ADGM mortgage law under Part 9 of the RPR 2024 creates a charge-only regime that preserves the mortgagor's title while giving lenders robust enforcement rights — subject to strict procedural rules. Misstep on those rules and enforcement is void. This guide covers creation through foreclosure, with every section reference.
1. Creation — charge-only structure
An ADGM mortgage is a charge over property, not a transfer of title. (s.68) The mortgagor keeps ownership throughout. The equity of redemption — the right to recover the property free of the mortgage on repayment — is preserved and cannot be extinguished or restricted. Any clause in a mortgage deed that attempts to clog the equity of redemption is void. (s.68(2))
A valid mortgage must include: the property ID, the interest being secured, a description of the secured debt, and a maturity date. (s.67(1)) Missing the maturity date is a common drafting error that can invalidate the instrument on registration.
2. Registration and priority
Registration is mandatory and drives priority. First registered = first in priority under section 16. Fee scales with the secured value; variation registration fee scales with any increase in the secured amount. (s.69(4)) Register promptly — any gap between execution and registration is a window for competing interests to register ahead.
Search the folio for existing caveats, prior mortgages, restrictive covenants, and statutory charges before advancing. The existence of a caveat on the folio does not automatically block a prior mortgage from enforcing, but it flags a competing claim requiring investigation.
3. Default and enforcement procedure
| Step | Requirement | Section |
|---|---|---|
| 1. Serve cure notice | Written 30-day notice to: mortgagor, all guarantors, all other registered chargees | s.72(3)(a) |
| 2. Wait 30 days | If mortgagor cures — enforcement stops. No exceptions. | s.72(3)(a) |
| 3. Reem pre-2025 only | Apply to Court for enforcement order before proceeding | s.72(3)(b) |
| 4. Exercise powers | Sale, possession, receivership, or foreclosure | s.72(1) |
4. Enforcement powers on default
Once the cure window lapses without remedy, the mortgagee may exercise any of the following powers under section 72(1):
- Sell the property by auction, tender, or private treaty
- Sever and sell fixtures
- Sell easements appurtenant to the property
- Take possession and receive rents and profits
- Apply to Court to appoint a receiver
- Apply to Court for a foreclosure order
These powers are cumulative — the mortgagee may exercise more than one simultaneously. The most common path is sale, often combined with possession to secure the property during the sales process.
5. Duty on sale — market value obligation
Section 73 imposes a duty to take reasonable care to obtain market value at the time of sale. This is not best-price-at-all-costs — it is a reasonable-care standard — but it requires documented evidence: professional valuation, market testing (multiple bidders preferred), and proper sale conditions. A sale significantly below market without documented justification exposes the mortgagee to a claim by the mortgagor.
Crucially, section 74 allows the mortgagor to seek a Court injunction to halt the sale without first tendering the full redemption amount. This is a significant departure from some other jurisdictions. An injunction application is therefore a live risk even in a straightforward enforcement scenario.
6. Proceeds waterfall
| Priority | Payee | Basis |
|---|---|---|
| 1st | Discharge prior registered interests (or pay into Court if disputed) | s.76(a) |
| 2nd | Sale costs and expenses | s.76(b) |
| 3rd | Principal + interest + costs of this mortgage | s.76(c) |
| 4th | Later registered interests in priority order | s.76(d) |
| 5th | Residue to registered owner | s.76(e) |
Any disputed amounts should be paid into Court rather than held by the mortgagee. Paying residue to the wrong person creates personal liability.
7. Receiver
Section 77(3) requires Court appointment of a receiver — self-appointment is not permitted in ADGM. Once appointed, the receiver is treated as the mortgagor's agent, not the mortgagee's. If the receiver sells, the same reasonable-care market-value duty applies as if the mortgagee were selling directly. (s.77(4))
8. Foreclosure
Foreclosure vests the mortgagor's entire interest in the mortgagee upon Court order and registration. (s.78) All interests junior to the mortgage are extinguished. However, section 78(3) expressly preserves binding registered leases — tenants with registered leases survive the foreclosure and bind the new owner.
9. Tacking further advances
A prior mortgagee can advance additional funds with priority over later registered mortgages, but only if: (a) the original mortgage expressly authorises tacking, and (b) either the later mortgagee consents or had notice. (s.79) Build tacking authorisation into every ADGM mortgage — retrofitting it later requires a registered variation.
10. Statutory charges — the overlooked priority risk
Section 80 allows public authorities to create statutory charges that rank ahead of all registered interests, including prior first mortgages, if the underlying statute so permits. Lenders must check for any such charges during due diligence. These are not visible unless the specific statute creating them is reviewed — a folio search alone is insufficient.
| Lender red line | Consequence |
|---|---|
| Clogging equity of redemption | Clause void (s.68(2)) |
| Sale below market without justification | Mortgagor damages claim (s.73) |
| Failing to serve 30-day cure notice on all required parties | Enforcement void |
| Enforcing pre-2025 Reem mortgage without Court order | Registration of transfer blocked (s.75(1)) |
| Self-appointing receiver | Invalid — Court appointment mandatory (s.77(3)) |
This article is for general information only and does not constitute legal advice. For advice on a specific ADGM real property matter, please contact us. Last updated: 19 May 2026.