Article 29 of the Saudi Registered Real Estate Mortgage Law
المادة 29 من نظام الرهن العقاري المسجل
The article lets the possessor of a mortgaged property, after being notified, pay the mortgage debt and expenses and then have recourse against the debtor, stepping into the creditor's rights.
Official text (Arabic)
This article has not been amended since the law was issued.
لحائز العقار المرهون أن يؤدي دين الرهن والنفقات بعد إنذاره، على أن يرجع بما أداه على المدين، وله أن يحلّ محل الدائن الذي استوفى دينه فيما له من حقوق.
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 29 explained in plain English
This article gives the possessor of a mortgaged property a way to protect themselves from losing the property they hold.
The possessor may, after being notified, pay the mortgage debt and the expenses. Two rights follow for the possessor from this payment:
- Recourse against the debtor for what the possessor paid, since the debt is originally the debtor's, not the possessor's.
- Stepping into the place of the creditor who has been paid, in respect of the rights that creditor had.
Note that the article ties this right to the notice, which is the notice referred to in Article 28 when it requires notifying the debtor and the possessor of the mortgaged property before compulsory expropriation proceedings are taken in accordance with the Enforcement Law. The payment also covers the debt and the expenses together.
Article 30 gives the possessor another option, clearing the property of every registered mortgage, a right that remains until the property is sold, and the possessor may have recourse against the debtor for what was paid.
Anyone who finds themselves the possessor of a mortgaged property and has received a notice, and is weighing paying against letting enforcement proceed, should consult a lawyer specializing in real estate and real estate finance cases.
Practical example
A company in Riyadh bought a warehouse that turned out to be mortgaged for a debt of the seller, and then received a notice from the mortgagee. The company paid the mortgage debt and the expenses in order to keep the warehouse, and it may then have recourse against the seller as debtor for what it paid, and step into the creditor's place in respect of the creditor's rights.
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 29 of the Saudi Registered Real Estate Mortgage Law
Can the buyer of a mortgaged property pay the debt to protect the property?
Yes. The possessor of a mortgaged property may pay the mortgage debt and expenses after being notified.
Does the possessor get back what was paid?
The possessor has recourse against the debtor for what was paid, and may step into the place of the creditor who has been paid in respect of the creditor's rights.
More articles on Possessor of the Mortgaged Property and Clearing
- Article 26
The article gives the mortgagee the right to follow the mortgaged property into the hands of any possessor, to recover its right from it when payment falls due, according to its rank.
للمرتهن حق تتبع العقار المرهون في يد أي حائز له لاستيفاء حقه منه عند حلول الوفاء به وفقًا لمرتبته.
- Article 27
The article defines the possessor of a mortgaged property as anyone to whom, after the mortgage, ownership or another mortgageable right in rem in the property has passed, without personal liability for the secured debt.
يعد حائزًا للعقار المرهون كل من انتقلت إليه بعد الرهن - بأي سبب من الأسباب - ملكية هذا العقار، أو أي حق عينيٍّ آخر عليه قابل للرهن دون أن يكون مسؤولاً مسؤولية ش
- Article 30
The article gives the possessor of a mortgaged property the right to clear it of every registered mortgage, which remains until the property is sold, and to have recourse against the debtor for what was paid.
1 - لحائز العقار المرهون حق تطهيره من كل رهن مسجل. 2 - يكون هذا الحق قائمًا للحائز حتى إجراء بيع العقار المرهون، وله أن يعود بما دفعه على المدين.
- 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 35
The possessor of a mortgaged property may object to the debt for which the property was sold, with everything the debtor could have objected with, if the debt was registered after the possessor's ownership document.
لحائز العقار المرهون أن يعترض على الدين الذي بيع العقار بسببه بجميع ما كان يجوز للمدين أن يعترض به إذا كان الدين مسجلاً بعد وثيقة ملكية الحائز.
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.