The window between taking over and acceptance

Handover is discussed as a moment. It is not one. It is a boundary between two states, and the two states are less different than people assume in one respect and far more different in another.

The owner starts operating at taking over. The owner does not accept the works until the performance certificate, which under most standard conditions comes about a year later.

Almost everything commercially interesting happens in between.

What actually changes on the day

Set out plainly, the list is longer and more one-sided than most owners expect. Drawing on Fenwick Elliott's summary of contractual liabilities after completion, at practical completion or taking over:

The employer takes possession of the site and the works.
The contractor's insurance of the works ends, and the risk of loss or damage to the works transfers to the employer.
The contractor's exposure to delay damages ends.
The contractor's obligation to undertake variations ends.
The first instalment of retention is released.
The performance bond can release.
The defects rectification period is triggered.
The final account can commence.

Read that as a sequence of transfers rather than a checklist. On one day, the party that has been carrying the works stops carrying them, the financial instruments holding it to the contract begin to unwind, and the party taking possession has, at that moment, the least operating experience of the asset it will ever have.

FIG. 01Two clocks running from different events. Operation begins at taking over; acceptance waits for the performance certificate about a year later. Decennial liability in the region runs from a third date again, the occupancy certificate, and for ten years. The commercial instruments that held the contractor to the contract unwind at the start of the window, not at the end.

Complete does not mean free of defects

The other assumption worth dismantling is that completion means the works are finished.

English case law is direct about this, and the reasoning is portable even where the law is not. In Mears Ltd v Costplan Services (South East) Ltd, the Court of Appeal observed that practical completion is easier to recognise than to define, and settled several points that surprise people.

The existence of latent defects cannot prevent practical completion, which follows from the definition of latent: nobody knows about them yet. Patent defects can be present provided they are trifling, and what counts as trifling is a matter of fact and degree, measured against the purpose of letting the employer take possession and use the works as intended. And the fact that a defect is irremediable does not necessarily mean the works are not practically complete.

FIDIC's 2017 conditions take a similar position from the other direction. Sub-Clause 10.1 permits minor outstanding work and defects that do not substantially affect the safe use of the works for their intended purpose, and it contains a deemed taking over provision.

So the asset the owner starts operating is, by design, permitted to have things wrong with it.

The rectification that is not free

There is a widely held belief that the defects period means the contractor will come back and fix whatever appears. It is half right, and the wrong half is expensive.

Under FIDIC 2017 the employer is entitled to notify defects or damage during the defects notification period, and the contractor is obliged to rectify all of it, including defects or damage it did not cause. But where the defect is not the contractor's responsibility, the work is treated as a variation and attracts additional payment under Sub-Clause 11.2, as does additional testing under Sub-Clause 11.6.

Which means the defects period is not a warranty. It is a mechanism guaranteeing that somebody competent will attend, with the question of who pays settled afterwards, on evidence.

That evidence is generated by the owner, during the window, while the owner is operating. Operating records, maintenance logs, alarm histories, commissioning data and the condition of the asset at takeover are the material on which responsibility later turns. They are usually being created by a team that has just arrived and has not been told they are evidence.

Whether that team was ever ready to receive the asset

A third clock, and in this region it runs longest

Everything above is contractual and can be negotiated. The regime that cannot be negotiated away is statutory, and in the Gulf it is unusually strong.

In Saudi Arabia the civil code is silent on decennial liability, but the liability exists elsewhere. Article 29 of the Implementing Regulations of the Saudi Building Code Application Law provides that the supervising designer and the contractor are jointly responsible for compensating the owner for ten years, running from the date of issuance of the occupancy certificate, for total or partial demolition of what they built and for every hidden defect that threatens the durability and safety of the building.

Note the start date. Not taking over, and not the performance certificate. A third event, on a third clock.

In the UAE the equivalent has long sat in the civil code itself, holding contractors and consultants liable for ten years where a structure suffers total or partial collapse or a defect threatens its stability or safety. The regime is strict: no proof of fault is required.

That framework was recodified this year. Federal Decree-Law No. 25 of 2025, the new UAE Civil Code, took effect on 1 June 2026 and largely preserves decennial liability while adding an express provision that it does not apply to a contractor's right of recourse against subcontractors.

The consequence of that addition is worth stating carefully, because it creates an asymmetry rather than removing one. A contractor or designer carries ten years of strict liability upward to the owner, but any recovery downward against a subcontractor requires proof of fault or breach and causation. Kennedys notes that the limitation period for claims under commercial construction contracts is five years, so a recovery action against a subcontractor may be time-barred well before a decennial claim is brought against the contractor.

For an owner the practical reading is not about who recovers from whom. It is that the parties carrying ten years of exposure may have five years of protection, and a party in that position behaves differently when a defect appears in year seven.

What to examine

Establish the three dates and write them down: taking over, expected performance certificate, and the occupancy certificate that starts the statutory clock. They are frequently held by three different teams.
Check what the insurance position is on the day after taking over. The contractor's cover of the works ends there, and the owner's operational policy is not always in force on the same date.
Ask who is briefed to keep operating records as evidence during the defects period, and whether anybody has told the operations team that is part of the job.
Confirm the retention and bond release schedule against the defects period, rather than against completion. Instruments released early are not recoverable by argument later.
For statutory liability, confirm which entities carry it and whether they will still exist in year eight. A ten-year liability against a project-specific company is a liability against nothing.

Nothing here is about pursuing anybody. It is about knowing which state the asset is in, which is a question the certificate on the wall does not answer.

Sources. Jatinder Garcha and Edward Colclough of Fenwick Elliott, Contractual liabilities post completion, 28 January 2021, for what changes at practical completion or taking over, for the FIDIC 2017 treatment of defects notification and rectification not caused by the contractor, and for the summary of Mears Ltd v Costplan Services (South East) Ltd [2019] EWCA Civ 502. FIDIC, Conditions of Contract, 2017 edition, Sub-Clauses 10.1, 11.2 and 11.6, cited without a link because FIDIC publishes no free text of the conditions. Pinsent Masons, Saudi Arabia's Civil Code: need to know for construction projects, for the position on decennial liability in Saudi Arabia and the quoted text of Article 29 of the Implementing Regulations of the Saudi Building Code Application Law. Kennedys, UAE Civil Code 2026: decennial liability and subcontractors, for Federal Decree-Law No. 25 of 2025 taking effect on 1 June 2026, the new provision on recourse against subcontractors, and the five-year limitation period for commercial construction contract claims. Law firm commentary is attributed rather than treated as primary, and the statutory position in any jurisdiction should be confirmed locally.

For a year you operate an asset you have not accepted