The UAE’s new Civil Transactions Law has reshaped the warranty landscape for property transactions. Here is what buyers, lessees, and mortgagees need to understand – and what sellers can no longer contract out of.
On 1 June 2026, UAE Federal Decree Law No. 25 of 2025 – the new Civil Transactions Law (CTL) – came into force, replacing the 1985 Law. For buyers, lessees, and mortgagees, the CTL introduces a set of mandatory protections that cannot be eroded by contract, however the documentation is drafted. For sellers and developers, certain clauses that were previously common practice are now void. Understanding where the lines fall is essential for anyone advising on or participating in UAE real estate.
The mandatory warranties buyers benefit from
Three core protections sit at the heart of the CTL’s approach to sale and purchase transactions.
The dispossession warranty (Articles 483 and 489) is perhaps the most fundamental. It is the seller’s mandatory promise that they actually own what they are selling, and that no third party will later emerge with superior rights to the property. The CTL makes this warranty non-negotiable: any clause that purports to exclude or diminish it is void as a matter of law. Critically, even if the buyer knew at the time of contracting that the seller was not the registered owner, this does not extinguish the buyer’s right to recover the purchase price. For off-plan transactions and intra-group transfers where title may not yet have vested in the selling entity, practitioners should verify registered title – or a valid authority from the registered owner – before exchange.
The latent defects warranty (Articles 496 and 510) is equally significant. A seller is liable for hidden defects in the property even if they had no knowledge of those defects at the time of sale. The limitation period is one year from the day following delivery, consistent with the position under Dubai Law No. 13 of 2008 (as amended) which similarly prescribes a one year warranty period for latent defects and a ten year period for structural defects, though parties may extend this by agreement. Importantly, where a seller has deliberately concealed a defect, the one-year period does not apply at all. In practice, the boundary between a “latent” defect (which triggers the warranty) and a defect that was “discoverable upon reasonable inspection” (which does not) can be highly fact-sensitive. A hairline crack concealed behind cladding will almost certainly be latent; a crack visible to the naked eye in an exposed wall may be treated as apparent, leaving a buyer who failed to inspect with reasonable care without a remedy.
The duty to disclose material information (Article 122(4)) is a third mandatory protection that applies both to sellers and developers. Any party who possesses information that is material and decisive to the other party’s decision to contract is under a statutory duty to disclose it. This duty cannot be limited, waived, or excluded by agreement. A clause in a sale and purchase agreement stating that the buyer accepts the property on the basis of the brochure alone, and waives any right to claim non-disclosure, will be of no effect. If a developer was aware of a change to the approved master plan, a pending compulsory acquisition order, or a known structural issue with the site, and failed to disclose it, the buyer may seek rescission regardless of any such waiver.
What sellers and developers cannot contract out of
The CTL renders void a number of provisions that sellers and developers may have previously sought to include as standard. Practitioners and their clients should be aware of the following:
Tort liability exclusions (Article 257): “As-is” disclaimers purporting to exclude liability for harm caused by the seller’s own negligence or wrongful conduct will not be enforced. If a seller fails to disclose a dangerous structural defect and a buyer is injured as a result, the “as-is” clause offers no protection.
Decennial liability caps or exclusions (Articles 821 and 823): Contractors and engineers bear a mandatory ten-year joint and several liability for collapse or defects threatening structural integrity. No clause exempting or limiting this exposure is valid. Claims must be brought within three years of collapse or discovery of the defect (Article 824).
Unconscionable adhesion contract terms (Article 223): Where a developer presents a standard form agreement on a take-it-or-leave-it basis, a court may modify or relieve the buyer of terms that are grossly unfair or one-sided. Any clause preventing the court from exercising this power is itself void.
Risks for buyers, lessees, and mortgagees
For buyers, the most significant risk in practice is the one year limitation period for latent defects claims. The clock starts from the day following delivery, and the period runs quickly. Buyers who discover a hidden defect but delay in taking legal advice may find their claim extinguished. Where a seller is known to be at risk of insolvency, prompt action is especially important.
The CTL represents a significant tightening of mandatory protections in UAE real estate. The previous ability to contract out of certain warranty obligations has been substantially curtailed, and the penalties for relying on void exclusion clauses can be severe. Advisers and their clients who understand where the new lines fall will be better placed to structure transactions that are both commercially effective and legally robust.
