Dubai’s New Law Speeds Up Contract Disputes

New Law Eases Housing Contract Disputes in Dubai

UAE authorities have taken another step to strengthen social stability and improve citizens' welfare. Starting January 1, 2026, a new law will come into effect in Dubai that specifically focuses on the quick and efficient resolution of disputes related to the execution of residential construction contracts. The legislation aims to ensure the smooth continuation of housing projects while protecting the rights of parties involved in the contracts, especially the citizens.

What does the new regulation aim for?

The objectives of the regulation include:

Creating an alternative dispute resolution (ADR) system for construction contracts,

Encouraging peaceful, consensus-based solutions for long-term collaborations,

Handling contractual disputes more quickly and efficiently,

Ensuring that construction does not halt during legal procedures.

The law introduces a new legal framework allowing parties to resolve their conflicts through mediation without court proceedings. This is particularly important as delays in housing projects can pose significant social and economic risks.

The dispute resolution process

To implement the regulation, the Peaceful Dispute Resolution Center will establish a special unit dealing exclusively with disputes related to residential housing contracts. The process comprises two main stages:

1. Mediation: Initially, cases undergo a mediation process lasting a maximum of 20 days, extendable by another 20 days if both parties agree.

2. Adjudication: If mediation fails, the case is referred to a three-member panel consisting of a judge and two industry experts. This committee must make a decision within 30 days, with a possible one-time extension of another 30 days.

Appeals against the decision can be filed with the First Instance Court within 30 days.

Impact on the housing construction sector

The regulation is a significant step forward in regulating Dubai’s housing construction sector. Contractual relationships among citizens, builders, and consultants will become more transparent and sustainable, contributing to the timely completion of projects and family tranquility in the long term.

The new system is beneficial not only from a legal perspective but also from a societal one: it reduces uncertainty, prevents prolonged legal battles, and promotes a peaceful living environment. Through this, Dubai sets an example internationally for innovative and efficient mechanisms for resolving construction disputes.

Summary

With the introduction of the new law, Dubai once again demonstrates its commitment to the welfare of its citizens and legal certainty. The alternative dispute resolution model, expedited procedures, and specialized judicial panel create a system capable of minimizing the impact of conflicts around housing construction while maintaining the pace of projects and social tranquility.

(Based on the law issued by Sheikh Mohammed bin Rashid Al Maktoum.)