Table of Contents
- What Changed Under the New UAE Civil Transactions Law?
- What Is a Latent Defect Under UAE Law?
- When Does the One-Year Deadline Begin?
- Can the Parties Agree to a Longer Warranty Period?
- What Remedies Are Available to the Buyer?
- Is the Seller Liable Without Knowing About the Defect?
- When Might the Seller Not Be Liable?
- Can a Buyer Lose the Right to Return the Asset?
- Is Immediate Notice to the Seller Required?
- What Must the Buyer Prove in a Latent-Defect Claim?
- What Should a Buyer Do After Discovering a Hidden Defect?
- Do the Latent-Defect Rules Apply to Property Purchases?
- Latent Defects and Decennial Liability Are Not the Same
- Does the New One-Year Period Apply to Older Sales?
- What Should UAE Sellers and Businesses Review?
- How HHS Lawyers Can Assist With Latent-Defect Disputes
- Frequently Asked Questions
- Conclusion
Buyers in the UAE now have a longer period to pursue claims when goods, property or other purchased assets contain hidden defects that could not reasonably have been identified before delivery.
Under Federal Decree-Law No. 25 of 2025 Promulgating the Civil Transactions Law, a claim based on a latent defect generally cannot be admitted after one year from the day following delivery. This replaces the previous six-month period and gives buyers more time to identify defects that become apparent only after use, testing or technical inspection.
The extension does not mean that every problem appearing within one year automatically creates a successful claim. The buyer must still establish that the defect legally qualifies as latent, existed before delivery or resulted from a pre-existing cause, materially affected the value or intended use of the purchased item, and was not already known or reasonably discoverable.
Buyers should also act promptly after discovering a defect. Delaying inspection, continuing to alter or dispose of the purchased asset, or failing to preserve technical evidence can weaken the claim even when the one-year deadline has not expired.
What Changed Under the New UAE Civil Transactions Law?
The new UAE Civil Transactions Law came into force on 1 June 2026, replacing the previous Civil Transactions Law that had governed civil transactions since 1985.
Articles 493 to 510 now provide a more detailed framework governing warranties against latent defects in contracts of sale. The key changes and protections include:
- A clearer legal definition of a latent defect.
- An implied basis that the subject matter of a sale is free from defects.
- A right to return the defective subject matter of the sale.
- A right to retain it and seek a proportionate reduction in price.
- An opportunity for the seller to provide a defect-free equivalent.
- Liability for defects affecting value, utility or guaranteed qualities, even where the seller was unaware of the defect.
- A one-year claim period beginning from the day following delivery.
- An exception preventing a seller from relying on the deadline where the defect was fraudulently concealed.
The full legislation can be reviewed through the official UAE Legislation platform.
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What Is a Latent Defect Under UAE Law?
A latent defect is not simply any fault, damage or dissatisfaction identified after a purchase. Article 494 establishes specific characteristics that distinguish a latent defect from an obvious defect, ordinary wear or damage caused after delivery.
A defect may qualify as latent where it:
- Existed in the subject matter of the sale before the sale was completed.
- Arose while the item remained in the seller’s possession and before delivery.
- Could not be discovered through an ordinary inspection.
- Was not apparent to an ordinary person.
- Could only be identified by a specialist or technical expert.
- Could only become apparent through testing or continued use.
A fault appearing after delivery may also be treated as latent where evidence establishes that it arose from a cause already present before delivery.
Examples of Potential Latent Defects
Depending on the evidence and circumstances, latent-defect disputes may involve:
- Undisclosed accident damage or a concealed mechanical fault in a vehicle.
- An internal manufacturing defect in machinery or commercial equipment.
- Electrical, plumbing or waterproofing defects concealed within a property.
- Defective materials that fail only after normal use or testing.
- An asset that lacks a quality expressly guaranteed by the seller.
- A fault that substantially reduces the asset’s market value.
- A defect that makes the purchased asset unsuitable for its agreed purpose.
By contrast, visible damage, a condition clearly disclosed before the sale, ordinary deterioration, improper use by the buyer or damage caused after delivery will not ordinarily satisfy the latent-defect requirements.
