UAE Civil Transactions Law — articles 1301–1400

1. A guardian may, with the permission of the court, mortgage the property of a minor or interdicted person to secure a debt owed by either of them to a third party. 2. A guardian may not mortgage their own property to s…

The mortgaged immovable property must be existing and identified at the time the mortgage is created.

1. A mortgage may only be created over an immovable property that is legally capable of disposition and sale by public auction, or over a real right in rem over an immovable property. 2. The court may annul a mortgage co…

The mortgage extends to the appurtenances of the mortgaged immovable property, including buildings, plantings, and immovables by allocation, and to all constructions erected thereon after the conclusion of the contract.

1. A co-owner in an immovable property held in common may mortgage their share, and the mortgage shall, after partition, attach to the partitioned share that falls within their allotment, subject to its registration with…

The consideration for a mortgage must be a debt existing in the debtor’s liability, or a promised debt determined at the time of the mortgage, or a specific secured property.

A registered mortgage is indivisible; every part of the mortgaged immovable property secures the whole of the debt, and every part of the debt is secured by the mortgaged immovable property.

The provisions of a security mortgage shall apply to movables whose special laws require its registration.

The mortgagor may dispose of their immovable mortgaged by way of security, without prejudice to the rights of the mortgagee.

1. The mortgagor has the right to manage the mortgaged immovable and to collect its fruits until the date of foreclosure upon non-payment of the debt. 2. The fruits shall accrue to the mortgaged immovable from the date o…

The mortgagor warrants the mortgaged immovable and is responsible for its full preservation until the date of payment of the debt. The mortgagee may object to any impairment of the security and take such measures as pres…

1. If the immovable property perishes or is damaged by the fault of the mortgagor, the mortgagee may demand immediate payment of their debt or the provision of adequate security for the debt. 2. If the perishing or deter…

The mortgage shall attach, upon the perishing or damage of the mortgaged immovable, to any property that replaces it, such as compensation, insurance proceeds, or the consideration for expropriation for public benefit. T…

If the mortgagor is a surety in rem, the debt may not be claimed except from the mortgaged immovable, and they may not seek recourse against the debtor before enforcement against the mortgaged immovable.

A mortgagee may assign their right to another, provided that the debtor's consents and the deed of assignment are registered with the competent authority.

1. The mortgagee has the right to satisfy their debt from the mortgaged immovable property upon the maturity of the debt, according to their rank, and after following the legal procedures before the competent court, in a…

If it is stipulated in the registered mortgage contract or in a subsequent agreement to transfer ownership of the mortgaged property in the mortgagee in exchange for their debt if the mortgagor does not pay it at the spe…

1. An existing lease issued by the mortgagor is not effective against the mortgagee unless it bears an established date prior to the mortgage. 2. A deferred lease that begins after the expiration of the existing lease sh…

A mortgage shall be enforceable against third parties from the date of its registration, provided that registration precedes the acquisition by a third party of any right in rem over the mortgaged immovable.

The effect of the mortgage shall be limited to the amount specified in the mortgage deed and registered with the competent authority, unless the law or agreement provides otherwise.

The assignment of a mortgage, its waiver, the waiver thereof, or the waiver of its rank shall not be enforceable against third parties unless both are recorded on the instrument evidencing the principal right and duly re…

1. The debts of creditors secured by a mortgage shall be paid from the price of the mortgaged property or from the property replacing it, according to the rank of each of them, even if registration took place on the same…

A mortgagee may waive the rank of their mortgage, to the extent of the secured debt, in favor of another mortgage over the same mortgaged property. All defenses that may be raised against the first creditor may be raised…

1. The rank of a mortgage shall be determined from the date of its registration. 2. The mortgage shall retain its rank until an entry indicating its extinction is recorded with the competent authority.

The registration of a mortgage shall result, by operation of law, in the inclusion of the contract expenses and registration expenses in the mortgage debt and its rank.

