Barclays sells first foreclosed property in Dubai

Barclays Plc, which had won the first foreclosure order in Dubai in 2010, has successfully sold a property at a public auction recently held by Dubai Land Department (DLD), Emirates 24|7 can reveal.

A Barclays spokesperson, in an emailed statement, said: “Dubai's law, Mortgage Law No 14 of 2008 of the Emirate of Dubai, is an important piece of legislation for the development of the real estate industry in Dubai. We are pleased with the successful conclusion of the foreclosure process.”
 
Informed sources say the foreclosed property, which was a villa in the Springs community, was put up for auction in April this year at a reserve price of Dh1.2 million by the DLD. It is understood to be sold for Dh1.22 million.
 
Sources added, however, this was not the first property for which Barclays had won a foreclosure order in January 2010.
 
Under Law No. 14 concerning mortgages in Dubai, upon default of a loan, the bank must give the borrower 30 days notice through the notary public before commencing execution proceedings. The execution judge then reviews the case and may issue a debt judgment, which requires the property to be turned over to the DLD for auction. During this period, creditors have the right to administer mortgaged property and collect its yields and revenue until it is sold at public auction.
 
Last month, this website reported that nearly 200 foreclosure cases are being currently dealt by Dubai Courts and the rate and frequency is likely to increase.
 
“Most of the conventional banks have claims and we understand that there may well be around 200 foreclosure cases coming through the courts at the moment,” Michael Dark, Senior Legal Consultant, Dispute Resolution, Hadef and Partners, said.
 
In their recent newsletter, the law firm said that although the Mortgage Law has been in effect for three years, its application and effectiveness is yet to be tested possibly because the Dubai real estate market is still fairly depressed.

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