2. If the developer/vendor fails to complete the building and hand over the flats to the purchasers on time, can the purchasers terminate the agreement and sue for compensation?
Generally speaking, the vendor will be entitled to an extension of time for completion of the building in the event that an Authorized Person grants an extension due to delays caused by strike or lock-out of workmen; riots or civil commotion; force majeure or Act of God; fire or other accident beyond the vendor’s control; war or inclement weather.
If the vendor fails to complete the building/flats on or before the specified date without any reasonable and legitimate reasons, the purchasers can choose to:
- terminate the sale and purchase agreement, ask for the refund of all amounts paid to the vendor, and claim for interest (usually at 2% per annum over prime rate) on the amount paid from the date the amount was paid to the date of refund; or
- wait for the completion of the flat and claim for interest (usually at 2% per annum over prime rate) on the amount paid from the date following due date of completion to the actual date of completion of the flat.
Purchasers must also note that there is a time restriction on informing the vendor of the above decision. Independent legal advice should be sought if necessary.