A mortgagee secured by a mortgage shall have the right to trace the mortgaged property in the hands of any possessor to satisfy their debt upon maturity, in accordance with the rank of the mortgage.

A mortgagee secured by a mortgage may initiate foreclosure proceedings and the sale of the mortgaged immovable if the debt is not paid upon maturity, after notifying the debtor and the possessor of the property, and afte…

Any person to whom ownership of the mortgaged immovable or another real right (jus in rem) therein is transferred, for any reason, after the mortgage, without being personally bound by the mortgage debt, shall be deemed …

A possessor of a mortgaged property may pay the mortgage debt and the related expenses after being notified, and shall have the right to recourse against the debtor. They shall also be subrogated to the rights of the cre…

A possessor of a mortgaged property has the right to purge the property that has devolved to them of any real right (jus in rem) constituted thereon as security for a registered debt, by paying the debt before the date o…

Foreclosure procedures shall be carried out in accordance with the provisions of the law if the debt is not paid.

A possessor of a mortgaged property may participate in the auction for the sale of the property. If the auction is awarded to them and they pay the price, they shall be deemed the owner of the property by virtue of their…

If the auction of the mortgaged property is awarded to a person other than its possessor, the former shall acquire it by virtue of the judgment awarding auction and shall derive their right from the possessor.

1. The possessor shall be liable for any damage or defect affecting the mortgaged property, in accordance with the rules of warranty provided for in this Law. 2. The possessor shall be obliged to return the fruits of the…

If the price of the sold property exceeds the value of the secured debts, the surplus shall belong to the possessor, and their mortgagees shall be entitled to satisfy their debts therefrom.

1. The possessor may bring a warranty claim against the previous owner to the extent that a successor may have recourse against the person from whom ownership was acquired, whether by way of a commutative contract or gif…

1. A mortgage shall be extinguished upon the full extinguishment of the secured debt. 2. If the cause of the extinguishment of the debt ceases to exist, the mortgage shall be reinstated as it was, without prejudice to th…

1. The debtor may discharge the debt secured by the mortgage and its appurtenances before the due date of payment. 2. If the creditor does not accept payment of the debt before its due date, the debtor may deposit it wit…

The mortgage shall be extinguished by the sale of the mortgaged property in accordance with the procedures prescribed by law before the competent court, and the payment of its price to the mortgagees according to the ran…

A mortgage shall be extinguished by one of the following reasons: 1. The transfer of ownership of the mortgaged property to the mortgagee or the transfer of the right of mortgage to the mortgagor, provided that it shall …

1. If the period for non-admissibility of the claim by lapse of time has expired with respect to the secured debt, the mortgagor may request a judgment for the release of the mortgage. 2. If the mortgaged property passes…

A mortgage shall not be extinguished by the death of the mortgagor or the mortgagee, and shall remain in force against or in favor of the heirs.

A possessory pledge is a contract that creates a right to retain property in the possession of the creditor or a neutral custodian as security for a right that may be satisfied therefrom, in whole or in part, in priority…

The item pledged shall be capable of delivery at the time of the pledge and suitable for sale by public auction.

1. It is permissible to pledge fruits before their ripening; however, they may not be sold to satisfy the debt unless they have ripened. If the pledgor becomes bankrupt or dies before their ripening, the pledgee shall pa…

It is permissible to pledge a perishable item for a deferred debt, and it shall be preserved if possible; otherwise, it shall be sold by public auction, and its price shall replace it as the pledged property.

It is required that the consideration for a possessory pledge be a debt established in the liability, or a promised debt determined at the time of the pledge, or a specific guaranteed property.

For a possessory pledge to be complete and binding, it shall be delivered into the possession of the creditor or the neutral custodian, and the pledgor may revoke the pledge before delivery.

If the pledgor becomes subject to a legal restriction on financial disposition before the pledgee possesses the pledged item, the pledge contract shall be void.

