When Buildings Go Wrong: How UAE Law Addresses Construction Defects and Contractor Liability

When a construction project is completed, employers expect their investment to be built to appropriate standards and to be free from defects. In practice, however, defects in materials and workmanship are a common source of disputes in the UAE construction industry. A construction defect is any deviation from the contract specifications, approved plans or accepted construction standards that affects the quality, durability or safety of the works.

Under Article 875 of Federal Law No. 5 of 1985 concerning the issuance of the Civil Transactions Law of the United Arab Emirates (the Civil Code), liability for defects is primarily a contractual matter. Construction contracts should clearly specify quality standards for materials, workmanship requirements, inspection procedures, the defects liability period and the contractor’s remedial obligations. Where a contract is silent, UAE law provides default protections.

Article 15 of Dubai Local Order No. 3 of 1999 concerning the regulation of construction works in the Emirate of Dubai (the Local Order) requires that material specifications used in construction comply with Dubai Municipality standards. In addition, the Dubai Building Code 2021 sets out mandatory technical requirements for all structural elements and construction practices. These requirements form the minimum baseline applicable to all construction projects in Dubai.

Where a contractor supplies materials, the contractor is fully responsible for their quality and suitability. Under Article 543 of the Civil Code, materials must be free from defects, save for minor issues that fall within normal industry tolerances. Contractors must select materials that are appropriate for their intended purpose and ensure compliance with Dubai Municipality standards.

Unlike some jurisdictions, UAE law does not automatically imply warranties of “good and workmanlike” performance. Instead, Article 875 of the Civil Code provides that, in the absence of an express agreement on material quality, the contractor must comply with prevailing industry practice and custom. The Federal Supreme Court has confirmed that contractors must perform the works in accordance with what was agreed and in line with established practice. Liability arises where a contractor fails to meet specifications, demonstrates technical incapacity, selects unsuitable materials or fails to perform to the standard of an ordinarily competent contractor.

In addition to contractual obligations, UAE law imposes statutory duties. In supply-only arrangements, Article 242 of the Civil Code places a presumption on the contractor that materials must be free from defects, except for minor imperfections. If supplied materials differ from what was agreed or are defective, the buyer may reject them where the defect renders the materials unfit for their intended purpose. In other cases, courts may award compensation reflecting the difference between the agreed quality and what was supplied. Intentionally misrepresenting the quality, origin or specifications of materials may constitute a criminal offence and can also give rise to civil liability.

One of the most significant protections under UAE law is decennial liability, established by Article 880 of the Civil Code. This imposes a ten-year liability on contractors and supervising engineers for defects affecting the structural integrity, safety or stability of a building. The ten-year period runs from the date of handover or completion and cannot be excluded by contract. Decennial liability covers defects that threaten the building’s solidity or security, including foundation failures, structural cracking, defects in load-bearing elements and concrete deterioration.

Contractors are also required to comply strictly with approved plans and applicable building standards. Article 14 of the Local Order mandates that construction works be carried out in accordance with the approved plans, drawings and permit conditions, and in line with applicable engineering and technical practices. Any deviation constitutes a breach of the contractor’s obligations.

Article 877 of the Civil Code provides that contractors must complete the works in accordance with the contract. Where works are defective or breach agreed conditions, the employer may require the contractor to remedy the defects within a reasonable period. If rectification is impossible, the employer may seek termination of the contract. Where a contractor, despite notice, fails to remedy defects within an agreed or reasonable timeframe, the employer may apply to the court for cancellation of the contract or authorisation to appoint another contractor at the original contractor’s expense.

Supervising engineers appointed by property owners also bear responsibility for quality and compliance. Article 19 of the Local Order provides that the engineer is jointly liable with the contractor where the engineer expressly or implicitly approves defective works. Implicit approval includes a failure to issue instructions to stop or rectify violations. As a result, both the contractor and the supervising engineer may be held liable for construction defects.

Where a contractor fails to remedy defects within a reasonable period after proper notice, the employer may appoint a third-party contractor to carry out the remedial works and recover the associated costs from the original contractor. Article 883 of the Civil Code entitles employers to claim compensation for losses arising from defects, including repair costs, loss of use or rental income, temporary accommodation expenses, diminution in property value and costs incurred in pursuing the claim.

If defects are so serious that repair is impossible, the employer may apply to the court for termination of the contract. Following termination, the employer is entitled to payment for properly completed works, compensation for defective works and the costs of appointing another contractor to complete the project. Although termination typically requires court approval, delays can increase losses. For this reason, UAE courts have, in urgent cases, permitted employers to take immediate action and seek retrospective court approval.

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