Govt to consider invoking Force Majeure under RERA

• Hardeep Singh Puri has assured the real state sector that the govt is taking various proactive steps to revive economic activities

• The minister also told the stakeholders that the government will soon announce measures to protect the interest of the homebuyers and shield the sector

New Delhi: The government has said on Wednesday that it will consider the real estate sector's request for invoking the 'Force majeure' clause under RERA (Real Estate Regulation and Development Act, 2016) in order to meet the challenges arising out of the COVID-19 pandemic. 

After chairing a meeting of the Central Advisory Council of RERA, which saw participation from various stakeholders of the real estate sector, including state secretaries, RERA Chairpersons, representatives of home buyers, real estate associations, Union Minister for Housing and Urban Affairs Hardeep Singh Puri said on Twitter, "Participants raised several concerns facing the sector in the light of COVID-19 pandemic. I assured them that govt is taking various proactive steps to revive economic activities."

Govt to mull Force Majeure under RERA and announce measures for the sector

Apart from assuring that the request for invoking the Force Majeure clause under RERA will be considered, the minister also told the stakeholders that the government will soon announce measures to protect the interest of the homebuyers and shield the sector from the adverse impact of the COVID-19 pandemic. 

"We shall consider their demand for invoking 'force majeure' clause under RERA & will soon announce measures to save the interest of home buyers & protect the sector from adverse impact," said Puri on Twitter.

What is force majeure?

It is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, plague, or an event described by the legal term act of God (hurricane, flood, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract. In practice, most force majeure clauses do not excuse a party's non-performance entirely, but only suspend it for the duration of the force majeure.

How does RERA define it?

The RERA under Section 6 defines force majeure condition as: The registration granted under Section 5 may be extended by the Authority on an application made by the promoter due to force majeure, in such form and on payment of such fee as may be specified by regulations made by the Authority.

For the purpose of this Section, the expression "force majeure" shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project, reads RERA.