Force Majeure, a Friend of Yours

Sujan Afi S

The Story

At times life gets us into some unexpected situations. We never remain prepared for such hard times. Still, we have to face the situation. We have to tackle it. We have to deal with it.

Covid 19 was unexpected. It has changed the situation of the entire world drastically. It has chained man! Never had mankind expected to get chained. It has affected the life of every single person, one way or the other. We have seen the cries of innumerable mothers, fathers, wives, brothers, sisters, friends! The world almost came to a stand-still in 2020. Naturally, the economy of the countries got affected. People lost their jobs and other sources of income. People became helpless.

Definitely, the experts did not expect Covid 19. Nevertheless, when some rules and regulations are formed, the experts always try to consider the possible things that can happen. Similarly, while forming rules and regulations for the Real Estate market, the experts have incorporated several concepts. Just as we have concepts of Contingency contracts, Bump clauses, etc., we also have a concept called Force Majeure. 

So, what is this ‘Force Majeure? You must wonder. Well, a force majeure clause is enforced in some emergency or unexpected situations. It pardons one or both parties to meet certain obligations as the situation is out of control. 


A Deeper Understanding

Suppose you are a working builder. Your parents are retired persons. You have the responsibility of the entire house. You spend almost the entire money of your savings in starting the business. You take loans from agencies or banks. You start constructing the building. 

However, things change drastically after Covid 19 sets in! Your salary gets reduced. Nevertheless, the expenditure remains the same. You can’t manage to pay one of the instalments. Under such a situation, the first question that comes to your mind is – What will happen now as I can’t pay the instalments in time?

Well, to handle these kinds of unexpected situations, the experts have the concept of ‘Force Majeure’. A force majeure proviso is a legally binding arrangement that pardons one or both the parties’ commitments when conditions emerge which are beyond control, thus, making the execution of the agreement illogical or unimaginable. Typically, a force majeure clause is enacted when:

  1. The situation turns adverse due to some natural calamities like floods, earthquakes, severe storms, wildfire, etc.
  2. There is an outburst of war, terrorist attacks, pandemics, grave accidents, etc.
  3. In case of any changes in governments policies, laws, and the like.
  4. If there is a major strike or a severe dispute takes place with the workers.

Fortunately, Indian home purchasers do comprehend that the lockdown following the Coronavirus pandemic, was neither in the possession of the manufacturers nor could it have been expected. Consequently, they have no issue with the force majeure condition being summoned by the government of India that gave a relaxation period of 6 months to the home builders. This had prompted huge delays in the completion of the housing projects. Further, it had also given some builders or developers to move away without suffering any consequences or paying any penalty. Thus, the home buyers, in such cases, had to suffer. 

Force Majeure and RERA

The Real Estate (Regulation and Development) Act (RERA) makes it a compulsion for the builders to enrol all their new projects with the state authority and indicate a period inside which the venture is to be finished. If the individual neglects to fulfil the predetermined task time constraint, he might have to suffer a consequence of up to 10% of the whole venture cost. 

Nevertheless, RERA acts as a redeemer for the developers because they don’t require to fulfil their obligations during unexpected circumstances. Section 6, Chapter-II of the RERA states:

“The enrollment conceded (to a land project) might be reached out by the (land administrative) expert on an application made by the advertiser because of power majeure, in such structure and on instalment of such charge, as might be indicated by guidelines…”

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Every problem has a solution. You just need to find that out without being frustrated. If some adverse situation affects the business, there are provisions like Force Majeure to help people cope up with the situation. The concept of force majeure is very helpful for the Real Estate agents like the developers because it declares the obligations of the latter null in case of some emergency. All you need is to know concepts like this so that you don’t face any problems in an adverse situation. The experts at Roodland India are there to guide you in this regard. Our professionals not only help you in making the right choice but also gives you detailed guidance on subjects related to the Real Estate market. Thus, if you are new in this field, you can reach out to us at Further, you can visit our The Real Talks platform where you will find more informative articles and guidance related to the RE market.  


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