When Does the One-Year Deadline Begin?
Article 510 states that a warranty claim relating to a defect will not be admissible after one year has elapsed from the day following delivery of the subject matter of the sale.
This distinction is important because the deadline generally runs from delivery rather than from the date on which the buyer discovers the problem.
For example, where delivery takes place on 10 July 2026, the statutory period begins on 11 July 2026. A buyer who discovers the defect several months later does not ordinarily receive a fresh one-year period beginning from the discovery date.
The precise delivery date should therefore be established using evidence such as:
- A handover or delivery certificate.
- A property completion or possession record.
- A signed vehicle delivery form.
- A purchase invoice or receipt.
- Shipping and logistics records.
- An installation or commissioning report.
- Registration or ownership-transfer records.
- Emails or messages confirming that possession was transferred.
Where the parties dispute when legal delivery occurred, the wording of the contract and the manner in which the asset was placed at the buyer’s disposal may become central to the case.
Can the Parties Agree to a Longer Warranty Period?
Yes. The one-year period is not intended to reduce a longer warranty expressly provided by the seller. Article 510 preserves a warranty period exceeding one year where the seller has undertaken to provide one.
Examples may include:
- A two-year vehicle warranty.
- A three-year machinery or equipment warranty.
- A longer contractual defects-liability period.
- A developer’s express warranty covering specified property components.
- A manufacturer’s extended fitness or performance guarantee.
The contract must be reviewed carefully to determine what the longer warranty covers, when it begins, what exclusions apply and whether the buyer must follow a specific notification or inspection procedure.
What Remedies Are Available to the Buyer?
Article 495 provides two principal options where a qualifying latent defect is established.
Return the Defective Asset
The buyer may seek to return the subject matter of the sale. In practical terms, this may involve rescinding the transaction, returning the asset and recovering the price, subject to the applicable facts, contractual provisions and court determination.
Returning the asset may be appropriate where the defect is serious, substantially affects its purpose or makes continued ownership commercially unreasonable.
Retain the Asset and Seek a Price Reduction
The buyer may keep the purchased asset and claim a reduction in the price proportionate to the effect of the defect.
Determining the appropriate reduction may require technical or valuation evidence addressing:
- The asset’s value in the condition represented by the seller.
- Its actual value in the defective condition.
- The cost and feasibility of repair.
- The expected reduction in useful life.
- The extent to which the intended use has been impaired.
- Any permanent reduction in resale or market value.
Provision of a Defect-Free Equivalent
Article 495 also provides that the seller may avert the return or price-reduction remedy by supplying a defect-free equivalent of the subject matter of the sale.
This provision should not be described simply as an unrestricted right of the buyer to demand any replacement. Whether the seller’s proposed equivalent is genuinely defect-free and equivalent in specification, condition, age, value and intended use may itself become disputed.
Is the Seller Liable Without Knowing About the Defect?
A seller’s lack of knowledge does not automatically remove liability.
Under Article 496, the seller may be responsible where, at delivery:
- The asset lacks a quality that the seller guaranteed would be present.
- The defect diminishes its value.
- The defect reduces its utility for the purpose stated in the contract.
- The defect prevents the use ordinarily expected from the nature of the asset.
The article expressly states that the seller may be liable even if the seller was unaware that the defect existed.
Knowledge becomes particularly important, however, where the buyer alleges deliberate concealment or fraud. Proof of fraudulent concealment may prevent the seller from relying on the one-year deadline.
When Might the Seller Not Be Liable?
The new law also protects sellers from claims involving disclosed, accepted or reasonably discoverable defects.
Depending on the circumstances, the seller may not be liable where:
- The defect was disclosed to the buyer at the time of sale.
- The defect was customarily tolerated for that type of asset.
- The buyer accepted the defect after inspecting or learning about it.
- The buyer purchased the asset while already knowing about the defect.
- The defect arose after delivery and did not result from a pre-existing cause.
- The sale took place through a judicial or administrative auction.
