Article 33 of the Saudi Registered Real Estate Mortgage Law
المادة 33 من نظام الرهن العقاري المسجل
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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.
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 33 explained in plain English
This article deals with the case opposite to that in Article 32: the auction for the sale of the mortgaged property is awarded to a person other than its possessor. It provides the following:
- Title to ownership: the person to whom the auction is awarded acquires ownership of the property under the decision awarding the auction to them.
- Source of the right: the person to whom the auction is awarded receives their right from the possessor, that is, from the person in whose hands the mortgaged property was.
- The possessor's participation makes no difference: this provision applies whether or not the possessor entered the auction.
The difference between Articles 32 and 33 appears in the basis of ownership: a possessor to whom the auction is awarded and who pays the price is regarded as owner under the original ownership document, while anyone else owns under the decision awarding the auction. Article 34 completes the picture by providing that if the price of the mortgaged property exceeds the value of the registered debts, the excess belongs to the owner.
Anyone who buys a property at the auction of a mortgaged property and wants to understand the effect on their legal position would do well to consult a lawyer specializing in real estate or enforcement cases.
Practical example
Sara entered an auction for the sale of a mortgaged villa in Dammam that was in the hands of an earlier buyer, and the auction was awarded to her. Sara acquires ownership of the villa under the decision awarding the auction to her, and receives her right from the possessor, whether or not the possessor took part in the auction.
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 33 of the Saudi Registered Real Estate Mortgage Law
On what basis does the buyer own a mortgaged property bought at auction?
If the buyer is not the possessor, the buyer acquires ownership of the property under the decision awarding the auction to them.
From whom does the person to whom the auction is awarded receive their right?
They receive their right from the possessor of the mortgaged property.
Does the rule change if the possessor did not enter the auction?
No. Article 33 applies whether or not the possessor entered the auction.
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 28
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.
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 لنظ
- 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 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.