Monday, November 08, 2010

Dubai Land Department to re-commence property auctions this month

The Dubai Land Department (DLD) is likely to get back to property auctions, including foreclosed properties from this month.

The Partner and Head of Real Estate, Nick Clayson, said that recent discussions with the DLD indicated the need to re-commence property auctions, including foreclosed property, with the increase in number of transactions being processed daily by the department, as the market stabilizes. The next property auction will begin in November.

Once the Dubai courts approve the property to be sold at public auction as per the Dubai Mortgage Law, the court will send the letter to

Once the Dubai courts approve the property to be sold at public auction as per the Dubai Mortgage Law, the court will send a letter to DLD, seeking to arrange for the property to be auctioned.

The department will then arrange for the auction based on the procedures and laws put forward by them. At present, the department has its own informal rules about auctions. However, a formal set of rules are likely to get effective in next few months, Clayson said.

As for reserving a price on the property, the department will arrange for a valuation of the property.

The Mortgage Law provides that in case the proceeds of the sale are insufficient to cover the debt, then the bank may claim the difference from the borrower. Also, the law permits a judge to postpone a sale by auction in case the borrower can repay the mortgage amount within a specified period or the sale of the mortgage property will cause the considerable damage to the borrower.

According to Clayson, with the market stabilizing and auctions re-commencing, the Dubai Courts will see an increase in litigation brought about by banks against borrowers in default.

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