Can the Builder Claim COVID or Force Majeure for Delay?

Almost every reply a builder files in a delay case has a paragraph headed "force majeure". The list is long and familiar: demonetisation, GST, the NGT and pollution bans, the Supreme Court's construction bans, labour shortages, the slowdown in the real estate market, delays in approvals, and above all, since 2020, COVID-19. The builder's argument is that none of this was its fault, so it shouldn't have to pay for the delay.

Some of these arguments have a basis in law. Most don't, or work only in a much narrower way than builders claim. This guide explains what force majeure actually means, how RERA deals with it, what authorities have done about COVID and construction bans, and how to respond when your builder uses these excuses.

What force majeure means

"Force majeure" is a French phrase meaning "superior force". In contracts, a force majeure clause excuses a party from performing, or gives it more time, when something outside its control and beyond what it could reasonably have foreseen or guarded against prevents performance. Classic examples are war, natural disasters and epidemics.

There are two important limits. First, the event must actually prevent or delay performance. It isn't enough that it happened, or that it made things more expensive or harder. Second, the party relying on it must show that the event, and not its own failures, caused the delay. The Supreme Court put it this way in Energy Watchdog v. Central Electricity Regulatory Commission (2017): a rise in costs, or a change in market conditions that makes a contract less profitable, isn't force majeure. The clause is construed narrowly.

Indian law also has a general rule, in Section 56 of the Indian Contract Act, that a contract becomes void when performance becomes impossible. Courts treat this "frustration" doctrine strictly. Delays in a construction project, even serious ones, rarely make the contract impossible to perform.

Force majeure under RERA

RERA uses the term in one place: Section 6, which allows the authority to extend a project's registration. The explanation to that section defines force majeure as "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."

That's a narrow definition. It covers war and natural calamities. It doesn't mention government approvals, market slowdowns, labour shortages, changes in tax law or the builder's financial problems. The Act does allow a further extension of registration for other reasons, at the authority's discretion, but that's not the same as saying the builder isn't responsible for the delay.

It's also important to separate two things that builders often run together:

• Extension of the project's registration, which keeps the project legally on the RERA register and lets the builder carry on selling. This is a regulatory matter between the builder and the authority.
• The possession date in your agreement, which is a promise the builder made to you. An extension of registration doesn't automatically change it. If the agreement said December 2021 and the builder delivers in December 2023, it's late by two years, even if the registration was extended.

Authorities have said this many times. The registration validity and the contractual possession date are different things. When the builder argues "the registration was extended, so I'm not late", look at your agreement instead.

COVID-19

COVID is the one excuse that, in a limited form, has generally been accepted. When the national lockdown started in March 2020, construction stopped almost everywhere. In May 2020 the Ministry of Housing and Urban Affairs issued an advisory treating the pandemic as a force majeure event under RERA and suggesting that authorities extend the registration of projects due to complete on or after 25 March 2020 by six months. Most state authorities did so, through general orders rather than project-by-project decisions, and several later allowed a further extension of about three months after the second wave in 2021. The exact orders differ by state.

What did that mean for buyers? Authorities have taken somewhat different approaches, but a common pattern is:

• Where the possession date in the agreement fell after 25 March 2020, many authorities have excluded a grace period, often six months, when calculating delay interest. So if your date was June 2020, delay interest might run from December 2020.
• Where the possession date had already passed before March 2020, the builder was already in default when COVID hit. Authorities have generally refused to give it the benefit of the pandemic for a delay that had already started. The Delhi High Court's reasoning in Halliburton Offshore Services v. Vedanta (2020), in a different commercial context, is often quoted for this point: a party that was already in breach before the pandemic can't use COVID as an excuse.
• For a refund under Section 18, the Supreme Court's description of the right as unconditional in Newtech (2021) means that the buyer's right to withdraw and get the money back doesn't depend on whether the delay was the builder's fault. The COVID grace period mainly affects the amount of delay interest, not the right to a refund.

So COVID is a real factor, but it's usually worth a few months, not years. A builder that was two years late before the pandemic and claims that COVID explains the whole delay is unlikely to get far.

Construction bans in NCR

In Delhi-NCR, construction is periodically stopped to control air pollution, under the Graded Response Action Plan and orders of the Supreme Court, the NGT and the Commission for Air Quality Management. Builders often claim these bans as force majeure.

The response from authorities has usually been measured. The bans are real and outside the builder's control, but they're also predictable: they've happened most winters for years, typically for days or weeks at a time, and an experienced NCR builder should plan for them. Where authorities have given any allowance, it has usually been limited to the actual period of the ban, proved by the orders themselves, and not a general extension. A builder that simply lists "NGT bans" without dates, or claims months of delay for a two-week ban, is unlikely to succeed.

