Article 1 of the Saudi Registered Real Estate Mortgage Law

This Article lays the foundation on which the whole Law rests, defining the registered real estate mortgage as a contract registered under the provisions of the Law, by which the mortgagee (the creditor) acquires an in rem right over a specific property that has a register. An in rem right means a right attached to the property itself, so the creditor can rank ahead of all creditors in collecting his debt from the price of that property, in whatever hands the property is.

The Article distinguishes between two cases in the method of registration:

• If the property is registered under the real estate in rem registration system, the mortgage is registered according to the provisions of that system.
• If the in rem registration system has not been applied to the property, the mortgage is registered by annotating the property's register at the competent court or notary public.

The third paragraph provides that the mortgage takes effect against third parties only by being registered in one of the two ways above; an unregistered mortgage cannot be invoked against anyone but its two parties. It also makes the mortgagor bear the costs of the mortgage contract and registration; if someone other than the mortgagor pays them, these costs become part of the mortgage debt and take its rank, unless the parties agree otherwise.

This Article is linked to the second Article, which requires that the mortgagor be the owner of the property and have capacity to dispose of it. Anyone with a specific question about registering a mortgage or its costs would do best to consult a lawyer specialized in real estate and real estate finance matters.