Procedural Requirements for Mortgage Registration
No: 391000070455 Date(g): 6/3/2018 | Date(h): 19/6/1439 Status: In-Force Translated Document
Based on the powers granted to SAMA under the Saudi Arabian Monetary Authority Law issued by Royal Decree No. (23) dated 23/5/1377 H, and the Banking Control Law issued by Royal Decree No. (M/5) dated 22/2/1386 H, and the Financing Companies Control Law issued by Royal Decree No. (M/51) dated 13/8/1433 H, and with reference to the Registered Real Estate Mortgage Law issued by Royal Decree No. (M/49) dated 13/8/1433 H.
Given the discrepancies reported to SAMA between the procedures of financing entities and notaries, and in continuation of the cooperation between the Ministry of Justice and SAMA, the Ministry of Justice has issued a procedural guide aimed at standardizing mortgage procedures between financing entities and notaries. Additionally, the Ministry has released forms for mortgage registration and an incident registration form.
Therefore, SAMA requires banks and financing companies to adhere to the following:
First: Adhere to and comply with the procedural requirements for documenting and registering mortgages according to the registration forms (Appendix 1).
Second: Provide SAMA with cases where notaries refuse to act, using the Incident Documentation Form (Appendix 2).
Procedural Requirements for Mortgage Documentation and the Prepared Forms for That Purpose.
First: The presence of the mortgagor or their representative with a power of attorney authorizing the required action.
Second: The presence of a representative from the financer (bank or financing company) with a power of attorney authorizing the required action.
Third: The mortgagee must be a licensed bank or financing company, and the financer must hold a valid license from SAMA for real estate financing.
Fourth: The mortgaged property must be owned by the mortgagor. However, it is permissible for the mortgaged property to belong to a guarantor who offers their property as collateral for the benefit of the debtor, even without the debtor's consent.
Fifth: The mortgaged property must be specifically identified, existing or expected to exist, and capable of being sold.
Sixth: The financer must provide proof that the contract executed between them and the mortgagor complies with Islamic Sharia principles, through a letter from the Sharia board granting approval of the product, rather than approving each individual contract separately.
Seventh: The completion of the transfer of ownership and the mortgage must be done in a single process, in accordance with Ministry of Justice Circular No. 13/T/6973 dated 19/1/1439 H, for the purposes of correcting a previous mortgage.
Eighth: The process must be carried out in accordance with the forms prepared by SAMA and the Ministry of Justice.
Form 1 (Property Owned by the Financing Company)
To His Excellency, the Chief Notary of ............... May Allah protect him
Peace be upon you, and the mercy and blessings of Allah,To proceed:
We inform you that the bank/company: ........................, under Commercial Register No. ............................... dated / / 14 H, owns the property according to the deed issued by your office No. ............ dated / / 14 H. We seek your approval to transfer ownership of the aforementioned property to Mr./Ms. ................... of Saudi nationality, under Civil Registration No. ....................... on the condition that the property is mortgaged to the financing company/bank ................ as collateral for an outstanding amount of .................. SAR (amount in words) under Financing Contract No. .......... dated / / 14 H, approved by the Sharia Board of the financing company/bank under No. .................. dated / / 14 H. Please note that the Sharia Board's approval is still valid and has not been amended or revoked. The execution of this contract, which establishes the debtor's liability, has been or will be carried out according to the Sharia Board's decisions. The debt will be repaid in .......... monthly installments, each amounting to ............... SAR (amount in words), payable on the ............ of each Hijri/Gregorian month, starting from / / 14 H. In case of non-payment, the property will be sold in accordance with the enforcement regulations.
Therefore, we kindly request that you document the mortgage. May Allah protect and care for you ،،،
Representative of the Financing Company / Bank
Form 2 (Property Owned by the Mortgagor)
To His Excellency, the Chief Notary of ............... May Allah protect him
Peace be upon you, and the mercy and blessings of Allah,To proceed:
We inform you that the individual/citizen/organization/company ........................... under Register No. (................) dated / / 14 H, has outstanding dues to the financing company/bank amounting to(Only ................... SAR) under Financing Contract (................) No. (........) dated / / 14 H, approved by the Sharia Board under No. ( ) dated / / 14 H. Please note that the Sharia Board's approval is still valid and has not been amended or revoked. The execution of this contract, which establishes the debtor's liability, has been or will be carried out according to the Sharia Board's decisions. The debt will be repaid in ( ) monthly installments, each amounting to ( ) (SAR), payable on the ( ) of each Hijri/Gregorian month, starting from / / 14 H. The aforementioned party has mortgaged the described property as collateral for these dues, according to the terms outlined in the mortgage contract. In case of non-payment, the property will be sold in accordance with enforcement regulations.
