Article 21 of the Saudi Registered Real Estate Mortgage Law
المادة 21 من نظام الرهن العقاري المسجل
The article provides that the effect of a registered mortgage applies against third parties from the date of its registration, unless the third party acquired a right in rem on the property before the mortgage was registered.
Official text (Arabic)
This article has not been amended since the law was issued.
يسري أثر الرهن المسجل في مواجهة الغير من تاريخ تسجيله، ما لم يكن هذا الغير قد اكتسب حقًا عينيًّا على العقار المرهون قبل تسجيل الرهن.
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 21 explained in plain English
This article determines the moment from which the mortgage begins to affect others, that is, those who are not parties to the contract, such as buyers or other creditors. The rule is that the effect of a registered mortgage applies against third parties from the date of its registration, not from the date the contract was signed.
There is an exception to this rule: if the third party had acquired a right in rem on the mortgaged property before the mortgage was registered, the mortgage does not apply against that party. Priority in acquiring the right in rem protects its holder from a mortgage registered afterward.
The practical consequences:
- The mortgagee should move to register the mortgage, because delay may allow third-party rights to arise ahead of its mortgage.
- The mortgage is effective against anyone who acquires a right in rem on the property after the mortgage is registered.
This article is connected to Article 20, which addresses the enforceability of leases against the mortgagee depending on the date of their registration and obliges the mortgagor to disclose rights in rem on property not registered under the registration law. It is also connected to Article 22, which confines the effect of the mortgage to the debt specified in the mortgage document.
Anyone buying a property or accepting it as security should check the rights registered on it and their dates, and may consult a lawyer specializing in real estate and real estate finance cases.
Practical example
Faisal signed a mortgage contract on his land in Al-Kharj in favor of a financing provider, and before the mortgage was registered another person had acquired a right in rem on the land. The mortgage does not apply against that person, but it does apply against anyone who acquires a right in the land after the mortgage is registered.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 21 of the Saudi Registered Real Estate Mortgage Law
From when does a real estate mortgage apply against others?
The effect of a registered mortgage applies against third parties from the date of its registration.
Is the holder of an earlier right on the property affected by a later mortgage?
The mortgage does not apply against anyone who acquired a right in rem on the mortgaged property before the mortgage was registered.
More articles on Mortgage Rank and Multiple Mortgagees
- Article 23
The article provides that transferring a debt secured by a registered mortgage, or waiving its rank, can be invoked against non-parties only after being recorded in the original mortgage document and the property record.
لا يحتج في مواجهة غير المتعاقدين بنقل الدين المضمون بالرهن المسجل، أو التنازل عن مرتبته إلا بعد قيد ذلك في وثيقة الرهن الأصلي وسجل العقار.
- Article 24
The article permits a registered property to be mortgaged to several mortgagees in succession, fixes rank by registration number and date until its extinction is recorded, and pays their rights from the price according to rank.
يجوز رهن العقار المسجل لعدد من المرتهنين بالتتابع، وتحدد مرتبة الرهن برقم قيده وتاريخ تسجيله، ويحتفظ بمرتبته حتى يقيد ما يدل على انقضائه في الجهة المختصة نظامًا
- Article 25
The article lets a mortgagee waive the rank of its mortgage, to the extent of its debt, in favor of another mortgagee on the same property, under the rules on assignment of rights.
يجوز للدائن المرتهن أن يتنازل عن مرتبة رهنه بمقدار دينه لدائن مرتهن آخر على العقار المرهون وفقًا للأحكام المقررة في حوالة الحق.
- Article 39
A registered mortgage is extinguished by a compulsory sale of the mortgaged property under the law and payment of the price to the mortgagee creditors according to their ranks, or its deposit in a bank account of the court.
ينقضي الرهن المسجل ببيع العـقار المرهون بيعًا جبريًا وفقًا للنظام، ودفع ثمنه إلى الدائنين المرتهنين وفقًا لمرتبة كل منهم، أو إيداعه في حساب بنكي للمحكمة.
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.