Home Buyers Payment Obligation in Covid 19
Realty+ in conversation with CA Harsh Mehta, Gujarat RERA Experts
Indian government imposed lockdown to restrict corona virus pandemic. This policy have put homebuyers In difficult situation because they have no clarity regarding cash inflow but they have to make payment to Builders or to the Banks/NBFC for repayment of Home Loans. Every Homebuyers need to enter agreement with developers before the developers take money exceeding 10% of Value of Home. In agreement of sale, payment schedule also mentioned and if home buyers not make payment as per schedule than developers may revoke contract and cancel agreement for sale. I would like to draw your attention in below mentioned two situation.
What are home buyers payment obligation to banks/NBFC?
In this difficult situation, RBI comes to help the home buyers, RBI permitted to all banks, NBFC to allow a moratorium of three months on payment of installment in respect all loans including home loans outstanding on 1st march,2020. RBI also announce that if Borrower fails to pay installment in this 3 months than this nonpayment should be not consider as a ‘Non Performance Asset’
What are home buyers payment obligation to developers?
In every contract, there is one clause namely “Force Majeure”. This concept applicable to all industries and sectors. The term “Force Majeure” means Occurrence of an event which affects a party’s ability to perform a contract, either in entirety or in a timely manner. Present scenario is also considered as force majeure. Non Payment of obligation in this 2/3 month will be considered as force majeure event because it is beyond control of home buyers. So by invoking such clause may result into temporary suspension of performance of parties under contract by seeking extension of timelines with appropriate and necessary relaxation to the affected party.