Article 6 of the Saudi Registered Real Estate Mortgage Law
المادة 6 من نظام الرهن العقاري المسجل
The Article provides that a mortgage granted by all the owners of a commonly owned property remains effective, whether or not the property can be divided.
Official text (Arabic)
This article has not been amended since the law was issued.
يبقى الرهن الصادر من جميع ملاّك العقار الشائع نافذًا، سواءً أكان العقار المرهون ممّا يمكن قسمته أم لا.
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 6 explained in plain English
A commonly owned property is one owned by more than one person without each person's share being separated out, such as land owned by several heirs or partners. This Article deals with a situation where the mortgage is granted by all the owners together.
The rule is that this mortgage remains effective, and is not affected by the nature of the property in terms of whether it can be divided; whether the property is one that can be divided among the partners or one that cannot, the mortgage granted by all of them remains in force.
The importance of this provision is that the mortgagee creditor can be confident that his mortgage is not weakened if a later division takes place or division proves impossible, as long as the mortgage was granted by all the owners. This differs from the situation where one partner mortgages his share alone, which Article 7 deals with, where the mortgage after division converts to the separated part that falls to that partner's share or to its equivalent.
Someone who is a partner in a property and is thinking of mortgaging it with the other partners or alone would do best to consult a lawyer specialized in real estate and real estate finance matters.
Practical example
Four brothers inherited a building in Makkah in common, and all agreed to mortgage it to a financing company to secure a loan. This mortgage remains effective over the whole building, whether or not it can later be divided among them.
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 6 of the Saudi Registered Real Estate Mortgage Law
Is a mortgage of a property owned by several heirs valid?
If the mortgage is granted by all the owners of the commonly owned property, it remains effective.
Does the property being impossible to divide affect the mortgage?
No. A mortgage granted by all the owners remains effective whether or not the property can be divided.
What if only one partner mortgages his share?
Article 7 deals with this case, where after division the mortgage converts to the separated part in the partner's share or to an equivalent of the value of his share.
More articles on Mortgaging Jointly Owned Property
- Article 7
The Article sets what happens to a partner's mortgage of his undivided share after division: it converts to the separated part in his share or to an equivalent amount set by the judge, and his entitlements are applied to repay the debt.
1 - إذا رهن أحد الشركاء حصته المشاعة (جميعها أو بعضها)، فإن الرهن يتحول بعد القسمة إلى الجزء المفرز الذي وقع في نصيبه. 2 - إذا رهن أحد الشركاء حصته المشاعة (جمي
- Article 8
The Article bars the mortgagee in a jointly owned mortgage from requesting division before his right of collection is established, except with the mortgagor's consent, and allows him afterwards to request a sale of the undivided share or division.
لا يجوز للمرتهن في الرهن الشائع طلب القسمة قبل ثبوت حقه في الاستيفاء من العقار المرهون، إلا بموافقة الراهن. أما بعد ثبوت الحق في الاستيفاء من العقار المرهون، فل
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.