- The parties validly agreed to exclude liability for a particular defect, subject to applicable mandatory laws.
A liability exclusion may not protect a seller who deliberately concealed the defect through fraud. The effectiveness of an “as is,” “as seen” or warranty-exclusion clause therefore depends on the wording of the agreement, the nature of the defect, the buyer’s opportunity to inspect and the seller’s conduct.
Can a Buyer Lose the Right to Return the Asset?
Yes. Even where a latent defect exists, the buyer’s actions after discovering it can affect the available remedies.
For example, Article 499 provides that the buyer’s option based on the defect may be forfeited if the buyer, after becoming aware of the defect, disposes of the asset as an owner.
The right to return the asset may also be affected where:
- The buyer sells or transfers it after discovering the defect.
- The buyer grants a third-party right over the asset.
- A new defect occurs while the asset is in the buyer’s possession.
- The asset is materially altered before the seller can inspect it.
- Repairs destroy evidence of the original defect.
- The buyer expressly or implicitly accepts the defective condition.
A buyer should therefore obtain legal and technical advice before selling, extensively repairing, modifying or otherwise disposing of the disputed asset.
Is Immediate Notice to the Seller Required?
The general one-year claim deadline should not be treated as permission to wait for one year before notifying the seller.
The contract may impose much shorter notification periods. In addition, Article 502 establishes a specific rule where the seller has warranted that the asset will remain fit for use for a defined period.
If a defect appears during that guaranteed period, the buyer must notify the seller within one month from the defect’s appearance, unless the parties agreed to a longer notification period.
Where the seller fails to repair the defect, the buyer may, depending on the circumstances, seek rescission with compensation or retain the asset and pursue compensation for the resulting damage.
Buyers should send a properly drafted notice as soon as the defect is identified. The notice should ordinarily describe:
- The purchased asset and contract.
- The delivery date.
- When and how the defect became apparent.
- The effect of the defect on value or use.
- Any safety or operational concerns.
- The evidence currently available.
- The remedy requested from the seller.
- A reasonable deadline for inspection or response.
What Must the Buyer Prove in a Latent-Defect Claim?
Filing the claim within one year is only one part of the case. The buyer will generally need reliable evidence establishing the legal and technical basis of the claim.
Important issues normally include whether:
- The alleged fault is a genuine defect.
- The defect existed before delivery or arose from a pre-existing cause.
- An ordinary inspection would have revealed it.
- The seller disclosed the condition before the transaction.
- The buyer already knew about or accepted it.
- The defect materially reduced value or utility.
- The buyer’s use, negligence or alteration caused or worsened the problem.
- The requested refund, reduction or compensation is properly calculated.
Evidence That May Support the Claim
- The sale contract and incorporated terms.
- Advertisements, specifications and seller representations.
- Pre-purchase inspection reports.
- Handover and delivery documents.
- Photographs and videos.
- Technical inspection and laboratory reports.
- Maintenance and service histories.
- Repair estimates and invoices.
- Communications with the seller.
- Evidence of the asset’s represented and actual value.
- Witness evidence concerning disclosure and inspection.
Many latent-defect disputes cannot be resolved through documents alone. A court-appointed or privately instructed expert may be required to identify the origin, age, seriousness and financial effect of the defect.
What Should a Buyer Do After Discovering a Hidden Defect?
- Stop unnecessary use: Continuing to use the asset may worsen the damage or allow the seller to argue that misuse caused the problem.
- Record the condition: Take dated photographs and videos before repairs or alterations are made.
- Preserve the asset: Do not discard defective parts or components that may be required for expert inspection.
- Review the contract: Check warranty clauses, exclusions, notice requirements, governing law and dispute-resolution provisions.
- Confirm the delivery date: Calculate the one-year period from the day following legal delivery.
- Obtain technical evidence: Use an appropriately qualified expert to assess whether the cause pre-dated delivery.
- Notify the seller: Send a clear written notice identifying the defect and requested remedy.
- Avoid prejudicial actions: Do not sell, transfer or materially alter the asset before receiving advice.
- Consider settlement: Repair, replacement, price adjustment or rescission may be negotiated without full litigation.
