Foreclosure

Foreclosure is the legal process by which a lender seizes and sells mortgaged property following borrower default, recovering outstanding debt through forced sale proceedings administered by Dubai Courts.

Foreclosure ProcessTimeline
Payment default30-90 days missed payments
Formal noticeLegal demand for payment
Court filingLender initiates proceedings
Judgment2-4 months typical
Property salePublic auction or private sale
Total duration6-12 months minimum
UAE Legal FrameworkKey Provisions
Governing lawMortgage Law Federal Decree-Law No. 14 of 2008
Court jurisdictionExecution Court for mortgage claims
Sale proceedsDebt plus costs deducted
Deficiency judgmentBorrower liable for shortfall
Right of redemptionLimited once court sale ordered
Financial ConsequencesImpact
Credit scoreSevere negative for 5+ years
Sale discount20-40% below market typical
Additional liabilityFees, legal costs, interest
Future borrowingExtremely difficult


Related Terms

DefaultNon-Performing Loan (NPL)Distressed AssetMortgage DefaultNon-Performing Loan (NPL)Debt RecoveryCollateral

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