Article 28 of the Saudi Registered Real Estate Mortgage Law
المادة 28 من نظام الرهن العقاري المسجل
The article lets the mortgagee begin compulsory expropriation and sale of the mortgaged property if the debtor does not pay by the agreed time, after notifying the debtor and the possessor in accordance with the Enforcement Law.
Official text (Arabic)
This article has not been amended since the law was issued.
للمرتهن أن يتخذ إجراءات النزع الجبري لملكية العقار المرهون وبيعه إذا لم يقم المدين بالوفاء في الأجل المعين، وذلك بعد إنذار المدين وحائز العقار المرهون وفقًا لنظام التنفيذ.
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 28 explained in plain English
This article sets out the mortgagee's route to recover its right when the debtor defaults, which is compulsory expropriation and sale of the mortgaged property. The article sets conditions for this right:
- Non-payment by the agreed time: compulsory expropriation is resorted to only if the debtor did not pay on time.
- Prior notice: the debtor and the possessor of the mortgaged property must be notified before the proceedings are taken.
- In accordance with the Enforcement Law: the proceedings follow the Enforcement Law, and this article does not detail their steps or periods.
Note that the article requires notice to the possessor as well, not the debtor alone, because the property may have passed into someone else's hands. A possessor, as Article 27 defines, is anyone to whom, after the mortgage, ownership of the property or another mortgageable right in rem in it has passed, without personal liability for the debt.
This article is connected to Article 29, which allows the possessor, after being notified, to pay the mortgage debt and expenses and then have recourse against the debtor, and to step into the place of the creditor who has been paid in respect of the creditor's rights.
Anyone who has received a notice of enforcement against a mortgaged property, whether as debtor or possessor, should consult a lawyer specializing in enforcement and real estate mortgage cases.
Practical example
The owner of a building in Riyadh defaulted on financing secured by a mortgage on it, and had sold one of its apartments to a buyer after the mortgage. Before beginning compulsory expropriation and sale proceedings, the financing provider must notify the debtor owner and also the buyer as a possessor, in accordance with the Enforcement Law.
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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Lawyers who handle this kind of case
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Mohammed bin Saleh Al-Qarawi Law and Notary Office, Riyadh
Frequently asked questions about Article 28 of the Saudi Registered Real Estate Mortgage Law
When may the mortgagee force the sale of the mortgaged property?
If the debtor does not pay by the agreed time, and after notifying the debtor and the possessor of the mortgaged property in accordance with the Enforcement Law.
Must someone who bought the mortgaged property be notified before enforcement?
Yes. The article provides for notifying the debtor and the possessor of the mortgaged property.
Under which law are the compulsory expropriation proceedings carried out?
The Enforcement Law.
More articles on Enforcing Against the Mortgaged Property
- Article 15
The article limits enforcement against a real surety, who is not the debtor, to the mortgaged property alone, and lets the owner claim against the debtor after the property is sold but not before enforcement against it.
1 - إذا كان الراهن كفيلاً عينيًّا، فلا يجوز التنفيذ على ما سوى العقار المرهون من أموال مالكه غير المدين. 2 - إذا بيع العقار المرهون المكفول به عينيًّا، فلمالكه
- Article 18
The article requires the debt to be paid when it falls due. If the debtor pays, the debtor takes back the property; if not, it is sold at the mortgagee's request and the mortgagee takes priority by rank, then shares in the debtor's other assets for any balance.
إذا حل أجل الدين وجب أداؤه، فإذا أداه المدين أخذ عقاره المرهون، وإن لم يؤدّه بيع العقار المرهون بطلب المرتهن، ويقدّم على جميع الغرماء في استيفاء دينه من ثمنه وف
- Article 31
The article refers the procedures for compulsory expropriation and sale of the mortgaged property, when the debt is not paid, to the Enforcement Law.
تتم إجراءات النزع الجبري لملكية العقار المرهون وبيعه عند عدم الوفاء بالدين وفقًا لنظام التنفيذ.
- Article 32
The article lets the possessor of a mortgaged property enter its auction; if the possessor wins and pays the price, the possessor is regarded as owner under the original ownership document, and the property is cleared of every registered right.
يجوز لحائز العقار المرهون أن يدخل في إجراءات بيعه في المزاد، فإذا رسا المزاد عليه وأدى الثمن، عُدَّ مالكًا للعقار بمقتضى وثيقة ملكيته الأصلية، ويتطهر العقار الم
- Article 33
If the auction of a mortgaged property is awarded to someone other than its possessor, that person acquires ownership under the decision awarding the auction and receives the right from the possessor, whether or not the possessor entered the auction.
إذا رسا مزاد بيع العقار المرهون على غير حائزه، فإنه يكسب ملكيته بمقتضى قرار رسوّ المزاد عليه، ويتلقى حقه من الحائز، سواء أدخل الحائز في المزاد أم لم يدخل.
- Article 34
If the price of the mortgaged property exceeds the value of the registered debts, the excess belongs to the owner.
إذا زاد ثمن العقار المرهون على قيمة الديون المسجلة، كانت الزيادة للمالك.
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.