- Commence proceedings in time: Discussions with the seller should not be assumed to stop or extend the statutory deadline.
Where the seller rejects responsibility or the deadline is approaching, advice from experienced litigation and dispute resolution lawyers can help determine the appropriate notice, evidence and legal proceedings.
Do the Latent-Defect Rules Apply to Property Purchases?
The provisions governing contracts of sale are not limited to ordinary retail goods. A latent-defect warranty may also become relevant where a buyer acquires real estate containing a concealed defect that existed before delivery and materially affects the property’s value or intended use.
Possible property-related disputes may involve concealed:
- Waterproofing failures.
- Persistent water leakage.
- Electrical defects.
- Plumbing defects.
- Defective air-conditioning systems.
- Material discrepancies from agreed specifications.
- Damage covered by finishes before handover.
- Defects affecting the property’s use or market value.
However, property-defect claims can involve overlapping legal and contractual frameworks. The correct claim may depend on whether the dispute concerns:
- A defect in the property sold by an owner or developer.
- A breach of the sale and purchase agreement.
- Defective work performed under a construction contract.
- A developer warranty.
- Building regulations or project-specific legislation.
- Decennial liability for structural integrity or collapse.
Buyers and owners facing property handover or construction-defect issues should obtain advice from lawyers experienced in UAE real estate disputes.
Latent Defects and Decennial Liability Are Not the Same
The new one-year rule under Article 510 should not be confused with the separate decennial-liability regime applying to the construction of buildings and fixed installations.
Under Articles 821 to 824 of the new Civil Transactions Law:
- The contractor and supervising engineer may be jointly liable for total or partial collapse occurring within ten years.
- The warranty also covers defects threatening the structural integrity and safety of the building or installation.
- The ten-year period generally begins when the employer takes delivery of the work.
- A clause attempting to exclude or limit this liability is void.
- The related claim is not admissible after three years from the collapse or discovery of the qualifying defect.
A minor non-structural defect, a defect in a purchased property and a serious structural construction defect may therefore be governed by different provisions and deadlines. The factual and contractual basis of the dispute must be identified before determining the correct limitation period.
Does the New One-Year Period Apply to Older Sales?
The new Civil Transactions Law became effective on 1 June 2026 and generally applies prospectively. Article 4 states that the law does not apply retrospectively to preceding acts and events unless otherwise provided.
However, Article 6 separately states that new provisions concerning the barring of claims by lapse of time apply, from their effective date, to periods that had not yet been completed.
The position may therefore require careful analysis where:
- The contract was signed before 1 June 2026.
- Delivery occurred before 1 June 2026.
- The former six-month period had begun but had not expired when the new law took effect.
- The defect was discovered before the new law but proceedings had not yet started.
- The contract contains its own warranty or claim deadline.
Parties should not assume automatically that either the former six-month period or the new one-year period applies. The contract date, delivery date, procedural history and transitional provisions should be reviewed together.
What Should UAE Sellers and Businesses Review?
The reforms are important not only for buyers but also for manufacturers, suppliers, developers, vehicle dealers, equipment sellers and other businesses entering contracts of sale.
Sellers should review:
- Product descriptions and technical specifications.
- Representations made during negotiations.
- Inspection and acceptance procedures.
- Delivery documentation.
- Warranty duration and scope.
- Defect-notification procedures.
- Repair and replacement rights.
- Valid exclusions of liability.
- Record-retention practices.
- Internal procedures for responding to complaints.
- Rights of recourse against manufacturers and suppliers.
Businesses should avoid broad statements guaranteeing quality, performance or fitness unless those statements accurately reflect the asset and the contractual warranty being offered.
Our commercial legal consultants in the UAE can review sale agreements, warranty provisions, supplier contracts and liability clauses in light of the new Civil Transactions Law.
How HHS Lawyers Can Assist With Latent-Defect Disputes
Latent-defect cases require fast coordination between legal analysis, technical evidence and procedural action. HHS Lawyers can assist buyers, sellers, property owners, developers and commercial businesses by:
- Reviewing the sale agreement and warranty provisions.
