‘Force ma­jeure’ clause un­der the Act

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Mu­niesh­wer A Sa­gar mu­niesh­wer.sa­gar@hin­dus­tan­times.com

CHANDIGARH: The force ma­jeure clause is in ev­erysale agree­ment signed be­tween a buyer and builder. The clause is in­cor­po­rated in the sale agree­ment to ex­empt the builder from penal­ties in case there are some un­fore­seen rea­sons, in­clud­ing nat­u­ral calami­ties be­cause of which the builder failed to meet dead­lines.

The Real Estate (Reg­u­la­tory and De­vel­op­ment) Act and state rules un­der it also elab­o­rate on the mean­ing and ex­emp­tions re­lated to force ma­jeure.

The term in le­gal agree­ments refers to an event or ef­fect that can not be rea­son­ably an­tic­i­pated or con­trolled by one or both the sig­na­tures of the agree­ment.

Ac­cord­ing to the R era Act, the ex­pres­sion‘ force maj eu re’ means acase­ofwar, flood, drought, fire, cy­clone, earth­quake or any other calamity caused by na­ture af­fect­ing reg­u­lar de­vel­op­ment of the real estate project.

REG­IS­TRA­TION EX­TEN­SION

The reg­is­tra­tion granted un­der the Sec­tion 5 to a builder may be ex­tended by the state Rera on an ap­pli­ca­tion made by the builder due to force ma­jeure.

Sec­tion 6 of the Act states that no ap­pli­ca­tion for ex­ten­sion of reg­is­tra­tion can be re­jected un­less the ap­pli­cant is given an op­por­tu­nity of be­ing heard in the mat­ter.

Sec­tion 6 of the Haryana Real Estate (Reg­u­la­tion and De­vel­op­ment) Rules, 2017, stip­u­lates that if the ex­ten­sion of reg­is­tra­tion is due to force ma­jeure, court or­ders, gov­ern­ment pol­icy/ guide­lines, de­ci­sions, the state Rera can waive the ex­ten­sion fee of reg­is­tra­tion.

On sim­i­lar lines, the Pun­jab Rera rules stip­u­late that where the pro­moter ap­plies for ex­ten­sion of reg­is­tra­tion of the real estate project due to force ma­jeure, “it shall not be li­able to pay any fee”.

POS­SES­SION DE­LAY PENAL­TIES

Force ma­jeure is one of the ex­emp­tions un­der which the builder can miss the dead­line for pos­ses­sion. In the model sale agree­ment, un­der the Haryana state Rera rules, the builder has to as­sure to hand over pos­ses­sion of prop­erty along with park­ing( if ap­pli­ca­ble) as per agreed terms and con­di­tions, “un­less there is de­lay due to force maj eu re, court or­ders, gov­ern­ment pol­icy/ guide­lines, de­ci­sions af­fect­ing the reg­u­lar de­vel­op­ment of the real estate project.”

Un­der the Pun­jab Real Estate (De­vel­op­ment and Reg­u­lar­i­sa­tion) Rules 2017, ex­cept for the ex­emp­tion for force maj eu re con­di­tions, the builder is con­sid­ered un­der a con­di­tion of de­fault if it fails to pro­vide ready to move in pos­ses­sion of the apart­ment or plot to the buyer within the time pe­riod spec­i­fied; and on ac­count of dis­con­tin­u­ance of builder’s busi­ness as a de­vel­oper on ac­count of sus­pen­sion or re­vo­ca­tion of his reg­is­tra­tion un­der the pro­vi­sions of the Act or the rules or reg­u­la­tions made there un­der.

SALEAGREEMENT AND FORCEMAJEURE

As per the model sale agree­ment stip­u­lated un­der the state Rera rules, if the com­ple­tion of the project is de­layed due to the force ma­jeure, then the buyer has to agree that the builder is en­ti­tled to the ex­ten­sion of time for de­liv­ery of pos­ses­sion of the prop­erty.

Sim­i­larly, one of the terms and con­di­tions of the model sale agree­ment stip­u­lates that the buyer agree sand con­firms that in the event it be­comes im­pos­si­ble for the builder to com­plete the project due to force maj eu re then the al­lot­ment shall stand ter­mi­nated.

In such a case, builder has to re­fund to the buyer, the en­tire amount re­ceived by him from the buyer within 90 days. The builder has to in­ti­mate the buyer about such ter­mi­na­tion at least 30 days prior to such ter­mi­na­tion.

After re­fund of the money paid by the buyer, as per the model sale agree­ment, the buyer can not claim any rights against the builder and the builder is to be re­leased and dis­charged from all its obli­ga­tions and li­a­bil­i­ties un­der the said signed sale agree­ment if the force ma­jeure clause comes into ef­fect. In case of the force ma­jeure, the builder is also ex­empted from com­pen­sat­ing the buyer in case of any loss caused to the buyer due to de­fec­tive ti­tle of the land, on which the project is be­ing de­vel­oped or has been de­vel­oped, in the man­ner as pro­vided un­der the Act.

Prior to the im­ple­men­ta­tion of the Rera Act and the state rules, builders have too fre­quently tried to get away with long pos­ses­sion de­lays un­der the am­bit of the clause. So far, con­sumer fo­rums have rarely al­lowed the clause to re­strict the home buyer from get­ting due jus­tice against the de­fault­ing builder. It is to be­seen whether un­der the new Rera regime the force ma­jeure clause is mis­used by builders or helps them in gen­uine ad­verse cir­cum­stances

HT FILE

Ac­cord­ing to the Rera Act, the ex­pres­sion ‘force ma­jeure’ means a case of war, flood, drought, fire, cy­clone, earth­quake or any other calamity caused by na­ture.

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