Demonetisation, GST and the market

Demonetisation in November 2016 and the introduction of GST in July 2017 disrupted the real estate market. But they didn't physically prevent construction. Authorities have consistently refused to treat them as force majeure. The same goes for a general slowdown in sales, falling prices, or difficulty raising finance. These are commercial risks the builder takes when it sells flats on a promised date. As Energy Watchdog put it, a change in economic circumstances isn't a force majeure event.

Approvals and government delays

Builders often blame delays in getting approvals, such as environmental clearance, fire NOC, revised plans or the occupancy certificate itself. This argument rarely works. Getting approvals is the builder's job, and the builder is supposed to have the key approvals in place before it sells. Under RERA, it has to disclose its approvals at registration. A delay in approvals that the builder applied for late, or that resulted from deficiencies in its own application, is the builder's problem.

There are exceptions, for example where a court or authority stops work on a project for reasons unrelated to the builder's conduct, such as a dispute over the land acquisition by the state. Even then, the builder has to show the order, the dates, and the direct effect on construction. And for refunds, Newtech specifically said that a stay order that isn't attributable to the buyer doesn't defeat the buyer's right to withdraw.

Labour shortages and contractor problems

"Non-availability of labour" and "contractor default" appear in many builders' replies. Unless they're tied to a specific event like the COVID lockdown, they're ordinary business risks. A builder chooses its contractors and manages its workforce. If a contractor walks off the site, that's a dispute between the builder and the contractor, not a reason for the buyer to bear the cost.

The force majeure clause in your agreement

Most pre-RERA agreements, and some post-RERA ones, have a wide force majeure clause. A typical one excuses the builder for "any reason beyond its control", lists a dozen events including "non-availability of steel, cement or other building materials", "any notice, order or direction of any court or authority", and "any other cause not within the reasonable control of the developer", and lets the builder extend the possession date by the period of the event plus a buffer.

Clauses like this are often not enforced as written. The Supreme Court held in Pioneer Urban Land and Infrastructure Ltd v. Govindan Raghavan (2019) that one-sided clauses in builder agreements, which buyers have no real chance to negotiate, can be treated as unfair trade practices and need not bind the buyer. RERA authorities have applied similar reasoning. For agreements signed after RERA, the model agreement for sale in the state rules limits force majeure to the narrow definition in the Act, and builders aren't supposed to add terms that conflict with it.

Even where a clause is enforceable, the builder still has to prove that the event occurred, when it occurred, how long it lasted, and how it actually delayed your project. A list of events in a reply, with no dates or documents, isn't proof.

Does force majeure affect compensation claims?

Separate from refund and delay interest, you can claim compensation for actual losses, such as rent you paid while waiting, before the adjudicating officer under Section 71. Here the builder's conduct matters more, because Section 72 tells the officer to look at factors such as the amount of unfair advantage gained, the loss caused, and whether the default was repetitive. A genuine force majeure period may reduce what's fair to award for that stretch of time. A builder that used force majeure as cover while diverting money to other projects is unlikely to get much sympathy. See our compensation claims service.

How to respond when the builder claims force majeure

Here's a practical approach for your complaint or your reply to the builder's response.

1. Check the dates. When was possession due under your agreement? When did each claimed event happen? If the builder was already late before the event, it can't explain the delay.
2. Check the definition. Does the event fall within Section 6 of RERA, or within a fair reading of your agreement's clause? Market conditions, approvals and labour rarely do.
3. Ask for proof. Point out that the builder hasn't produced the orders, the dates or evidence of their effect on your project. Ask the authority to disregard bare assertions.
4. Check the quarterly updates. Builders upload progress reports to the RERA website. If they show construction continuing during the period the builder now says it was stopped, that's useful.
5. Look at what happened to other projects. If other builders in the same area finished their projects during the same period, that undermines the argument that the event made completion impossible.
6. Separate refund from interest. If you want a refund, rely on Newtech: the right is unconditional. If you're claiming delay interest, accept a genuine, documented grace period, such as the COVID extension, but resist anything more.
7. Point to the builder's own conduct. Did it keep selling flats, launching new projects or demanding payments during the claimed force majeure period? That's inconsistent with a claim that work was impossible.

Our guide on how RERA interest is calculated shows how a grace period affects the numbers.

A worked example

Here's a made-up example. Arjun's agreement for a Gurugram flat promised possession by 31 March 2019, with a six-month grace period, so by 30 September 2019. The builder offers possession, with an occupancy certificate, in August 2022. Arjun claims delay interest from October 2019.

The builder's reply lists these reasons for the delay: demonetisation (2016), GST (2017), NGT and EPCA construction bans (2017 to 2021), shortage of sand due to mining restrictions, COVID-19 (2020 and 2021), and "delay in the grant of the occupancy certificate".

The authority goes through them. Demonetisation and GST weren't force majeure and in any case came well before the possession date, when the builder still had time to adjust. The NGT and EPCA bans were proved for a total of about 70 days in the relevant period, but most of them happened after the possession date had passed, when the builder was already in default. Sand shortages weren't proved with any documents. COVID hit in March 2020, by which time the builder had been late for six months. The occupancy certificate delay was due to the builder's own late application.