Therefore, we kindly request that you document the mortgage. May Allah protect and care for you ،،،
Representative of the Financing Company / Bank
Form 3 (Property Owned by a Third Party, Sold to the Company, Then Sold to the Client and Mortgaged)
Property Sale and Mortgage Registration Form (Murabaha)
To His Excellency, the Chief Notary of ............... May Allah protect him
We inform you that the individual/citizen/organization/company: ......................, under Register No. ....................... owns the property according to the deed issued by your office No. .................... dated / / 14 H. The mentioned party wishes to sell the described property to the financing company/bank .............. under Commercial Register No. ........................... dated / / 14 H, for a price of .................. SAR (amount in words). The financing company/bank has accepted this sale and then resold it on deferred terms for ...................... SAR (amount in words) to Mr./Ms. ..................... of Saudi nationality, under Civil Registration No. ....................., and accepted this sale on the condition that the mentioned property be mortgaged to the financing company/bank.............................. as collateral for the outstanding dues amounting to ................... SAR (amount in words) under Murabaha Contract No. ................. dated / / 14 H, approved by the Sharia Board under No. .............. dated / / 14 H. Please note that the Sharia Board's approval is still valid and has not been amended or revoked. The execution of this contract, which establishes the debtor's liability, has been or will be carried out according to the Sharia Board's decisions. The debt will be repaid in ............... monthly installments, each amounting to ................. SAR (amount in words), payable on the ........ of each Hijri/Gregorian month, starting from / / 14 H. In case of non-payment, the property will be sold in accordance with enforcement regulations.
Therefore, we kindly request that you document the sale and mortgage. May Allah protect and care for you،،،
Representative of the Financing Company / Bank
Incident Documentation Form
Referring to SAMA Circular No. 381000089828 dated 28/8/1438 H, which mandates banks and financing companies to register mortgage agreements in accordance with the fact of the contract, to cease procedures related to property ownership transfer instead of mortgaging it, and to rectify the status of properties currently registered in the bank's name within a period not exceeding 3 years, while also informing clients of these changes.
We inform you that it has been impossible for us to execute the mortgage due to the following incident:
Notary Office Location Name of the Notary Transaction Registration Number and Date at the Notary Office Deed Number and Date Type of Financing Real Estate Financier (Bank or Financing Company) - SAMA reviewed the mentioned request and found it compliant with the relevant regulations and instructions of the institution.
- Attached to the form is a copy of the letter addressed to the Notary Office.
Representative of SAMA
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Without prejudice to the terms of use of SAMA website Hereby, you acknowledge that any illegal, unauthorized use and/or any breach of any of these provisions may result in legal actions against you.
Your access and use of SAMA Regulatory Rulebook and its content is considered as an acceptance and approval of commitment by you without any limitation or condition to the following:
SAMA Regulatory Rulebook is a platform that aims to assist the regulated entities to access SAMA regulatory content adeptly and efficiently.
SAMA Regulatory Rulebook is still on its development and soft launch stage. SAMA is not liable for its contents and does not warrant or represent that (the Services related to the platform, information or material presented in the platform) is displayed free of any inaccuracies, omissions, or errors (“Faults”). SAMA accepts no liability for any loss, claim or damage resulting from any use of the platform, and any decisions made, or actions taken based on the information contained in or generated by the platform.
SAMA Regulatory Rulebook has no legal effect and it does not aim to amend or revoke any legal provisions. The Rulebook still Contains some documents under review, including translated versions. Therefore, SAMA Regulatory content circulated through SAMA official channels remains in force.
Without prejudice to the terms of use of SAMA website Hereby, you acknowledge that any illegal, unauthorized use and/or any breach of any of these provisions may result in legal actions against you.