How to Avoid Construction Delays Due to Act of God
Oct 03, 2018 Real Estate News
Most of the home buyers want to invest in newly built or projects under construction as these are comparatively cheaper than resale or ready-to-move ones. Circumstances may not prevail that you get the possession of the house as promised. Developers may come across various reasons to delay possession, which could be frustrating for home buyers. Buyers seldom read agreements and clauses while signing the contract to buy homes. Most of the time developers give force majeure (Act of God)reasons to win legal battles, taking advantage of the situation.
Home buyers can easily challenge for such vague delays. They can seek specific criteria to be fulfilled in the name of ‘Act of God’.
External factor: Defaulting parties must not bring, and the act should be beyond the control of the party.
Unpredictable reason: The cause must be unpredictable and unavoidable.
Uncontrollable cause: The cause cannot be avoided by the party leading to the execution of the contract impossible to fulfil.
Now the question is what qualifies as Act of God. Any natural calamities, for example, floods or drought, epidemic, earthquake as well as a volcanic eruption. Even wars and government decrees can be considered as force majeure. What’s not? Any labour strikes, market fluctuations or commercial considerations, litigation, and so on, cannot be claimed under this clause. Force majeure can be claimed within a given time frame. Moreover, the clause does not relieve the defaulting party completely; it may suspend the performance for a certain period.
You as a home buyer should ensure that certain clauses points are included in the contract before making the deal so that the developer does not use force majeure clause arbitrarily. Consider appointing an expert to review the clauses. Ensure that the clause is explicitly spelt out in the agreement if the developer wants to make beneficial. An insurance cover for the home buyer is not too much to ask for.
The act of God Clause in Real Estate
The term ‘force majeure’ (French translated term) is recognised under the Indian Contract Act, 1872 that provides a party to buy time to do its contractual obligations for things that are beyond its control. This a kind of protection for developers against any uncertainties and this clause is found in almost all agreements between the buyers and developers. However, at times developers use this clause for vague reasons and incidents to delay the possession. For example, shortage of sand and financial crisis, and such plea are rejected by the National Consumer Disputes Redressal Commission for using arbitrary grounds.Home buyers can easily challenge for such vague delays. They can seek specific criteria to be fulfilled in the name of ‘Act of God’.
External factor: Defaulting parties must not bring, and the act should be beyond the control of the party.
Unpredictable reason: The cause must be unpredictable and unavoidable.
Uncontrollable cause: The cause cannot be avoided by the party leading to the execution of the contract impossible to fulfil.
Now the question is what qualifies as Act of God. Any natural calamities, for example, floods or drought, epidemic, earthquake as well as a volcanic eruption. Even wars and government decrees can be considered as force majeure. What’s not? Any labour strikes, market fluctuations or commercial considerations, litigation, and so on, cannot be claimed under this clause. Force majeure can be claimed within a given time frame. Moreover, the clause does not relieve the defaulting party completely; it may suspend the performance for a certain period.
You as a home buyer should ensure that certain clauses points are included in the contract before making the deal so that the developer does not use force majeure clause arbitrarily. Consider appointing an expert to review the clauses. Ensure that the clause is explicitly spelt out in the agreement if the developer wants to make beneficial. An insurance cover for the home buyer is not too much to ask for.
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