In UAE construction projects, the completion of works does not mean the end of a contractor’s responsibility. Even after handover, the law imposes ongoing obligations to ensure that the works are free from defects. This post‑completion phase is known as the Defects Liability Period (DLP) , a critical protection for employers and a significant legal obligation for contractors.
Understanding how the DLP works under UAE law helps both parties manage risk, resolve defects efficiently, and avoid disputes.
What Is the Defects Liability Period
The Defects Liability Period is a contractual period following the handover of a project during which the contractor remains responsible for rectifying defects that appear in the works. Most construction contracts in the UAE, including FIDIC‑based agreements, include a DLP of 12 months, although the parties may agree to a different duration.
During this period, the contractor must return to the site, investigate reported issues, and carry out necessary repairs at their own cost.
Contractual vs. Statutory Liability
The UAE recognises two types of post‑completion liability:
- Contractual Defects Liability
This is the DLP agreed between the parties in the construction contract. It covers defects that arise due to workmanship, materials, or failure to comply with specifications. The employer must notify the contractor of defects, and the contractor must remedy them within a reasonable time.
- Statutory Decennial Liability
Separate from the DLP, UAE Civil Code imposes a 10‑year liability on contractors and architects for structural defects or collapse affecting the stability or safety of the building. This liability applies even if the contract is silent and cannot be waived.
The DLP and decennial liability operate independently, and both may apply depending on the nature of the defect.
What Types of Defects Are Covered
During the DLP, the contractor is responsible for defects such as:
- Poor workmanship
- Use of defective or non‑compliant materials
- Failure to meet contractual specifications
- Mechanical, electrical, or plumbing issues
- Finishing defects
- Operational issues caused by installation errors
The key requirement is that the defect must arise from the contractor’s work, not from misuse, lack of maintenance, or third‑party interference.
Employer Rights During the DLP
Employers benefit from several protections during the Defects Liability Period. They may notify the contractor of defects at any time during the DLP. They may require the contractor to repair defects at no additional cost. They may withhold retention money until defects are rectified. They may appoint a third party to fix defects if the contractor fails to act and recover the cost.
These rights ensure that the employer receives a project that meets the agreed standards.
Contractor Obligations During the DLP
Contractors must respond promptly to defect notifications, carry out repairs within a reasonable timeframe, ensure that remedial works do not disrupt operations, and bear the cost of all repairs related to their workmanship or materials.
Failure to fulfil these obligations may expose the contractor to claims, deductions, or legal action.
Retention Money and the DLP
Most UAE construction contracts include retention money, typically 5 to 10 percent of the contract value, which is withheld by the employer to ensure performance. Half is usually released upon handover, and the remaining half is released after the DLP expires and all defects are rectified.
Retention serves as financial security to ensure the contractor fulfils their DLP obligations.
What Happens When the DLP Ends
Once the DLP expires and all defects have been addressed, the employer issues a Final Completion Certificate and releases the remaining retention. However, if structural or major safety‑related defects appear later, the contractor may still be liable under the 10‑year decennial liability.
The end of the DLP does not eliminate all future obligations.
Why the DLP Matters
The Defects Liability Period is essential for both parties. For employers, it ensures quality assurance and protection against post‑handover issues. For contractors, it provides a structured process for addressing defects and closing out the project properly.
A clear understanding of the DLP helps prevent disputes and ensures that the project performs as intended.
Conclusion
The Defects Liability Period is a vital component of UAE construction law, balancing the rights of employers with the responsibilities of contractors. Whether you are delivering a project or receiving one, understanding the DLP and how it interacts with statutory decennial liability , is essential for managing risk and ensuring long‑term project integrity.
Our team at Ayesha Al Dhaheri Advocates and Legal Consultants advises developers, contractors, and consultants on construction obligations, defect claims, and dispute resolution. If you need guidance on DLP clauses, decennial liability, or post‑completion disputes, we are ready to assist with clear and practical legal support.