أسئلة قانونية إماراتية عامةDecree No. (31) of 2016

Article (1) The following words and expressions, wherever mentioned in this Decree, will have the meaning indicated opposite each of them unless the context implies otherwise: Emirate: The Emirate of Dubai. ©2017 The Supreme Legislation Committee in the Emirate of Dubai 1Every effort has been made to produce an accurate and complete English version of this legislation. However, for the purpose of its interpretation and application, reference must be made to the original Arabic text. In case of conflict the Arabic text will prevail.

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Decree No. (31) of 2016 Concerning the Mortgage of Granted Land in the Emirate of Dubai Page 2 of 6 Government: The Government of Dubai. DLD: The Land Department. MRHE: The Mohammed bin Rashid Housing Establishment. Board of Directors: The board of directors of the MRHE. Director General: The director general of the DLD. Beneficiary: A natural or legal person who has a usufruct right to Granted Land. Granted Residential Land: A land plot owned by the Government and granted to a Beneficiary for residential use. Granted Commercial or Industrial Land: A land plot owned by the Government and granted to a Beneficiary for commercial or industrial use. Granted Land: Granted Residential Land, Granted Commercial or Industrial Land, or any other land granted by the Government. Mortgaged Land: Granted Land mortgaged together with any buildings or structures thereon. Mortgagor: A Beneficiary who has a usufruct right to Granted Land. Mortgagee: A creditor who lends money to a Mortgagor against Granted Land provided as collateral. Competent Entity: The competent entity in the Emirate in charge of licensing the construction of buildings and other structures. Mortgage Authorisation and Conditions

Article (2) a. A Beneficiary is authorised to mortgage Granted Land in favour of any of the banks or financing institutions licensed to operate in the Emirate. This mortgage will be legally valid and binding on both parties. b. For the mortgage referred to in paragraph (a) of this Article to be valid and legally effective, the following conditions must be met:

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Decree No. (31) of 2016 Concerning the Mortgage of Granted Land in the Emirate of Dubai Page 3 of 6 1. the purpose of mortgaging the Granted Commercial or Industrial Land must be to invest the loan in exploiting the land for the purpose for which it is granted; 2. the purpose of mortgaging the Granted Residential Land must be to invest the loan in the maintenance, expansion, construction, or reconstruction of an existing building; 3. the mortgage must be registered in accordance with the provisions and procedures stipulated in the above-mentioned Law No. (14) of 2008; and 4. any other conditions prescribed, in coordination with the MRHE, by the DLD pursuant to a resolution issued by the Director General in this regard. Registration of Mortgages

Article (3) a. The DLD may not register any mortgage that does not meet the conditions stipulated in paragraph (b) of Article (2) of this Decree. b. When registering the mortgage of Granted Land, the DLD must ensure that the mortgage agreement: 1. stipulates that the loan be used to achieve the purpose for which the land is granted; 2. is accompanied by a building permit submitted by the Mortgagor which is issued by the Competent Entity; and 3. is accompanied by any other documents or information the DLD may require the Mortgagor to submit to verify the authenticity of the information included in the mortgage agreement and to ensure the implementation of such agreement. Land Granted to Entities Affiliated to the Government and Real Estate Developers

Article (5) a. Notwithstanding the provisions of Article (2) and Article (4) of this Decree, the income of the real property constructed on Granted Commercial or Industrial Land may be pledged, exclusive of the land, in favour of any of the banks or financing institutions licensed to operate in the Emirate. In such a case, the pledgee will manage the real property and collect its income until the repayment of the loan, or as agreed by both parties. b. For the purpose of implementing the provisions of paragraph (a) of this Article, the DLD will mark an entry on the folio of the Granted Commercial or Industrial Land in the register denoting that the income of the real property constructed on that land is pledged in favour of the pledgee. Procedures for Foreclosure on Mortgaged Land

Article (8) a. Without prejudice to the rights of the MRHE as a preferential creditor, the Mortgagor’s debts will be paid from the proceeds of the foreclosure sale of the Mortgaged Land after deducting the following amounts:

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Decree No. (31) of 2016 Concerning the Mortgage of Granted Land in the Emirate of Dubai Page 5 of 6 1. court fees and costs; 2. the fees and costs of the sale of the Mortgaged Land at public auction and fees and costs for the registration of the sale with the DLD; and 3. the fees payable in accordance with the above-mentioned Law No. (4) of 2010 for the grant of title of land allocated for industrial and commercial use, where such fees are not paid upon the registration of the mortgage. b. The balance of the price of sale of Granted Commercial or Industrial Land at public auction, if any, will be paid to the Mortgagor. c. The balance of the price of sale of Granted Residential Land at public auction, if any, will be paid towards the purchase of a house that will be registered as a grant in the name of the Beneficiary or towards providing him with any other housing services as the MRHE deems appropriate. However, if the remaining amount is not sufficient to purchase a house, that amount will be paid to the Mortgagor. Sale of Granted Residential Land