Question 1

What are the UAE Central Bank LTV caps for residential mortgages?

Accepted Answer

Loan-to-value ratios are capped by Central Bank Notice 31/2013 (as amended): UAE nationals — up to 80% LTV for first property under AED 5m, 70% for property over AED 5m, 65% for second property; expat residents — up to 75% LTV for first property under AED 5m, 65% for property over AED 5m, 60% for second property; non-residents and off-plan — typically 50-60% LTV. Debt-burden ratio (DBR) is capped at 50% of monthly income.

Question 2

When is a UAE mortgage perfected?

Accepted Answer

At the moment of registration with the relevant Land Department (Dubai Land Department or Abu Dhabi DARI/DMT). Mortgage registration is constitutive — until the mortgage is registered, the security is not perfected and the lender is unsecured. Registration fee is typically 0.25% of loan value. The lender's title-deed copy reflecting the registered mortgage is the proof of perfection.

Question 3

How are Sharia-compliant property finance structures different?

Accepted Answer

Two principal structures dominate: Diminishing Musharaka (the bank and customer co-own the property; the customer buys out the bank's share over time through periodic payments combining ownership transfer and rent) and Ijarah Muntahia Bittamleek (the bank owns the property and leases it to the customer with a transfer-of-ownership undertaking at end of lease). Both structures are DLD-registered as security and operate substantively similar to a conventional mortgage — but the legal architecture is sale-and-lease rather than loan-and-mortgage. We act for both Islamic banks (origination) and customers.

Question 4

How is mortgage enforcement carried out?

Accepted Answer

Through the Execution Court. Default acceleration → notice to defaulting borrower → application to Execution Court → court-supervised auction sale of the mortgaged property. Auction-process timeline typically 6-9 months from default acceleration to completed sale. Recovery is from sale proceeds; deficiency recourse against the borrower personally is available but rarely yields material additional recovery in practice. We act for lenders (origination through enforcement) and for distressed borrowers (workout structuring and litigation defence).

Question 5

Do you advise on commercial real-estate finance?

Accepted Answer

Yes — commercial property mortgages, hotel-asset finance, retail and office park finance, REIT-finance structures, and development finance for under-construction projects. Commercial finance involves additional layers — covenant packages, financial-ratio testing, valuation periodicity, intercreditor where the borrower has multiple loans, and SNDA arrangements with hotel operators or major tenants. We work alongside our broader banking and finance practice on complex commercial property finance.

Mortgage origination, Sharia structures, refinancing, enforcement.

Frequently asked questions

Mortgage matter on your desk?