Article 39 of the Saudi Registered Real Estate Mortgage Law
المادة 39 من نظام الرهن العقاري المسجل
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.
Official text (Arabic)
This article has not been amended since the law was issued.
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.
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 39 explained in plain English
This article states one of the grounds for the extinction of a registered mortgage: the compulsory sale of the mortgaged property.
The text of the article does not tie extinction to the sale alone, but joins it with two things:
- The sale must be compulsory and in accordance with the law.
- The price must be paid to the mortgagee creditors according to the rank of each of them, or deposited in a bank account of the court.
If there are several mortgagee creditors on the same property, each is paid from the price according to rank. After the compulsory sale and the payment or deposit of the price in this way, the registered mortgage on the property is extinguished.
This article is connected to Article 38, which provides that when the debtor defaults and the court sells the mortgaged property before the whole term has arrived, the installments that have fallen due are paid to the creditor and the rest of the amount is deposited in a bank account of the court. Article 40 makes merger of rights, where the right of mortgage and the right of ownership come together in one person, another ground for the extinction of a registered mortgage.
Anyone entitled to part of the price of a mortgaged property sold compulsorily, or who wants to confirm that the mortgage has been extinguished after the sale, would do well to consult a lawyer specializing in enforcement or real estate cases.
Practical example
A property in Medina was mortgaged to two banks and was sold compulsorily under the law because the debt was not paid, and its price was paid to the two banks according to the rank of each. The registered mortgage on the property is thereby extinguished.
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 39 of the Saudi Registered Real Estate Mortgage Law
Does the mortgage end if the property is sold compulsorily?
Yes. A registered mortgage is extinguished by a compulsory sale of the mortgaged property under the law and payment of its price to the mortgagees according to the rank of each, or its deposit in a bank account of the court.
How is the price of a mortgaged property paid when there is more than one creditor?
Article 39 provides that the price is paid to the mortgagee creditors according to the rank of each of them.
More articles on Ending and Releasing the Mortgage
- Article 37
The mortgage follows the debt, so it is released when the whole secured debt is extinguished and returns if the debt returns, without prejudice to rights acquired in good faith by others in between.
1 - الرهن تابع للدين، فينفكّ الرهن بانقضاء جميع الدين الموثق به. 2 - إذا كان الدين قد انقضى ثم عاد لأي سبب موجب لبقائه، رجع الرهن كما كان برجوع الدين، دون مساس
- Article 38
On early repayment of the debt or part of it, a part of the debt is deducted under the early repayment standards in the Finance Companies Control Law; if the court sells the property before the term ends, it pays the due installments to the creditor and deposits the rest in its bank account.
1 - إذا سدد الدين أو بعضه قبل أجله باتفاق المتعاقدين، أو بحكم العقد، أو النظام، أو القضاء؛ فيحط جزء من الدين طبقًا لمعايير السداد المبكر المنصوص عليها في نظام م
- Article 40
A registered mortgage is extinguished by merger of rights, when the right of mortgage and the right of ownership come together in one person, and returns if the cause of the merger ceases retroactively.
ينقضي الرهن المسجل باتحاد الذمة، باجتماع حق الرهن مع حق الملكية في يد شخص واحد، سواءً أكان بانتقال ملكية العقار المرهون إلى المرتهن، أم بانتقال حق المرهون إلى ا
- Article 41
A registered mortgage is extinguished when the mortgagee waives it by a documented waiver, and the mortgagee may waive the mortgage right while the debt remains.
ينقضي الرهن المسجل إذا تنازل المرتهن عنه تنازلاً موثقًا، وله أن يتنازل عن حق الرهن مع بقاء الدين.
- Article 42
A registered mortgage is extinguished by the destruction of its subject, subject to the provisions on destruction of the mortgage set out in the law.
ينقضي الرهن المسجل بهلاك محلّه، وتراعى أحكام هلاك الرهن المنصوص عليها في هذا النظام.
- Article 43
The mortgagor and the possessor may request release of the mortgage after the period for hearing a claim on the debt secured by the mortgage, set out in other laws, has elapsed.
للراهن والحائز طلب فك الرهن بعد انقضاء مدة سماع دعوى الدين الموثق به الرهن المنصوص عليها في الأنظمة الأخرى.
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.