The pledgor and the pledgee may agree to place the pledged property in the possession of a neutral custodian. In such case, the possession of the neutral custodian shall be deemed the possession of the pledgee, and the p…

1. The neutral custodian may not deliver the pledged property to the pledgor or the pledgee without the consent of the other, as long as the debt is outstanding, and shall have the right to reclaim it if they have delive…

If the neutral custodian dies and the pledgor and pledgee do not agree to place the pledged property with another, either of them may request the court to order its placement in the possession of a neutral custodian chos…

For a pledgor to make a possessory pledge for a debt owed thereby or by another, they shall be the owner of the pledged property and have the legal capacity to dispose thereof.

The provisions on mortgage set forth in Articles (1300) and (1301) of this Law shall apply to the possessory pledge.

The provisions on mortgage set forth in Article (1305) of this Law shall apply to the possessory pledge of undivided property.

If an undivided share in an immovable property or the like is pledged, the pledgee shall take possession of the whole if the remainder is owned by the pledgor. If it is owned by another, taking possession of the pledged …

The provisions on the indivisibility of the pledged property as security for the debt, set forth in Article (1307) of this Law, shall apply to the possessory pledge, and the whole of it shall remain security for the enti…

A possessory pledge shall include all appurtenances attached to the pledged property to the same extent as they are included in a sale.

If the property pledged by way of a possessory pledge, while in the possession of the purchaser, yields a distinct accretion that is of the same genus, such accretion shall be subject to the pledge. If it is not of the s…

1. A possessory pledge may secure more than one debt of the same rank, provided that the pledge is created by a single contract. 2. The entire property shall be pledged to each of the creditors in respect of their respec…

1. A property lent for use may be pledged with the authorization of the lender and subject to the lender’s conditions. 2. The lender may not recover the pledged property before the debt is satisfied.

1. The pledgor may not dispose of the property subject to a possessory pledge except with the consent of the pledgee. 2. If such disposition is a sale, the pledgee's right shall transfer to the price of the pledged prope…

1. If the pledgor acknowledges that the property subject to a possessory pledge belongs to another, their acknowledgment shall not be effective against the pledgee. 2. The acknowledgment referred to in Paragraph (1) of t…

The pledgor shall guarantee the safety of the pledged property and may not perform any act that diminishes its security or prevents the pledgee from exercising their rights.

The provisions governing the perishing or damage of the pledged property due to the pledgor's fault or due to force majeure, as set forth in Article (1312) of this Law, shall apply to the possessory pledge.

Upon the perishing or damage of the pledged property, the possessory pledge shall transfer to the property that has replaced it, and the pledgee may satisfy their right therefrom in accordance with the provisions of Arti…

The pledgee shall preserve the property subject to a possessory pledge personally or through their trustee, and shall care for it with the care of an ordinary person. The pledgee shall be liable for its perishing or dama…

The pledgee may not dispose of the pledged property without the authorization of the pledgor, and they may not sell it unless they are an agent for the sale.

1. The pledgee may not derive benefit from the property subject to a possessory pledge, whether movable or immovable, without the authorization of the pledgor. 2. The pledgor may authorize the pledgee to derive benefit f…

The pledgee may stipulate the benefit of the pledge for themselves, provided that its duration is specified by time or by an act, and it is calculated as part of the debt, whether the debt arises from a sale or from a lo…

If the creditor misuses the pledged property, the pledgor has the right to request that the pledged property be placed in the custody of a neutral custodian.

The pledgee may retain the property subject to a possessory pledge until the entire debt and its related accessories or expenses are satisfied, after which the pledgee shall return the pledged property to its pledgor.

1. If the pledged property perishes while in the possession of the pledgee, they shall be liable for its value as pf the date of taking possession. 2. If the value of the pledged property is equal to the value of the sec…

A possessory pledgee shall have the rights of a mortgagee in executing upon the pledged property and then upon all other assets of the debtor if the entire debt is not satisfied, as provided for in Article (1316) of this…

The provisions of Article (1317) of this Law shall apply to the possessory pledge.

