Decennial Liability in UAE Construction

The decennial regime is strict, joint, and cannot be excluded by contract

UAE law imposes a ten-year strict liability on contractors and supervising architects for structural defects in buildings and permanent constructions. This regime, known as decennial liability, is one of the most employer-protective provisions in the region. The new Civil Code (Federal Decree-Law No. 25 of 2025), effective 1 June 2026, retains the regime and introduces changes to subcontractor recovery, hardship, and employer remedies for defective work that every contractor, developer, and insurer operating in the UAE needs to understand.

• Ten-year strict liability applies from handover. Under the current Civil Code (Federal Law No. 5 of 1985, Articles 880-883) and the new Civil Code (Federal Decree-Law No. 25 of 2025, Articles 812-839), contractors and supervising architects or engineers are jointly liable for total or partial collapse and for defects that threaten the stability or safety of a building for ten years from completion. This is strict liability. The employer does not need to prove negligence or breach of contract.
• The liability cannot be excluded or limited by contract. Article 882 of the current Civil Code (and its equivalent in the new code) voids any agreement that purports to exclude or reduce decennial liability. The parties can extend the period beyond ten years, but cannot shorten it.
• Soil defects and employer consent are not defences. The liability arises even if the defect originates from a problem with the land itself, or if the employer consented to the method of construction. The GCAA and UAE courts have applied this position consistently.
• A three-year limitation period applies on top. A claim must be brought within three years of discovering the defect, but this window can extend the total exposure beyond the ten-year mark if a defect is discovered late in the period.
• The new Civil Code clarifies subcontractor recovery. For the first time, Federal Decree-Law No. 25 of 2025 expressly preserves the main contractor's right of recourse against subcontractors, but confirms that strict decennial liability does not extend to recovery actions. The contractor must establish fault or breach of contract to recover downstream.

Who this applies to

This article is for contractors, developers, project owners, design consultants, and their insurers involved in UAE construction projects. It applies to residential, commercial, and infrastructure works, including buildings, bridges, roads, water canals, and other permanent installations. Construction lawyers in Dubai advising on FIDIC contracts, bespoke contracts, or EPC agreements should treat decennial liability as a baseline risk that overrides contractual limitation clauses.

For a full overview of the UAE construction law framework including contract formation, delay claims, termination, and the 2026 reforms, see our complete guide to UAE construction law.

The legal framework: current and new

Construction contracts in the UAE are governed by the muqawala provisions of the Civil Transactions Law. Under the current code (Federal Law No. 5 of 1985), these are Articles 872 to 896. Under the new Civil Code (Federal Decree-Law No. 25 of 2025), they move to Articles 812 to 839. The new code takes effect on 1 June 2026 and repeals the 1985 law.

The decennial liability regime sits within these provisions. It is a mandatory provision of UAE law and applies regardless of what the contract says. Even if a FIDIC contract sets a defects notification period of 12 or 24 months, the statutory ten-year liability applies in parallel.

The principal legislation:

• Federal Law No. 5 of 1985 (Civil Transactions Law, current, in force until 31 May 2026), Articles 880-883
• Federal Decree-Law No. 25 of 2025 (new Civil Transactions Law, effective 1 June 2026), Articles 812-839
• Dubai Law No. 6 of 2019 (Ownership of Jointly Owned Real Property in Dubai), Article 40
• Dubai Law No. 7 of 2025 (contractor registration framework, effective 8 January 2026)

What triggers decennial liability

Two categories of defect trigger the regime:

Total or partial collapse. If the building or structure collapses in whole or in part within ten years of handover, the contractor and supervising architect are jointly liable. This includes roof collapse, failure of a section of the building, or subsidence that renders the structure unusable.

Defects threatening stability or safety. A defect need not cause actual collapse. If it threatens the structural integrity or safety of the building, decennial liability applies. UAE courts have treated these as "trigger events" and have interpreted them to include faults in foundations, load-bearing walls, columns, support beams, and other structural elements.

The regime covers permanent constructions. Temporary structures such as scaffolding, formwork, and site offices are excluded. Infrastructure civil works including roads, bridges, water canals, and sewage systems fall within scope.

Defects that do not affect structural integrity or safety are not covered by decennial liability, but may give rise to separate contractual or tortious claims under general provisions of the Civil Code. These include plumbing failures, electrical defects, finishing issues, and mechanical system problems that do not compromise the building's structure.

