Questions & Answers
Would COVID pandemic be considered a Force Majeure to delay project delivery?
Hello,
We purchased an off-plan property in 2017. The delivery date is Q4 2018. SPA includes a 1-year extension after this date (which would lead to Q4 2019 completion date).
To this date, we have received no communication about a new completion date. It keeps getting extended and extended. The online portal says that the delivery is in May 2021.
As this seems to be in breach of the contract signed, we would like to know the following:
1. Can we terminate the contract and recover our payments (40% has been made so far, and 60% due at the handover)?
2. The SPA has a clause of Force Majeure in it, but it states that: should an event of Force Majeure occur that delays the delivery, the seller must notify, as soon as practicable, the purchaser and communicate a new anticipated completion date - no such communication has taken place.
Can the seller use the COVID 19 pandemic as an event of Force Majeure (even though COVID-19 took place months after the extended completion date expired)?
Thank you for your advice!
Hi,
There is no Force Majeure here. The project is progressing but with delay and as long as they are bound to the extension time, you have a solid case to claim termination.
A review of all documents will support the final decision including SPA, SOA, extension time, and the latest project Rera report.
Please contact me via phone or email!
Dear Questioner,
Pursuant to the query, If the developer is not able to fulfill his obligations as per the contract, you can file a case for breach of contract.
There may be a clause in the contract that the developer can delay the project to 12 months from the anticipated date.
Further, we need to know your matter in detail and review your contract to give you proper advice. Kindly contact us via phone.
Thank You!
Dear Questioner,
Please note that the Force Majeure clause depends on the court's discretion and the terms of the contract.
We need to know more details in this matter, such as the current status of completion, payments made to date, and extension allowed to the developer as per the SPA.
Please send us a copy of the Sale and Purchase Agreement and all supporting documents on email so that we can review the same and guide you with the next steps.
Thanks!
