Article 2 of the Saudi Registered Real Estate Mortgage Law
المادة 2 من نظام الرهن العقاري المسجل
The Article requires the mortgagor to own the property and have capacity to dispose of it, and permits the mortgagor to be the debtor or a real surety who mortgages his property for the debtor's benefit.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يجب أن يكون الراهن مالكاً للعقار المرهون، وأهلاً للتصرف فيه.
2- يجوز أن يكون الراهن المدين نفسه، أو كفيلاً عينيًّا يقدّم عقارًا يرهنه لمصلحة المدين ولو بغير إذنه.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 2 explained in plain English
This Article sets who is entitled to mortgage a property. The first condition is that the mortgagor be the owner of the mortgaged property, and the second is that he have capacity to dispose of it. It is not enough for a person to be an owner if he does not have the capacity that allows him to dispose of his property.
The second paragraph then explains that the mortgagor may be one of two persons:
- The debtor himself: the usual situation, where the borrower mortgages his property to secure his debt.
- A real surety: a person other than the debtor who offers a property he owns and mortgages it for the debtor's benefit, and this is permitted even without the debtor's permission.
The third Article complements this provision, dealing with the situation of a mortgagor who is not the owner, and making his mortgage suspended pending a documented ratification by the owner. The first Article defines the registered real estate mortgage and how it is registered.
Anyone who wants to mortgage their property to secure the debt of a relative or partner should assess the effect of that on their ownership, and may consult a lawyer specialized in real estate and real estate finance matters.
Practical example
Khaled needs financing for his project in Riyadh and owns no property, so his father offers to mortgage his land registered in his name to secure Khaled's debt. The father here is a real surety, and his mortgage is valid because he is the owner of the land and has capacity to dispose of it.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentBanking, Finance & Securities lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Banking, Finance & Securities lawyers
Lawyers who handle this kind of case
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Dr. Saleh Altayyar & Partners Law Firm
Frequently asked questions about Article 2 of the Saudi Registered Real Estate Mortgage Law
Must the mortgagor be the debtor?
No. The mortgagor may be the debtor himself, or a real surety who offers a property he mortgages for the debtor's benefit.
Does a real surety need the debtor's permission to mortgage his property?
No. The Article provides that a real surety may mortgage his property for the debtor's benefit even without his permission.
What are the conditions for the mortgagor in a registered real estate mortgage?
The mortgagor must be the owner of the mortgaged property and have capacity to dispose of it.
More articles on Mortgagor and Mortgaged Property Conditions
- Article 3
The Article makes a non-owner's mortgage suspended pending a documented ratification by the owner, with the mortgage starting from that date; absent ratification, it takes effect only once the mortgagor acquires the property.
إذا كان الراهن غير مالك للعقار المرهون، كان رهنه موقوفًا على إجازة موثقة من المالك، ويبدأ الرهن من تاريخ الإجازة. فإذا لم تصدر هذه الإجازة، فإن حق الرهن لا يترت
- Article 4
The Article requires the mortgaged property to be specific, existing or likely to exist, known and stated in the contract and saleable at auction, and permits mortgaging the property's usufruct separately from the property.
1 - يجب أن يكون العقار المرهون معينًا موجودًا، أو محتمل الوجود مما يصح بيعه. 2 - يجب أن يكون العقار المرهون معلومًا علمًا نافيًا للجهالة مبيّنًا في عقد الرهن نف
- Article 5
The Article provides that the mortgage covers the mortgaged property's appurtenances, namely buildings, plantings, what is prepared to serve it and what is added after the contract, unless otherwise agreed and without prejudice to third parties' rights.
يشمل الرهن ملحقات العقار المرهون من أبنية، وغراس، وما أعد لخدمته، وما يستحدث عليه من إنشاءات أو تحسينات بعد العقد، ما لم يتفق على غير ذلك، دون إخلال بحقوق الغير
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.