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    What happens to a mortgage if the property is destroyed?

    Ali Faizan Syed1 min read0 viewsUpdated 1/2/2026
    Under Article (13), if a mortgaged property is totally destroyed or becomes defective, the mortgage is not lost. Instead, the Mortgage transfers to any substitute property or insurance compensation that replaces the original asset. The mortgagee maintains their right to enforce the debt against this new asset according to the original rank of the mortgage. This legal continuity ensures the creditor's protection even in the event of a catastrophic loss of the physical collateral.

    Related Topics:

    Property Destruction
    Substitute Collateral
    Mortgage Security
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