Dubai issues mortgage law to regulate real estate sector
20/8/2008 17:48
The government of Dubai, the commercial and financial hub of the United
Arab Emirates (UAE), has issued a mortgage law as part of efforts to regulate
the emirate's booming real estate sector, local newspaper Khaleej Times reported
today.
The 35-article law regulates the mortgage process in an effort to
protect the rights of lenders and borrowers and improve transparency, according
to Marwan Ahmed bin Ghalita, chief executive of Dubai's Real Estate Regulatory
Authority.
The law, which will come into effect 60 days after its
publication, "is basically covering the mortgage procedures in Dubai," Ghalita
said.
According to the law, mortgage contracts should be registered with the
Land Department of Dubai, specifying the size of the loan, the repayment period
and the value of the property to which the loan is linked.
It also requires
that mortgages taken out on properties in Dubai should be sold by registered
financial institutions, and should be insured.
In addition, the law requires
borrower and lender to present full financial documents when the mortgage is
registered.
"It gives more confidence to the lender and gives more security
for banks," Ghalita said.
Dubai's property boom began in 2002, when it
allowed foreign investors to buy property on a freehold basis.
The emirate's
mortgage business has burgeoned since then, with home loans in the UAE jumping
55 percent in the year to March, according to the UAE Central Bank.
Standard
Chartered warned in July that Dubai's property market showed signs of
overheating as speculators betting on quick gains inflate prices of real estate
still under construction.
Xinhua
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