To link to this article, copy this persistent link:
(Jul 12, 2012) On July 2, 2012, the Council of Ministers of the Kingdom of Saudi Arabia approved five laws organizing the lending process, loan purchase and sale transactions, mortgage registration, and foreclosure for real estate. The executive regulations for these laws will be issued 90 days from the publication of the laws in the official gazette. Mortgages will be based on the Islamic lease model known as al Ajarah.
The new legislation is designed to create a legal mechanism to fund the housing sector in the Kingdom. The laws are supposed to preserve the rights of creditors as well as debtors, in accordance with Islamic regulations on commercial transactions.
According to news reports and investor statements, many economic sectors will witness considerable improvement due to the passage of the new mortgage legislation. For instance, it is anticipated that the banking sector will earn unprecedented revenues from the increase in lending transactions, and that insurance companies will gain profits from private mortgage insurance policies. Economic analysts also expect that construction companies will have higher earnings because of the increased need for construction services due to incentives offered by these laws. (Saudi Arabia Approves a Real Estate Mortgage System [in Arabic], Al Arabiya (July 2, 2012).)
- Author: George Sadek More by this author
- Topic: Real property More on this topic
- Jurisdiction: Saudi Arabia More about this jurisdiction
Search Legal News
Find legal news by topic, country, keyword, date, or author.
Global Legal Monitor RSS
Get the Global Legal Monitor delivered to your inbox. Sign up for RSS service.
The Global Legal Monitor is an online publication from the Law Library of Congress covering legal news and developments worldwide. It is updated frequently and draws on information from the Global Legal Information Network, official national legal publications, and reliable press sources. You can find previous news by searching the GLM.
Last updated: 07/12/2012