The government of Dubai, the commercial and financial hub of the United Arab Emirates (UAE), has issued a mortgage law as part of efforts to regulate the emirate's booming real estate sector, local newspaper Khaleej Times reported on Wednesday.
The 35-article law regulates the mortgage process in an effort to protect the rights of lenders and borrowers and improve transparency, according to Marwan Ahmed bin Ghalita, chief executive of Dubai's Real Estate Regulatory Authority.
The law, which will come into effect 60 days after its publication, "is basically covering the mortgage procedures in Dubai," Ghalita said.
According to the law, mortgage contracts should be registered with the Land Department of Dubai, specifying the size of the loan, the repayment period and the value of the property to which the loan is linked.
It also requires that mortgages taken out on properties in Dubai should be sold by registered financial institutions, and should be insured.
In addition, the law requires borrower and lender to present full financial documents when the mortgage is registered.
"It gives more confidence to the lender and gives more security for banks," Ghalita said.
Dubai's property boom began in 2002, when it allowed foreign investors to buy property on a freehold basis.
The emirate's mortgage business has burgeoned since then, with home loans in the UAE jumping 55 percent in the year to March, according to the UAE Central Bank.
Standard Chartered warned in July that Dubai's property market showed signs of overheating as speculators betting on quick gains inflate prices of real estate still under construction.
Source:Xinhua
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