Understanding Developer Liability in the UAE: Difference Between 10-Year Structural Defects and 1-Year Installation Defects

Buying a property in the UAE is a major investment, and one of the most common concerns among owners is what happens if defects or issues appear after handover. While many buyers assume that the developer is responsible for fixing any problems, liability depends on the type of defect and when it appears. UAE law provides two strong protective mechanisms for property owners:

1. A 10-year liability covering major structural defects that affect the safety or stability of the building.
2. A 1-year liability covering installation defects and workmanship issues within the unit or building.
   

These two liability periods operate independently and protect owners in different ways. The 10-year period focuses on long-term safety and structural integrity, while the 1-year period ensures that day-to-day issues and finishing problems are addressed promptly.

Understanding both is essential for owners, developers, homeowners’ associations, and investors. This article explains each liability period in a clear, accessible, and practical manner.

Legal Background


The rules governing developer and contractor liability arise primarily from the UAE Civil Transactions Law (Federal Law No. 5 of 1985, as amended). This legislation imposes strict obligations on contractors, supervising engineers, and developers in relation to structural safety.

In addition, most Sale and Purchase Agreements (SPAs) used by developers include a 1-year Defect Liability Period (DLP) covering non-structural defects. This period is widely applied and has become standard practice in the UAE real estate market.

Together, these two frameworks form the foundation of post-handover protection for property buyers.

1. The 10-Year Structural Liability (Decennial Liability)
   
   
   The 10-year structural liability, commonly referred to as decennial liability, is intended to protect owners from serious construction defects that affect a building’s stability. Under UAE law, this liability applies even if the defect was not visible at the time of handover.
   

Scope of Coverage


The 10-year liability covers:
a. Total or partial collapse of the building
b. Major structural cracks
c. Foundation failures
d. Defects in columns, beams, slabs, and other load-bearing elements
e. Any defect that compromises the safety or structural integrity of the building

The purpose of this liability is to ensure that buildings remain structurally sound and safe for occupation.

Duration and Mandatory Nature


This liability lasts for 10 years from the date of completion or handover, whichever occurs first.
It is a non-waivable obligation, meaning:
a. Developers cannot limit or exclude it through contractual terms
b. Owners may bring a claim at any time within the 10-year period

Who Is Liable?


Responsibility is shared between:
a. The contractor, who carried out the construction works
b. The supervising engineer, who designed and supervised the structure

Developers are generally included in claims, as they are the contracting party and ultimately accountable to buyers.

What Is Not Covered?


This liability does not extend to:
a. Normal wear and tear
b. Minor cosmetic cracks
c. Issues caused by the owner or tenant
d. Defects resulting from poor maintenance

The focus remains strictly on defects affecting structural safety.

1. The 1-Year Installation Defect Liability (DLP)
   
   
   The 1-year defect liability period is designed to cover everyday issues that arise shortly after moving into a new property. These matters typically relate to workmanship, installations, and the proper functioning of the unit.
   

Scope of Coverage

The DLP usually includes:
a. Mechanical, electrical, and plumbing (MEP) defects
b. HVAC and air-conditioning issues
c. Water leaks and drainage problems
d. Faulty doors, windows, fixtures, and cabinetry
e. Poor finishing or workmanship
f. Cracks, alignment issues, and fitting defects

These are the issues owners most commonly notice during the first months of occupation.

Duration and Contractual Basis


The DLP lasts for 12 months from handover, unless the SPA specifies a longer period. Unlike the 10-year liability, the DLP is contractual, meaning:
a. The terms are set out in the SPA and handover documents
b. The developer must respond to and remedy reported defects during this period
c. Owners must notify the developer within the 12-month window for defects to be covered

Developer’s Responsibilities


During the DLP, the developer must:
a. Repair or replace defective items
b. Rectify leaks, electrical faults, and HVAC issues
c. Ensure that all installations function correctly
d. Bear the full cost of labour and materials

Timely reporting by the owner is essential, as claims cannot be made once the DLP has expired.

Conclusion


The UAE provides robust protection for property owners through its two distinct liability periods. The 10-year structural liability ensures that buildings remain safe and structurally sound, offering long-term security to owners and investors. The 1-year installation defect liability ensures that immediate defects relating to workmanship and finishing are addressed promptly after handover.

 

Understanding these two frameworks allows owners to raise claims within the correct timeframes, enables developers to meet their obligations with clarity, and supports a transparent and reliable property market in the UAE. Together, these liability periods promote quality, safety, and trust in UAE real estate developments.

 

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