Article 23 of the Saudi Registered Real Estate Mortgage Law
المادة 23 من نظام الرهن العقاري المسجل
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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.
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 23 explained in plain English
This article deals with two dealings the mortgagee may carry out regarding its right:
- Transferring the debt secured by the registered mortgage to another person.
- Waiving the rank of the mortgage.
The rule is that these two dealings may not be invoked against non-parties until after they are recorded in the original mortgage document and in the property record. That is, a dealing may stand between its parties, but others cannot be confronted with it unless it is recorded in both places together.
The purpose of this requirement is that the property record and the mortgage document reflect the true position of rights, so that everyone dealing with the property knows who owns the debt and who holds each rank.
This article is connected to Article 24, which permits the mortgage of a registered property to a number of mortgagees in succession, fixes rank by registration number and date, and preserves rank until something showing its extinction is recorded with the authority competent to register. It is also connected to Article 22, which confines the effect of the mortgage to the debt specified in the mortgage document.
Anyone to whom a mortgage-secured debt has been transferred, or who has obtained a waiver of rank, should make sure it is recorded in the document and the record, and may consult a lawyer specializing in real estate and real estate finance cases.
Practical example
A financing provider waived the rank of its mortgage on land in Jeddah in favor of a second mortgagee on the same land, without recording the waiver in the original mortgage document and the property record. The waiver cannot be invoked against non-parties until it is recorded.
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 23 of the Saudi Registered Real Estate Mortgage Law
Must the transfer of a mortgage-secured debt be recorded?
The transfer of a debt secured by a registered mortgage cannot be invoked against non-parties until it is recorded in the original mortgage document and the property record.
Can a waiver of mortgage rank be invoked without recording it?
It cannot be invoked against non-parties until it is recorded in the original mortgage document and the property record.
More articles on Mortgage Rank and Multiple Mortgagees
- Article 21
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.
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.
- 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.