Developers’ Decennial Liability in the UAE towards the owners of the properties

A 10-year liability is imposed upon developers, contractors, engineers, and architects as a matter of UAE law. It relates to any building intended to stand for 10 years or more. This decimal liability is coverage of the structural component of the property.

The structural component of the property means, according to Law No. (6) of 2019 Concerning Ownership of Jointly Owned Real Property in the Emirate of Dubai, the main supports, foundations, columns, structural walls, ceilings, ceiling joists, staircases, stairwells, façades, and roofs.

The Decennial Liability under the UAE law.

Under UAE laws, developers, designers, and contractors are jointly liable to pay compensation for any total or partial collapse of a building and/or any defect affecting the stability or safety of a structure.

Article 40 of Law No. (6) of 2019 Concerning Ownership of Jointly Owned Real Property in the Emirate of Dubai, stipulated the following:

(Subject to the provisions governing contractor agreements, as stipulated in Federal Law No. (5) of 1985, The developer will remain liable, for a period of ten (10) years from the date of obtaining the completion certificate of the Real Property project developed by him, to remedy or rectify any defects in the structural parts of the Jointly Owned Real Property).

Article 880 of the Federal Law No. (5) of 1985 On the Civil Transactions Law stated the following:

(The developer shall remain liable for ten years or a longer agreed period to indemnify the owners for total or partial destruction of the building or fixed constructions and every defect endangering the solidity and security of the building).

The beneficiary of the decimal responsibility.

Under UAE laws, decennial liability is treated as a contractual duty and is therefore considered for the benefit of the employer, who has contractually engaged the contractor and architect. Liability has, in some instances, also been extended to general successors and assigns where the building has been sold to multiple owners.

The owners of the buildings might be considered third parties in relation to the main contractual relations between the employer and the contractors and architects. Therefore, owners are required to prove the requirements of a wrongful act, damages suffered by the third party, and those damages being caused by that wrongful act.

Facts and circumstances in such cases.

It is advisable to appoint a real estate expert to prepare an expert report that includes the value of the damages and the cost of fixing the damages, and then file a case at the Court by submitting the expert report as evidence in the case to claim the compensation as stipulated in the expert report.

The court might appoint another official expert to examine the property and review the first expert report, then issue a judgment to compensate the owner for the damages.

Insurance for decennial liability claims

Although insurance on such liability is an attractive option that should be considered by contractors and architects, decennial liability is often not covered because it is expensive.

The UAE Insurance Authority discussed making decennial liability insurance mandatory, however, this has not become enforceable as this might affect the cost of projects in the UAE.

Limitation of liability

UAE law does not allow the limitation of decennial liability. Article 882 of the UAE Civil Code specifically states, ‘Any agreement the purport of which is to exempt the contractor or architect from liability or to limit such liability, shall be void.

This is part of the tort provisions of the UAE Civil Code, which does not permit any limitation. Therefore, it is not an option for the developers, contractors, or architects to limit or exclude decennial liability.

Duration of liability and time for bringing a case

Decennial liability covers any total or partial collapse or defects discovered within 10 years following the handover of a project.

Separately, Article 883 of the UAE Civil Code provides that ‘No claim for compensation shall be heard after the expiration of three years. This means that the case must be filed within three years from the date of knowledge of the defect and during the 10 years from the handover date.

The cost of filing a decennial liability claim before court in UAE.

It is important for the plaintiff in such cases to consider the legal cost before filing the case in order to know whether the case is feasible or whether the legal costs will be more than the expected compensation.

In general, the costs of such cases are as follows:

  • The external expert fee of AED 15,000/- to AED 25,000/- for a property such as an apartment or a villa.
  • Court Fees of 6 % of the claim amount, limited to a maximum amount of AED 40,000/-
  • Second expert fee who might be appointed by the court of AED 15,000/- to AED 25,000/-
  • Professional fees for lawyers vary from one law firm to another, as it ranges from AED 25,000 to more than AED 100,000, depending on the law firm’s considerations and calculations.

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Rousan & Associate Legal Consultants LLC is perfectly positioned to represent and assist our clients in all claims and in providing legal advice.