United Arab Emirates: UAE Law Proceedings On Latent Defects

Last Updated: 18 September 2019
Article by Saif Al Shamsi

When discovering an undisclosed defect on a property, after the sales contract has been signed, it is crucial to determine whether the defect is patent or latent.

A patent defect is an apparent flaw within the property, it can be disclosed easily by any prospective buyer such as a hole in a wall or damp walls. The prospective buyer can then bargain with the seller to repair the flaws or, alternatively reduce the property's price.

However, as defined by Article 544 of the UAE Civil Code: '' (4) A latent defect is one which cannot be observed by an external inspection of the goods, or which would not be apparent to the ordinary man, or which could not be discovered by any person other than an expert or which would only be apparent upon testing''.

By virtue of the construction contract, the contractor is potentially liable to the developer for latent defects, and by virtue of the property sale contract, a developer is liable to a purchaser for the same latent defects.

In 2013, a property was bought directly from a seller, after the sales contract has been signed, the buyer discovered a latent defect in the form of water leakage in several spaces of the property. The serious defect resulted in damaging the walls and floor, thus, preventing the buyer from using his property neither from housing, renting, nor selling. The buyer informed the property management requesting, several times, the repair of the latent defect, but in vain.

Article 247 of The Federal Law No. (5) of 1985 On the Civil Transactions stipulates that: '' In bilateral contracts, where the reciprocal obligations are due, each of the contracting parties shall have the right to abstain from executing his obligations in case the other party does not honor his obligations''. Despite the negative response of the property management to restore the water leakage, the buyer has, constantly and in good faith, remained to pay for the maintenance services of the property.

The property management has the obligation to repair any defect that affects the use and enjoyment of a sold property. If it fails to do so, the buyer shall have the right to apply for an order to effect the repair and recover the fair cost thereof as Article 282 of the UAE Civil Code specifies that: '' The author of any tort, even if not discerning, shall be bound to repair the prejudice".

According to the law, the buyer filed a lawsuit against the developer and its property management, demanding from the defendant to repair the damages and deliver the property free of defects, while providing him with a certificate of guarantee of such work. Moreover, requesting from the defendant to compensate him with a considerable amount as indemnification for the non-use of his property between 2013 and 2018, because the defect was serious and important enough to render the property unfit for its intended use. Furthermore, requesting from the defendant to compensate him for the profit loss upon the sale of the property, additionally to redress the total amount of the maintenance services to repair the latent defect. As stated by Article 293 of the UAE Civil Code ''(1) The right to have damage made good shall include moral damage, and any infringement of the liberty, dignity, honor, reputation, social standing or financial condition of another shall be regarded as being moral damage''; the plaintiff has also asked for the indemnification for moral damages, along with charging the defendant with redressing the attorney's fees.

The developer's defense upheld that the latter is exempted from any obligations towards the plaintiff based on tortious liability. Article 298 of the UAE Civil Code states that: ''(1) No claim for compensation arising out of a harmful act shall be heard after the expiration of three years from the day on which the victim became aware of the occurrence of the harm and of the identity of the person responsible for it. (2) Provided that if such claim arises out of a crime and the criminal proceedings are still current after the expiry of the time limit referred to in the foregoing paragraph, the claim for compensation shall not be barred''. For tort-based liability to be established, there must be three conditions: a breach of an obligation by the law, a loss sustained by a party, and causation between the breach and the loss.

As reported by the defendant, under the UAE Law a claim needs to be raised within three years from the date of cause of action is accrued which is the time the damage is suffered. Particularly, under the latent damage act, a claim under tort must be made within three years from the date of damage.

However, the plaintiff's defense asserted that the liability between the two parties is contractual, not tortious, since the plaintiff bought the property from the previous owner through a sales contract, with a title deed issued by Dubai Land Department, therefore, Article 298 of the UAE Civil Code shall not be applicable. For contractual liability to apply, three conditions must apply a breach of contract by one of the parties, a loss sustained by the other party, and a causal link between the breach and the loss. If one of these three conditions is not respected, the victim shall demand compensation. Moreover, under the Latent defect, a claim under contractual liability must be made within 15 years from the date of damage, and no claim for compensation shall be heard in any case upon the expiration of fifteen years from the day on which the harmful act took place. Thereby, the Court acknowledged the existence of a contractual liability between the two parties and obliged the defendant to pay AED 350.000, plus interest, as compensatory damages, along with obliging the defendant to redress the plaintiff's attorney's fees. Nevertheless, the plaintiff lodged an appeal, with the aim of obtaining a much more important compensation, worthy to repair the pecuniary and moral damage suffered from the latent defect for five years.

How can The Legal Group help when discovering a latent defect?

Alike the above-mentioned case, The Legal Group has won numerous real estate disputes, by dint of the extensive experience of its lawyers, defending the rights of its clients. TLG can assist you to protect and enforce your rights to serve your best interests.

Discovering latent defects is an unpleasant event because it occurs after the sales contract has been signed. The buyer who has disclosed a latent defect in his property shall claim damages, or reduction in the purchase price which will be calculated by the loss of value of the property from the latent defect, or from the cost of repairing it, the buyer can also ask for the cancellation of the deed of sale and nullification of the contract.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions