The Legal Risks of Project Handover Without a Taking Over Certificate (TOC) in Bahrain
In Bahrain’s construction industry, the Taking Over Certificate (TOC) is a critical contractual document that formally confirms the project owner has accepted the works as substantially complete. It marks the official transition of responsibility from contractor to employer and often triggers key contractual events including the start of the Defects Liability Period (DLP) and the release of certain payments.
Handing over a project without a TOC can create serious legal and financial risks for both parties. In this blog, we explain why the TOC is so important, what can go wrong without it, and share a general illustrative example to show how legal complications can arise in practice.
What Is a Taking Over Certificate (TOC)?
A TOC is typically issued by the project consultant or engineer, certifying that:
- The works are complete in accordance with the contract (or substantially complete)
- Any remaining minor works (“snag list” items) are documented
- The project owner can safely take possession and use the facility
It is not just an administrative formality, it is a contractual milestone with significant legal implications.
Why the TOC Matters Under Bahraini Law and Contracts
Most FIDIC-based and Bahraini construction contracts link the TOC to:
- Start of the Defects Liability Period (DLP)
- Release of retention money or performance bond reductions
- Transfer of insurance obligations from contractor to employer
- Final payment entitlements
- Shift of risk for damage, theft, or loss on site
Without a TOC, these milestones remain legally unclear, which can lead to disputes.
Legal Risks of Handover Without a TOC
- Unclear
Start of the DLP
Without a TOC, the DLP may not officially begin, extending the contractor’s liability indefinitely. - Payment
Disputes
Employers may withhold final payments or retention, claiming the project was never officially taken over. - Liability
for Damage After Occupation
If the owner starts using the building without a TOC, the contractor may still be liable for damages caused after occupation. - Insurance
Gaps
Risk transfer from contractor to employer may not occur, leaving unclear responsibility for post-handover losses. - Difficulty
in Proving Completion
In any dispute, the absence of a TOC makes it harder for the contractor to prove the project was completed according to the contract.
📋 Best Practices to Avoid TOC-Related Disputes
- Ensure the contract clearly defines TOC issuance procedures
- Request formal inspection and snag list approval before handover
- Do not allow partial occupation without a documented agreement
- Maintain clear correspondence requesting TOC issuance once works are substantially complete
- Engage legal support if the other party delays or refuses TOC issuance without valid grounds
Example:
A contractor completed a high-value mixed-use building in Bahrain. The project owner began occupying certain floors while other areas awaited minor finishing. No TOC was issued, as the consultant insisted all works be 100% complete first.
Months later, defects appeared in areas already in use. The owner demanded repairs, claiming the contractor was still fully responsible. The contractor argued that the works had been completed months earlier and that the DLP should have already started.
A lawyer was brought in to review the contract, which followed a FIDIC-based format. It was found that partial handover provisions existed but had not been formally invoked, leaving the DLP start date undefined. Through negotiation, the parties agreed to issue a backdated TOC for the completed sections, clarifying liability and payment entitlements.
This example illustrates how failure to secure a TOC can leave contractors exposed to prolonged liability, unpaid sums, and legal uncertainty.
For Project Owners
- Follow contractual procedures for TOC issuance
- Conduct joint inspections promptly when notified of completion
- Avoid occupying the premises without formal acceptance to prevent disputes over liability
For Contractors
- Notify the employer in writing when works are ready for handover
- Request TOC issuance promptly and document all communications
- Use contractual clauses to protect against prolonged liability when owners delay acceptance