Wednesday, June 25, 2008

The Oman Law Digest 2009 - MORTGAGES

Under Omani law, mortgages, liens and pledges are valid and enforceable only if they are registered with the appropriate Ministry. Although Government debts and employees’ dues take priority over all other credits, registered mortgagees as secured creditors rank in priority after them.

COMMERCIAL MORTGAGE
Law of Commerce [RD 55/90] and Regulations for registration of commercial mortgages [MD 5/80 issued by MCI] regulate commercial mortgages. A commercial mortgage is the creation of a charge over tangible and intangible fixed and/or floating commercial assets, such as all moveable properties, raw materials, machinery, equipment, receivables, trademarks and other intellectual property rights and insurance policies. More than one charge may be created over commercial assets with the consent of the previous priority charge holder. Commercial mortgages must be registered with MCI.

Legal mortgage is a charge created over real estate property and is regulated by Land Law [RD 5/80], Usufruct Law [RD 5/81], Real Estate Registration Law [RD 2/98], and Regulations for registration of legal mortgages [MD 5/80 issued by Ministry of Housing, Electricity and Water]. Registration with the Ministry is evidenced by recording the charge as a notation on the Mulkhiya or title deed of the real estate property. A charge may also be created over usufruct rights, i.e., rights to utilise and develop land and lease.

Ship mortgage is also permitted under Omani law. Maritime Law [RD 35/81] provides for the creation, registration and enforcement of mortgage. Ship mortgage must be registered with Ministry of Transport and Communication.