SASJC 482/06/1999
Type
Case
Court
Saudi Arabian Supreme Judicial Commission
Jurisdiction
Saudi Arabia
Taxonomy
Lending & Security, Guarantees, General Real Property Law, General Contract Law
Copyright
LexisNexis
Decision date
7 Dec 1999
Catchwords
Informal contract – Guarantee – Mortgage – Transfer of title
This case involved a property owner who had transferred the ownership to land he had mortgaged to a lender to guarantee a loan. He had then asked to pay back the loan but the lender had refused to return the ownership of the property to him. The court declared the transfer was legally invalid as he contract was an informal one.
Background
A property-owner filed a case before the Riyadh Supreme Court against a lender who had given him 49,626,860 Riyals which was secured by mortgage of land he had purchased for 73,529,280 Riyals. The property-owner promised to pay the loan back after six months with a rate interest of five million Riyals or ten million Riyals if the payment was postponed for up to one year. The lender accepted these terms on the condition there would be a land ownership transfer to him as a mortgage guarantee. However; they refused to respect these terms when the landowner wanted to pay the loan and take his land back. They also denied the land owner's allegations and affirmed they had bought the land for this price.
Decision