Real Estate Mortgage Agreement Template for Saudi Arabia

The Real Estate Mortgage Agreement is a critical document used in Saudi Arabia when securing financing against real property. It serves as the primary security document in real estate financing transactions, whether for commercial or residential purposes. The agreement must comply with the Saudi Real Estate Mortgage Law, SAMA regulations, and Shariah principles, making it distinct from conventional mortgage agreements used in other jurisdictions. It includes detailed provisions for property description, secured obligations, enforcement rights, and registration requirements with Saudi authorities. This document is essential for financial institutions providing real estate financing, property developers seeking funding, and individual property owners engaging in Shariah-compliant property transactions. Recent reforms under Saudi Vision 2030 have modernized the framework for real estate mortgages, requiring careful attention to regulatory compliance while maintaining Shariah principles.

1. Parties: Identification of the mortgagor (property owner), mortgagee (financial institution), and any other relevant parties with their full legal details as required under Saudi law

2. Background: Context of the mortgage agreement, including reference to the main financing agreement and Shariah compliance declaration

3. Definitions: Definitions of key terms used throughout the agreement, including technical terms required by Saudi law and Islamic finance principles

4. Grant of Mortgage: Core provision establishing the mortgage right over the property in compliance with Saudi Real Estate Mortgage Law

5. Property Details: Comprehensive description of the mortgaged property including title deed details and registration information

6. Secured Obligations: Description of the obligations secured by the mortgage, including the principal amount and profit rate (avoiding conventional interest terminology)

7. Representations and Warranties: Mortgagor's declarations regarding property ownership, authority to mortgage, and compliance with Shariah principles

8. Covenants: Ongoing obligations of the mortgagor regarding property maintenance, insurance, and compliance with relevant laws

9. Registration Requirements: Provisions regarding mortgage registration with relevant Saudi authorities and associated procedures

10. Events of Default: Circumstances constituting default and their consequences under Saudi law

11. Enforcement Rights: Mortgagee's rights upon default, compliant with Saudi Enforcement Law

12. Costs and Expenses: Allocation of costs related to mortgage creation, registration, and enforcement

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: Confirmation of Saudi law application and jurisdiction of Saudi courts

15. Execution: Signature requirements and attestation procedures as per Saudi law