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Mortgage And Security Agreement for Saudi Arabia

Mortgage And Security Agreement Template for Saudi Arabia

A comprehensive legal document governed by Saudi Arabian law that creates a security interest in real property to secure the performance of financial obligations. The agreement must comply with Shariah principles and Saudi regulations, including the Real Estate Law and Commercial Mortgage Law. It details the terms and conditions of the mortgage, the rights and obligations of all parties, enforcement mechanisms, and includes specific provisions for registration with relevant Saudi authorities. The document incorporates Islamic finance principles and addresses both the commercial and Shariah requirements for creating and enforcing security interests in Saudi Arabia.

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What is a Mortgage And Security Agreement?

The Mortgage and Security Agreement is a crucial document in Saudi Arabian real estate financing and secured lending transactions. It is used when a party (mortgagor) needs to provide security over real property to secure financial obligations to a lender (mortgagee). The agreement must be structured to comply with both Shariah principles and Saudi regulations, particularly the Real Estate Law (Royal Decree No. M/6) and Commercial Mortgage Law (Royal Decree No. M/75). This document is essential for various transactions including commercial property financing, residential mortgages, and development project funding. It contains detailed provisions for the creation, perfection, and enforcement of security interests, along with specific requirements for registration with Saudi authorities. The agreement is particularly important in the context of Islamic finance, where conventional mortgage structures must be adapted to meet Shariah requirements regarding interest (riba) and uncertainty (gharar).

What sections should be included in a Mortgage And Security Agreement?

1. Parties: Identification of the mortgagor, mortgagee, and any other relevant parties

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

3. Definitions: Key terms used throughout the agreement, including Arabic legal terms where relevant

4. Creation of Mortgage: Express provisions creating the mortgage and security interest in compliance with Saudi law

5. Secured Obligations: Description of the obligations being secured, including principal, profits, and other amounts

6. Representations and Warranties: Mortgagor's confirmations regarding ownership, authority, and property status

7. Property Details: Detailed description of the mortgaged property and its documentation

8. Registration and Perfection: Requirements and procedures for registering the mortgage with relevant authorities

9. Covenants: Mortgagor's ongoing obligations regarding the property and maintenance of security

10. Insurance: Requirements for takaful/insurance coverage of the mortgaged property

11. Events of Default: Circumstances constituting default and their consequences

12. Enforcement: Rights and remedies upon default, compliant with Saudi enforcement regulations

13. Power of Attorney: Appointment of mortgagee as attorney for enforcement purposes

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Confirmation of Saudi law application and relevant courts

What sections are optional to include in a Mortgage And Security Agreement?

1. Security Agent Provisions: Required when multiple lenders are involved, detailing the security agent's role and powers

2. Additional Security Rights: Used when additional forms of security are being created alongside the mortgage

3. Assignment and Transfer: Include when rights to assign or transfer the mortgage need to be addressed

4. Intercreditor Provisions: Required when multiple creditors have interests in the same property

5. Further Assurance: Optional provisions for additional documentation or actions that may be required

6. Currency Provisions: Include when dealing with international transactions or multiple currencies

7. Costs and Expenses: Detailed breakdown of cost responsibilities when needed beyond standard provisions

What schedules should be included in a Mortgage And Security Agreement?

1. Property Schedule: Detailed legal description of the mortgaged property, including title deeds and plans

2. Form of Registration Application: Template for mortgage registration with relevant authorities

3. Form of Power of Attorney: Template for power of attorney required for registration and enforcement

4. Insurance Requirements: Detailed specifications for required takaful/insurance coverage

5. Form of Notice: Standard forms for various notices under the agreement

6. Secured Obligations Details: Detailed breakdown of the secured obligations and payment terms

7. Required Authorizations: List of required governmental and regulatory approvals

8. Property Valuation Report: Recent valuation report of the mortgaged property

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions










































Clauses

































Relevant Industries

Banking & Financial Services

Real Estate

Islamic Finance

Construction & Development

Commercial Property

Residential Property

Infrastructure

Healthcare (for medical facilities)

Hospitality

Industrial & Manufacturing

Retail

Relevant Teams

Legal

Real Estate

Finance

Risk Management

Compliance

Islamic Banking

Property Management

Corporate Affairs

Credit Administration

Security & Collateral Management

Relevant Roles

Legal Counsel

Real Estate Manager

Finance Director

Credit Risk Manager

Compliance Officer

Islamic Finance Specialist

Property Manager

Corporate Lawyer

Banking Operations Manager

Real Estate Development Director

Mortgage Officer

Chief Legal Officer

Transaction Manager

Security Trustee

Property Rights Registrar

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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