Who bears the liability

Under Article 880(2) of the current Civil Code, the contractor and the supervising architect or engineer are jointly liable. Liability is apportioned on the basis of each party's contribution to the defect.

The regime applies to:

• Main contractors
• Design consultants who supervised the works
• Developers (under Dubai Law No. 6 of 2019, Article 40, which extends decennial liability to developers for jointly owned property)

Subcontractors are not directly liable to the employer under the decennial regime. The main contractor is responsible for the structural integrity of the entire project, regardless of which subcontractor performed the defective work. The main contractor cannot shift this liability to the employer by pointing to a subcontractor's error.

The new subcontractor recovery provision

Under the current Civil Code, there was no express statutory basis for a contractor to recover against subcontractors on a decennial liability theory. The question of whether the contractor could invoke the strict liability regime downstream was unresolved.

The new Civil Code (Federal Decree-Law No. 25 of 2025) settles this. It expressly preserves the contractor's right of recourse against subcontractors for their contribution to a decennial liability event, but states that the strict liability provisions do not apply to such recovery actions.

This means a contractor that has been held liable under the decennial regime and wants to recover from a subcontractor must prove fault or breach of contract, establish causation, and bring the claim within the applicable limitation period. The commercial limitation period is five years, which is shorter than the ten-year decennial period. A contractor facing a decennial claim in year eight or nine may find that the limitation clock for recovery against the subcontractor has already expired.

For contractors and their insurers, this creates a practical mismatch: ten years of exposure upward, five years of recovery rights downward. The Kennedys analysis on this point advises early and proactive recovery strategies, including preserving evidence and commencing recovery actions well before the limitation period expires.

Limitation periods: the three-year window

Article 883 of the current Civil Code states that a claim for compensation under the decennial regime must be brought within three years of the occurrence of the collapse or the discovery of the defect. This is a distinct limitation period, separate from the ten-year liability period.

The interaction between the two periods is significant. If a structural defect is discovered in year nine after handover, the employer has until year twelve to bring a claim. The three-year limitation window can therefore extend the contractor's exposure beyond the nominal ten-year period.

The decennial period itself is not subject to suspension or interruption. Unlike ordinary limitation periods under the Civil Code, it runs continuously from the date of handover regardless of court proceedings or unforeseen events. The three-year limitation period for bringing a claim, by contrast, may be subject to suspension in certain circumstances.

What is not a defence

UAE courts have narrowed the available defences in decennial liability claims. The following are specifically excluded:

Soil defects. Article 880(2) states that liability applies even if the defect arises from a defect in the land itself. The contractor is expected to conduct proper soil investigations before commencing work.

Employer consent. Liability applies even if the employer consented to the construction of the defective building or installation. The employer's acceptance of the works at handover does not discharge the contractor from decennial liability.

Handover in good condition. UAE courts have held that handover of a building in apparently acceptable condition does not exempt the contractor from liability for latent defects that materialise later within the ten-year period.

Force majeure is one of the few recognised defences. If the defect resulted from an extraordinary, unforeseeable, and unavoidable external event, the contractor may be relieved of liability. The burden of proof rests with the contractor, and UAE courts apply this defence narrowly.

The new Civil Code: other changes affecting defects liability

Federal Decree-Law No. 25 of 2025 introduces several provisions beyond the subcontractor recovery clarification that affect the defects liability landscape.

Hardship exception for lump-sum contracts. Where exceptional general circumstances arise that were unforeseeable at the time of contracting and substantially upset the contractual balance, the dispute resolution forum is now expressly empowered to restore that balance. The tribunal can extend the completion period, increase or decrease remuneration, or terminate the contract on fair terms. This is a broader power than courts had under the existing code, which applied the doctrine of changed circumstances more restrictively.

Termination for convenience. The new code introduces a statutory right for employers to withdraw from a contract before completion, provided the contractor is compensated for expenses, completed work, and lost profit. This right was recognised by UAE Courts of Cassation under the old code but was not codified. The new provision gives it an express statutory basis.

Defective work remedies during execution. If defective work is identified during the construction period, the employer can issue a formal warning with a correction period. If the contractor fails to remedy the defect, the employer may terminate or appoint another contractor at the defaulting contractor's expense, without necessarily requiring prior court approval. This codifies a practical remedy that was previously dependent on judicial intervention.

Notice obligations. Article 816(3) of the new code requires the contractor to notify the employer immediately if events or circumstances arise that may impede proper execution. Failure to give notice may result in the contractor bearing the consequences of the event. The code does not define what constitutes adequate notice, and interpretation will develop through court practice.

