Understanding Developer Liability for Maintenance & Defect Costs After Property Handover

Introduction:

The importance of investing in off-plan properties, particularly jointly owned properties in Dubai, lies in understanding the developer’s obligation to maintenance and defect rectification after handing over. Dubai Law No. 6/2019 on the Ownership of Jointly Owned Properties increases the obligations and responsibilities of a property developer toward the owners, detailing their rights and duties after the handover of the property. In this article we will investigate the developer’s liability and the duration of the liability. Understanding your rights as a property owner is crucial, and obtaining legal advice in Dubai can help ensure developers meet their post-handover obligations.

Key Provisions Under Dubai Law No. 6/2019 – Structural Defects
Article 40(a) of Dubai Law No. 6/2019 specifies that developers may liable for any defects in the structural parts of a jointly owned property, for a period of 10 years from the date the developer obtains the completion certificate for the project. The key structural elements of a building, including foundation, walls, and columns are considered structural parts critical to the safety and stability of a building. And in the case that such defects, within these areas, are found within the 10-year period, the developer has to fix or repair at no extra cost to the owner of the property. This guarantees that the owners are protected from bearing the financial burden relating to any structural issue that may arise after taking possession of their unit. With experience in real estate disputes, the best law firms in the UAE can assist property owners in claims related to structural defects and developer obligations.

Mechanical, Electrical and Other Installations:

In addition to structural defects, developers are also responsible for the repair or replacement of defective installations within the property for a year from the date of handover of the unit to the owner. Such installations include major systems including mechanical, electrical, plumbing and sewerage installations.

Otherwise, if the owner refuses to take possession of the property for whatever reason, this one-year liability period is counted from the date the completion certificate is issued. Hence, owners must be aware that such one-year warranty shall be commenced from the date of official completion of the project, regardless of the actual handover date.

Breach of Contract and Consumer Protection Under the UAE Civil Code:

These rights of the buyers are further supported by the Federal Law No. 5/1985 (the UAE Civil Code). Particularly, Article 569 specifies that developers must deliver properties exactly as agreed in the SPA. In the event that the delivered unit does not match the agreed size and specifications, a buyer is, under the law, entitled to demand rectification or even cancel the SPA.

Further, Articles 572 and 574 of the Civil Code protect purchasers against developers who might offer smaller or substandard units. Buyers can sue for either contract modification or rescission of the sale if the developer does not make good on these within a reasonable time period. If developers or management entities fail to fulfill their duties, experienced property lawyers in Dubai can guide owners through legal remedies and dispute resolution.

Maintenance and Repair Responsibilities Common Areas and Facilities:

While the developer is responsible for initial construction and defect rectification, the ongoing maintenance and repair of common areas and facilities in jointly owned properties are normally taken care of by the Management Entity. Article 35 of Dubai Law No. 6/2019 permits the Institute of Control and Joint Ownership to serve notices upon the Management Entity to perform the required maintenance works. If this has not been carried out by the Management Entity, the Institute can appoint a third party to carry out the repairs and deduct the costs from service fees.

To ensure that damages arising from neglect in the maintenance of common areas and facilities shall be repaired, it is provided that the Management Entity shall provide the Department with a bank guarantee in accordance with Article 36. The bank guarantee provides a type of security, whereby in case of the failure of the Management Entity to perform its obligations, there will be funds available to undertake repairs and maintenance.

Sanctions To Developer and Management Entities

The law provides clear recourse if a developer or Management Entity fails to meet their legal obligations. In the event of a developer failing to provide documents for registration of a project with the Department within the time frame in Article 6 of Dubai Law No. 6/2019, the Department can appoint another party to provide these documents at the expense of the developer himself. Where a Management Entity has failed in its maintenance obligation, the Institute may intervene to ensure that the property is duly maintained and kept serviceable.

Conclusion:
Dubai Law No. 6/2019 and the UAE Civil Code provide the property owners the strong safeguards against defects and maintenance issues after taking possession of their units. Knowledge of such provisions is very important for a property owner or investor in Dubai to ensure his rights are protected and that he can take timely action in case defects or maintenance issues arise.