The authority awards delay interest from 1 October 2019 to the date of the valid offer of possession plus two months, without any deduction. In a slightly different case, where the possession date fell in mid-2020, it would probably have excluded a six-month COVID period, in line with its general order.

What buyers sometimes get wrong

• Accepting the force majeure argument without question. Builders sometimes write to buyers saying that the delay was due to force majeure and that no interest is payable. That's the builder's position, not the law.
• Ignoring the COVID grace period entirely. If your possession date fell during or after the lockdown, expect some allowance and calculate your claim on that basis. It makes your complaint more credible.
• Signing a revised schedule. If the builder sends a revised possession date "due to force majeure" and asks you to sign it, don't sign without advice. You may be agreeing to a later date that wipes out your delay claim.
• Waiting for the "force majeure period" to end. Builders sometimes say that they'll revisit compensation once conditions improve. Conditions may never improve enough. File when you're ready.

Where force majeure does help the builder

To be fair, force majeure isn't always an empty excuse. Natural disasters, such as the floods that have hit parts of Mumbai, Chennai and other cities, can genuinely stop construction. A pandemic lockdown did stop work across the country. Court orders stopping work on a project for reasons that have nothing to do with the builder can genuinely delay a project. When a builder can show a real event, with dates and documents, that actually stopped work on your project, authorities will usually allow that period. The argument fails not because force majeure is never available, but because builders usually stretch it far beyond what the facts support.

Force majeure works both ways

There's a point of fairness that's worth making in any case where the builder relies on force majeure. Under RERA, the rate of interest the builder pays you for delay and the rate you pay the builder for late instalments are the same. Section 2(za) defines "interest" as the rate payable by the promoter or the allottee, and says the two must be equal. So if a builder charged you interest for paying an instalment late during the lockdown, while claiming the lockdown excused its own delay, point that out. Some authorities also allowed buyers relief from late-payment interest for the lockdown months. If the builder wants the benefit of COVID, it should give the same benefit to you.

The same goes for demands. A builder that says its site was shut by a pandemic or a pollution ban, but kept sending construction-linked payment demands for the same months, has a credibility problem. Keep every demand letter and email with its date.

Evidence worth collecting

Force majeure arguments are usually won or lost on dates and documents. It helps to have:

• Your agreement, with the possession date and grace period highlighted, and the force majeure clause.
• The RERA project page, with the original and any extended completion dates, and the quarterly progress reports.
• The authority's general COVID orders, which are usually on its website.
• The builder's demand letters and construction updates sent to buyers, with dates.
• Photographs of the site taken over time, if you or other buyers have them. Buyers' WhatsApp groups are often a good source.
• News reports or orders showing the actual dates of any construction bans the builder relies on.
• Information about other projects in the same area that were completed during the same period.

With these in hand, you can test each excuse against the facts rather than arguing in general terms. Our checklist of documents for a RERA complaint covers the rest of what you'll need.

The bottom line

Force majeure is a narrow exception, not a general excuse. Under RERA it covers war and natural calamities. COVID has generally been accepted as worth a grace period of a few months for projects due during or after the lockdown, but not as an explanation for years of delay or for delays that had already begun. Construction bans, approvals, market conditions and labour problems rarely justify a delay at all. And for a refund under Section 18, the reason for the delay generally doesn't matter. Check the dates, ask for proof, and don't let a long list of excuses hide the basic fact that the builder didn't deliver on time. For help with a complaint, see our delay interest and refund services.

Frequently asked questions

Can the builder use COVID as an excuse for delay?

Partly. Most RERA authorities allowed a grace period, often six months, for projects due on or after 25 March 2020. It generally doesn't help a builder that was already late before the pandemic.

What counts as force majeure under RERA?

The explanation to Section 6 lists war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the development of the project.

Does an extension of RERA registration extend my possession date?

No. The registration and the possession date in your agreement are different. An extended registration doesn't stop delay interest from running under the agreement.

Are NGT or pollution construction bans force majeure?

Authorities sometimes allow the actual days of a proved ban, but not general extensions. Bans in NCR are frequent and expected, so builders are expected to plan for them.

Can force majeure stop me from getting a refund?

Generally no. In Newtech (2021) the Supreme Court described the right to a refund under Section 18 as unconditional, including where the delay is due to a stay order not attributable to the buyer.

My agreement has a wide force majeure clause. Am I bound by it?

Often not as written. One-sided clauses can be treated as unfair, following Pioneer v. Govindan Raghavan (2019), and the builder still has to prove the event and its effect.

The builder asked me to sign a revised possession schedule. Should I?

Get advice first. Signing could amount to agreeing to a later date and weaken your claim for delay interest.

This guide explains, in general terms, how force majeure and COVID-related extensions have been treated in RERA cases. State authorities have issued different orders and taken different approaches, and outcomes depend on the facts proved. This isn't legal advice on your case.