comprehensive, covering all aspects of the property to safeguard the lender’s interest.
This comprehensive coverage under a mortgage provides security to both the lender and the borrower, ensuring that the property’s full value is accounted for in the financing agreement.