- Determining the applicable law and claim deadline.
- Assessing whether the defect satisfies the statutory requirements.
- Coordinating with technical and valuation experts.
- Preparing and serving legal notices.
- Evaluating return, price-reduction, replacement and compensation options.
- Responding to unsupported or exaggerated defect allegations.
- Negotiating repairs, settlements or contract rescission.
- Representing clients in UAE court proceedings.
- Advising on real estate and construction-related defect claims.
Discovered a hidden defect in property, machinery, a vehicle or another purchased asset? Seek legal advice before the evidence changes or the applicable deadline expires.
Frequently Asked Questions
How long do I have to file a latent-defect claim in the UAE?
Under Article 510 of the new Civil Transactions Law, a claim for warranty relating to a defect is generally not admissible after one year from the day following delivery. A longer period may apply where the seller provided a longer contractual warranty.
Does the one-year period begin when I discover the defect?
Generally, no. Article 510 calculates the period from the day following delivery, not from the date of discovery. This means a defect discovered late in the year may leave the buyer with very little time to prepare and commence the appropriate proceedings.
What must qualify as a latent defect?
The defect must ordinarily have existed before delivery or resulted from a cause already present before delivery. It must also be hidden from ordinary inspection and may be one that only an expert, testing process or subsequent use could reveal.
Can I return the defective item?
Article 495 allows the buyer to return the subject matter of the sale where a qualifying latent defect is established. The right may be affected by the buyer’s knowledge, acceptance, subsequent use, alterations, disposal of the asset or the occurrence of another defect while it is in the buyer’s possession.
Can I keep the asset and claim part of the price back?
Yes. The buyer may retain the asset and demand a reduction in price proportionate to the defect. Expert valuation may be required to determine the difference between the represented value and the actual defective value.
Can the buyer demand a defect-free replacement?
Article 495 states that the seller may avert the buyer’s return or price-reduction remedy by providing a defect-free equivalent. Whether a proposed replacement is genuinely equivalent may depend on its specifications, age, condition, value and intended purpose.
Can the seller be liable without knowing about the defect?
Yes. Article 496 provides that the seller may be liable even if unaware of a defect that diminishes value or utility or where the asset lacks a quality the seller guaranteed would be present.
Does an “as is” clause prevent a latent-defect claim?
Not necessarily. The law recognises certain exclusions, but the wording and circumstances must be reviewed. A seller cannot rely on an exclusion or the one-year deadline where fraudulent concealment is established. Other mandatory legislation may also affect the validity of the clause.
What happens if the seller concealed the defect?
Article 510 prevents a seller from relying on the one-year period where it is established that the seller concealed the defect through fraud. Strong evidence of the seller’s knowledge and concealment will normally be required.
Does the one-year deadline cover structural building defects?
Not in every case. Serious defects threatening a building’s structural integrity may engage the separate decennial-liability provisions under Articles 821 to 824. These include a ten-year warranty period and a three-year period for bringing a claim after collapse or discovery of the qualifying structural defect.
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Conclusion
The new UAE Civil Transactions Law gives buyers additional time and clearer remedies when a purchased asset contains a genuine latent defect. The extension from six months to one year is significant, but it is not a one-year period beginning from discovery and does not eliminate the need for immediate action.
A buyer must still prove that the defect was hidden, pre-existing or caused by a pre-existing condition, and sufficiently serious to affect the asset’s value, utility or guaranteed qualities. The buyer must also preserve evidence, comply with contractual notice requirements and avoid conduct that could remove the right to return the asset.
Because ordinary sale warranties, contractual guarantees, property disputes and decennial liability can involve different rules and deadlines, each defect claim should be assessed on its particular contract, evidence and technical circumstances.
This article provides general information and does not constitute legal advice. The application of the new Civil Transactions Law depends on the facts, contractual terms, relevant special legislation and applicable transitional provisions.
Mohammed Farahat
Judicial Court Expert
HHS Lawyers – UAE Dubai
Research and Studies Center
Tel + 97142555496
