….it now seems that if you do not complete without one (LFO) the developers have every right to take you to Court.
This is only true if it is specifically stated in your contract, for example that completion is due when the architect’s End of Works Certificate is produced.
And this is where a good lawyer comes in and is so necessary. He/she would never agree to such a clause as a protection for his client.
The reason the Licence of First Occupation law was brought in in the first place was to protect purchasers, so that they are not legally obliged to complete without one. The LFO would prove your property has been inspected and passed by a Town Hall offical and is therefore deemed legally habitable.
But certain developers just spit on the law and tie you up in knots by putting illegal clauses in their contracts that basically go against the spirit of this law.
As far as I understand, once this illegal clause in your contract has been agreed to by the fact you signed it – there is nothing you can do.