When planning to purchase property in Dubai using a mortgage loan, a potential buyer must understand the associated risks, including the possibility of losing ownership if they are unable to make timely mortgage payments. This process is regulated by Dubai's mortgage legislation and the civil law of the UAE.
According to the laws, if the borrower (mortgagor) fails to repay the mortgage loan to the lender (bank or financial institution), the lender has the right to initiate the procedure for selling the mortgaged property after notifying the borrower through a Notary Public Power of Attorney within 30 days. This corresponds to Article 25 of Law No. 14 of 2008.
Dubai's mortgage law states that in case of failure to fulfill debt repayment obligations or the occurrence of a condition requiring early repayment, the lender or its successor may initiate recovery and forced sale procedures for the mortgaged property, provided that the debtor or the property owner has been notified at least thirty days in advance through a notary.
If the borrower does not repay the mortgage debt within the specified period, the bank can file a claim with the enforcement court demanding the seizure and sale of the mortgaged property through a public auction, following the procedures of the Dubai Land Department. This is stipulated in Article 26 of the Dubai Mortgage Law.
If the debtor, their successor, or guarantor fails to pay the debt on time, the judge of the execution cases, upon the lender's request, issues an order to seize the mortgaged property for sale at a public auction in accordance with the procedures of the Dubai Land Department.
However, the borrower or the person who provided the property as collateral may apply to the enforcement court to postpone the public auction. The court may grant such a request only once and for a period of up to 60 days, if it is convinced that either the borrower can repay the remaining debt within these additional 60 days, or that immediate sale would lead to significant financial losses for the borrower. This right is granted in accordance with Article 27 of the Dubai Mortgage Law.
Furthermore, if the borrower does not repay the remaining mortgage loan, the property will be sold at an auction conducted by the relevant auction authority within the grace period, based on the court decision, according to Article 28 of the Dubai Mortgage Law.
Additionally, Article 1327 of Federal Decree-Law No. (25) of 2025, which approves the UAE Civil Code, stipulates that a mortgagee may initiate recovery and sale procedures for the mortgaged property if the debt is unpaid after the due date, following notification to the debtor and property owner, and after completing legal procedures in the competent court in accordance with current legislation.
Thus, based on the provisions of the Dubai Mortgage Law and the UAE Civil Code, if the borrower fails to repay the mortgage loan, the lender can file a lawsuit in the Dubai Court to sell the mortgaged house through a public auction conducted by any auction authority. It is recommended to seek independent legal advice in the UAE.
Tourism leaders note that Dubai's hospitality sector is ready for a recovery in the coming months as air travel returns to near-normal capacity, despite temporary disruptions following the ceasefire signed in mid-June.
Hassan Malik, Managing Partner and Head of Sports and Tourism at Deloitte Middle East, stated that provided the current situation completely ceases, he expects hotel occupancy in Dubai to recover within three to six months. This forecast is based on the normalization of flight schedules to the region.
According to Malik, leisure demand is usually the fastest segment of the industry to begin recovering, and he anticipates stable growth, with the recovery process itself proceeding confidently.
Although it is too early to assess changes in booking volumes due to the lack of real-time data, the tourism leader believes that the overall sentiment will improve. He noted that UAE airlines are already offering free travel insurance for visitors to the country, and he believes that recent news will only strengthen future booking volumes.
Malik emphasized that not only the volume of bookings matters, but also how Average Daily Rates (ADR) might recover and when this will happen, expecting them to follow a similar trajectory. According to Universidad Europea, ADR is one of the most important performance indicators, providing a clear picture of the average revenue generated from occupied rooms over a specific period.
While the Deloitte partner acknowledged that some tourists may remain cautious, Tim Gordon, CEO of Radisson Hotel Group for the Middle East and Southeast Asia regions, expressed hope for a gradual return of confidence. He stated that the company remains optimistic about Dubai's tourism prospects for the next six to twelve months, as the city has created one of the most resilient tourism ecosystems in the world, combining leisure, corporate travel, events, and family tourism.
However, Gordon added that the rest of the year will depend on the stability of the ceasefire, which in turn will determine the reaction of the hospitality industry. He concluded that expectations for the second half of the year will likely be cautiously optimistic rather than radically revised overnight.
