Article 7 of the Saudi Registered Real Estate Mortgage Law

This Article deals with a situation where one partner mortgages his undivided share in a property, whether the whole share or part of it, and then the property is divided among the partners. It sets three provisions:

1. The mortgage converts to the separated part: after division the mortgage moves to the specific part that falls to the share of the mortgagor partner.
2. If other assets fall to him: if the partner's share after division becomes assets other than those he mortgaged, or only some of them fall to his share, the mortgage moves to an amount of these assets equal to the value of the share that was originally mortgaged, and this amount is determined and registered by order of the competent judge.
3. Amounts due to the mortgagor: if the mortgagor becomes entitled to amounts arising from equalization of shares or from the price of the mortgaged property, they are applied to repay the debt secured by the mortgage.

The aim of these provisions is that division does not extinguish the mortgagee's right or reduce his security, but the security moves to what replaces the share. This differs from the sixth Article, which deals with a mortgage granted by all the owners. The eighth Article then explains when the mortgagee may request division.

Because determining the equivalent amount requires a judicial order, it may be useful for anyone going through the division of a mortgaged property to consult a lawyer specialized in real estate and real estate finance matters.