For a possessory pledge contract to be effective against third parties, the pledged property shall be in the possession of the pledgee or the neutral custodian agreed upon by the parties.

The pledgee may retain the pledged property under their possession until the entire debt and its related accessories or expenses are satisfied. If possession thereof is lost without their will, they shall have the right …

A possessory pledge shall secure the principal debt, the necessary expenses paid by the pledgee on behalf of the pledgor, and the expenses of concluding and enforcing the pledge contract.

A possessory mortgage of immovable property shall not be effective against third parties unless it is registered in addition to the pledgee's possession of the mortgaged immovable property.

1. The mortgagee creditor may lend the immovable property subject to a possessory mortgage or lease it to the mortgagor, provided that the mortgaged property remains as security for the payment of the debt, without preju…

The mortgagee creditor shall bear the necessary expenses for the repair and maintenance of the mortgaged property, as well as the taxes and charges due thereon, and such amounts shall be deducted from the yields of the m…

A possessory pledge of a movable shall not be effective against third parties unless it is recorded in an instrument of fixed date stating the debt and the pledged property, in addition to the transfer of possession to t…

If the pledged property is threatened with perishing, damage, or a diminution in its value, the pledgee shall notify the pledger thereof. If the pledger does not provide alternative security, either party may request the…

The pledger may request the court's permission to sell the pledged property if an opportunity arises to sell it at a profitable price, even before the debt becomes due. The court shall, upon granting such permission, spe…

The preceding provisions shall apply to the extent that they do not conflict with the applicable legislations.

A person who pledges a debt owed thereto shall deliver the instrument evidencing such debt to the pledgee.

1. The pledge of a debt shall not be effective against the debtor unless the debtor is notified thereof or accepts it. 2. It shall not be effective against persons other than the debtor unless the pledgee takes possessio…

Registered instruments or promissory notes may be pledged in the special manner prescribed by law for their assignment, provided that it is stated that the assignment is made by way of pledge.

A debt that cannot be assigned or attached may not be pledged.

The pledgee may receive the periodic entitlements and charges related to the pledged debt, and in this case, shall deduct them from the expenses and then from the principal of their debt.

The pledgee creditor shall preserve the pledged debt. If they have the right to collect any part of this debt without the intervention of the pledger, they shall collect it at the time and place designated for performanc…

The debtor of the pledged debt may assert against the pledgee creditor the defences related to the validity of the right secured by the pledge, as well as the defences they have against their own original creditor, to th…

1. The debtor of the pledged debt shall perform the debt to the pledger and the pledgee jointly if it becomes due before the maturity of the debt secured by the pledge. 2. The pledger and the pledgee may agree to deposit…

If both the pledged debt and the debt secured by the pledge become due and the pledgee has not collected their right, they may collect from the pledged debt the amount due thereto and return the remainder to the pledger,…

The provisions governing possessory pledge of a movable shall apply to the pledge of a debt to the extent that they do not conflict with the preceding provisions.

A possessory pledge shall be extinguished by one of the following reasons: 1. The full extinction of the secured debt, provided that it shall revive if the cause of its extinction ceases to exist, without prejudice to th…

A possessory pledge shall not be extinguished by the death of the pledger or the pledgee, and it shall remain as a pledge in the hands of the heirs until the performance of the debt.

Privilege is an accessory real right that gives the creditor priority in the satisfaction of their right, having regard to its status, and is established by operation of law.

1. If the law does not specify the rank of the privilege, its rank shall be subsequent to the rights provided for in this section. 2. If the rights are of the same rank, they shall be satisfied proportionately, unless th…

A creditor's general privilege shall attach to all of the debtor's assets. A special privilege, however, shall be limited to a specific movable or immovable property.