Buying off-plan. Fixed completion date or unfair term

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    First of all we have to bear in mind that under the spanish law, unfair terms may not be used in consumer contracts and if in spite of this such terms are used, then they are declared null and void.
    According with the spanish consumer protection acts, it will be considered unfair the term with merely indicative date of delivery conditioned to the developer intention.

    Unfair terms stop buyers from making certain sorts of legal claim against the developer which they could otherwise have made, or give the seller alleged rights against the buyers that it would not otherwise have had.

    We are running into a lot of problems when we have to issue a writ against a developer on the basis of contracts with these sorts of clauses:

    1º “If the developer did not hand over the property in November 2002 the buyer could choose between extend the time limit to six months or cancel the contract with the return of the deposited amounts plus interest”

    This clause is depriving the buyer of the possibility to enforce the performance of the duty. The buyer just can renew the agreement without penalty on the seller or terminate the contract, this right of rescission is on the side of the seller because the interest rate is always lower than the profit of the seller if he is going to resell after. If the seller has an offer likely he will resell.

    2º “ within a maximum period of 18 months from the start of the building works”.
    Exactly, when did the building works start ? This clause is vaguely worded

    3º “within two months of the end of the dwelling”
    What will happen if the dwelling has no end ?

    4º “before June 1, 2005 except the existence of force majeure (act of God) events that delay the building such as archeological discoveries, adverse weather conditions who oblige to cancel or stop the work, strike or labour dispute be it lawful or unlawful in any field of building and transport.

    Although is listed specific events which the parties agree will constitute force majeure events the circumstances in which Spanish courts will apply force majeure will be limited. They usually tend to restrict the extent. If you are not a lawyer you could think that one week raining could delay your completion date six months.

    5º “The work has to be completed in June 2005, from which point the developer apply for the permit to inhabit the dwelling, once granted the developer let the seller know and within 30 days the seller must settle the debts then within 15 days the developer has to deliver the property and sign the public deed of sale”
    There is not a time limit between the end of the dwelling and the completion. This clause is therefore construed in the light of the principle that there is an obligation on the developer to calculate previously time for paperwork and to word a clause including everything.

    What type of time clauses do you have in your contract ?

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