Procedural Requirements for Mortgage Documentation and the ...

Procedural Requirements for Mortgage

Documentation and the Related Forms

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Procedural Requirements for Mortgage Documentation and the Related Forms:

I: The borrower or his/her representative authorized by power of attorney to act on his/her behalf

must be present.

II: The lender (bank or finance company) representative authorized by power of attorney to act on its

behalf must be present.

III: The lender must be a bank or a finance company licensed by SAMA to engage in real estate finance

activities.

IV: The mortgaged property must be owned by the borrower or a real guarantor presenting the

property to be mortgaged for the interest of the debtor even without the latter’s permission.

V: The mortgaged property must be defined and existing or likely to exist, and it must be legally

saleable.

VI: The lender must prove that the contract made with the borrower does not contradict Islamic Sharia

by providing a letter from the Sharia Committee authorizing the product, and not authorizing each

contract separately.

VII: Property conveyance and mortgage must be carried out in a single procedure pursuant to the

Ministry of Justice circular No. 13/C/6973 dated 19/1/1439H issued on mortgage corrections.

VIII: The forms prepared by the Saudi Arabian Monetary Authority (SAMA) and Ministry of Justice must

be used.

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Form 1 (Property Owned by Finance Company)

President of (….) Notary Public,

(….) Bank/Company, with commercial register No. (….), owns the property by notarial deed No. (….)

dated / / 14H, and wishes to approve the conveyance of the said property to Mr/Mrs (….), Saudi, with

national ID No. (….), provided that the said property is mortgaged for (….) finance company/bank as

security on a loan of SAR (….) (amount in words) under (type of finance) contract No. (….) dated / /

14H, authorized for the finance company/bank by Shariah Committee authorization No. (….) dated / /

14H, which shall be valid unless amended or canceled, and that the implementation of this specific

contract creating the debt to the client has been or will be carried out according to the decisions of

the Shariah Committee and not otherwise. Payment of loan shall be made in (number) monthly

instalments of SAR (….) (amount in words) payable on (date) of every Hijri/Gregorian month as of / /

14H. In case of default, the property shall be sold in accordance with the Implementation Law.

Therefore, this form is submitted for the documentation of the mortgage.

Representative of the Finance Company/Bank

Form 2 (Property Owned by Borrower)

President of (….) Notary Public,

Mr/Mrs (….) Institution/Company, with register No. (….) dated / / 14H, owns property No. (….) by

notarial deed No. (….) dated / / 14H, and owes the finance company/bank SAR (….) (amount in words)

under (type of finance) contract No. (….) dated / / 14H, authorized by Shariah Committee authorization

No. (….) dated / / 14H, which shall be valid unless amended or canceled, and that the implementation

of this specific contract creating the debt to the client has been or will be carried out according to the

decisions of the Shariah Committee and not otherwise. Payment of loan shall be made in (number)

monthly instalments of SAR (….) (amount in words) payable on (date) of every Hijri/Gregorian month

as of / / 14H. Thus, the said name/institution/company has mortgaged the property described above

as security on the loan in accordance with the conditions contained in the mortgage contract. In case

of default, the property shall be sold in accordance with the Implementation Law.

Therefore, this form is submitted for the documentation of the mortgage.

Representative of the Finance Company/Bank

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Form 3 (Third Party Property Sold to a Company, then Sold to a Client and Mortgaged)

Real Estate Sale and Mortgage Registration Form (Murabaha)

President of (….) Notary Public,

Mr/Mrs (….) Institution/Company, with register No. (….), owns the property by notarial deed No. (….)

dated / / 14H, and wishes to sell the property described above to (….) finance company/bank under

commercial register No. (….) with a total value of SAR (….) (amount in number), and the finance

company/bank accepts the purchase and sells the said property to Mr/Mrs (….), Saudi, with national

ID No. (….), who accepts the purchase, provided that the said property is mortgaged for the finance

company/bank as security on a loan of SAR (….) (amount in words) under Murabaha contract No. (….)

dated / / 14H, authorized by Shariah Committee authorization No. (….) dated / / 14H, which shall be

valid unless amended or canceled, and that the implementation of this specific contract creating the

debt to the client has been or will be carried out according to the decisions of the Shariah Committee

and not otherwise. Payment of loan shall be made in (number) monthly instalments of SAR (….)

(amount in words) payable on (date) of every Hijri/Gregorian month as of / / 14H. In case of default,

the property shall be sold in accordance with the Implementation Law.

Therefore, this form is submitted for the documentation of the mortgage.

Representative of the Finance Company/Bank

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Documentation Form

In reference to SAMA circular No. (381000089828) dated 28/08/1438H requiring banks and finance

companies to document mortgages in accordance with the reality of the contract, stop taking property

transfer procedures instead of mortgage procedures, make corrections to properties currently

registered under the name of the bank within a period not exceeding 3 years, and inform clients of

such action,

mortgage is denied according to the following information:

Notarial office

Name of notary public

Number and date of notary public transaction

Number and date of deed

Type of finance

Real estate lender (bank or finance company)

SAMA has reviewed the request and confirmed its conformity with SAMA laws and instructions.

A copy of the letter forwarded to the Notary Public shall be attached to the form.

Representative of the Saudi Arabian Monetary Authority