No mortgage defaults have been recorded so far in Dubai despite the worsening global economic crisis, according to a senior official at the land department, it was reported on Sunday.
According to UAE law properties can be repossessed by banks if owners default on their mortgage, and sold off at public auction by the Dubai Land Department.
Owners are given 60 days to demonstrate they are able to pay the arrears, but on the expiry of 60 days a judge can order the property sold, according to lawyers in UAE daily Emirates Business.
However, assistant director general at the land department, Mohammed Sultan Al Thani said: "No mortgage defaults have so far been recorded. As far as we know nothing has been officially recorded.” Ali Al Haddad, owner and senior lawyer at Al Haddad & Associates, also said his firm had not seen any defaults.
"It would be the Dubai Courts and not the Property Court that would handle cases of mortgage defaults in Dubai," he added.
Article 26 of Law 14 concerning mortgages says: "If the mortgagor or debtor fails to pay the mortgage within a period specified, the execution judge shall, upon request of the mortgagee or the creditor, give order for the mortgaged property to be sold in a public auction."
the judge can then delay teh sale for a further 60 days, added Ashley Painter, a finance partner at Clyde and Company.
"The judge can delay the sale for not more than 60 days, but only if he is convinced that the borrower will be able to discharge the debt within that period," he said.
The suporting evidence is set out in Article 27 that says the 60 day delay (of a sale) will be allowed only if the judge finds that the sale of the mortgaged property would cause substantial damage to the debtor.