By way of circular number 381000089828 dated 26/8/1438 H. (22/5/2017 G.), the Saudi Arabian Monetary Agency ("SAMA") has ordered banks to cease the practice of transferring the ownership of secured real estate into their name, as opposed to simply recording a mortgage on the same. SAMA has offered banks and financial institutions a three-year grace period to comply. SAMA has also requested that it be informed of any instance where a Public Notary refuses to record a mortgage on a real estate.
By way of background, a Registered Real Estate Mortgage Law was enacted in 2012 (pursuant to Royal Decree No. M/49 dated 13/8/1433 H. (3/7/2012 G.)) and requires that mortgages be registered. Before this enactment, Notaries Public were reluctant to register mortgages.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.