Insurance and risk management

Decennial liability insurance is available in the UAE market but is not mandatory. The UAE Insurance Authority had considered mandating it, but the requirement has not been implemented. The high cost of ten-year tail coverage has limited uptake, particularly among smaller contractors.

For contractors and design consultants, professional indemnity insurance with long-tail coverage that expressly covers decennial liability is the primary risk transfer mechanism. Policies should address latent structural defects, design failures, and the full ten-year period from handover. Standard annual PI policies may not extend to decennial claims that arise years after the policy period ends.

For a detailed treatment of insurance requirements in UAE construction contracts, see our article on insurance in construction contracts.

Interaction with FIDIC contracts

FIDIC contracts widely used in the UAE (Red Book, Yellow Book, Silver Book) include a defects notification period, typically 12 or 24 months from taking-over. This contractual mechanism operates alongside, but does not replace, the statutory decennial regime.

A FIDIC defects notification period governs the contractor's obligation to remedy defects discovered and notified during that window. Once the period expires, the employer issues a performance certificate discharging the contractor from further contractual defects obligations.

Decennial liability operates independently. Even after the performance certificate is issued, the contractor remains exposed to statutory claims for structural defects for the balance of the ten-year period. Employers can and do bring claims years after the FIDIC defects period has closed, relying on the Civil Code rather than the contract. For contractors, this means that a clean performance certificate does not end the liability story.

For more on FIDIC claims and time-bar risks in the UAE, see our article on FIDIC claims and missed deadlines.

What the decennial regime means for buyers of completed buildings

Decennial liability is treated under UAE law as a contractual obligation owed by the contractor and architect to the employer. Subsequent purchasers of the building may be considered third parties to that contract.

Where the building has been sold, the purchaser can pursue a decennial claim, but the path is less direct. The purchaser may need to establish the conditions of wrongful conduct, the loss sustained, and the causal link. In cases involving jointly owned property in Dubai, Law No. 6 of 2019 extends the developer's decennial obligation to unit owners, providing a statutory basis for claims by individual purchasers against the developer.

Buyers conducting due diligence on completed buildings should request copies of handover certificates, structural completion dates, and any outstanding defect notices. The handover date determines when the ten-year clock started, and remaining exposure under the decennial regime should be factored into the acquisition price and risk allocation.

What contractors and developers should do before 1 June 2026

The new Civil Code takes effect on 1 June 2026. Contractors, developers, and design consultants should review their current practices against the changes.

• Review subcontract terms. The new subcontractor recovery provision means main contractors can pursue subcontractors for decennial liability contributions, but only on a fault basis and within the five-year commercial limitation period. Subcontracts should include express provisions on defects responsibility, indemnification for decennial claims, and obligations to preserve evidence. For guidance on subcontract risk allocation, see our article on how UAE energy subcontracts allocate risk.
• Secure long-tail insurance. PI and decennial liability insurance should run for the full ten-year period from handover. Annual policies that expire before the decennial period ends leave a gap.
• Document everything at handover. The handover date starts the clock. Clear, signed handover records, condition surveys, and defect schedules protect all parties.
• Implement a notice protocol under the new code. Article 816(3) imposes a duty to notify the employer of events that may impede execution. Contractors should adopt a formal written notice process from 1 June 2026 onward.
• Factor the limitation mismatch into claims strategy. Ten years of exposure upstream, five years of recovery rights downstream. Contractors and their insurers should commence recovery proceedings against subcontractors early, without waiting for the employer's decennial claim to crystallise.

How should UAE construction firms manage decennial liability exposure in 2026?

The decennial regime is one of the most consequential features of UAE construction law. It cannot be contracted away, caps cannot hold against judicial adjustment, and the strict liability standard leaves little room for defence. The new Civil Code preserves the regime intact while adding clarity on subcontractor recovery, hardship, and employer remedies that will shape how disputes are framed from June 2026 onward.

Contractors that treat decennial liability as a post-handover problem rather than a pre-contract planning item are the ones that discover ten-year exposure only when a claim arrives. The cost of structured legal support, proper insurance tail, and robust subcontract documentation is modest compared to a single structural defect claim on a major project.

For contractors, developers, and project owners managing construction risk in the UAE, our construction law team provides structured support across defects management, insurance review, claims strategy, and the practical implications of the new Civil Code.

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