Article 34 of the Saudi Registered Real Estate Mortgage Law
المادة 34 من نظام الرهن العقاري المسجل
If the price of the mortgaged property exceeds the value of the registered debts, the excess belongs to the owner.
Official text (Arabic)
This article has not been amended since the law was issued.
إذا زاد ثمن العقار المرهون على قيمة الديون المسجلة، كانت الزيادة للمالك.
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 34 explained in plain English
This article settles the fate of the surplus from the price of the mortgaged property: if the price of the mortgaged property exceeds the value of the registered debts, the excess belongs to the owner.
The mortgage assures the mortgagee creditors that their registered debts will be paid from the price of the property, but anything above the value of those debts does not go to them; the article gives it to the owner of the property.
- Basis of comparison: the price of the mortgaged property against the value of the registered debts.
- Who is entitled to the surplus: the owner.
This article comes in the context of the provisions on the sale of the mortgaged property at auction: Article 33 shows that anyone to whom the auction for the sale of the property is awarded, other than the possessor, acquires ownership under the decision awarding the auction and receives their right from the possessor, and Article 34 then shows the fate of the price if it exceeds the registered debts. Article 35 also gives the possessor the right to 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.
The article does not address how the surplus is calculated or the procedures for paying it out. If a dispute arises over the amount of the registered debts or entitlement to the excess, the owner would do well to consult a lawyer specializing in enforcement or real estate cases.
Practical example
Abdullah's property in Makkah is mortgaged to a financing provider for a registered debt of SAR 600,000, and it was sold at auction for SAR 800,000. Because the price exceeded the value of the registered debt, the excess of SAR 200,000 belongs to Abdullah as owner.
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 34 of the Saudi Registered Real Estate Mortgage Law
Who gets the surplus if a mortgaged property is sold for more than the debt?
The excess over the value of the registered debts belongs to the owner of the property.
Does the mortgagee take the whole price of the mortgaged property?
Article 34 provides that whatever part of the price exceeds the value of the registered debts belongs to the owner.
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 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.
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.