Thursday, November 20th, 2008 | Author:

When a Developer Can Extend A Deadline

In the last blog entry, I mentioned the “impossibility of performance” doctrine as it relates to a purchaser trying to terminate a condominium construction contract.   One of the exemptions applicable to the Interstate Land Sales Act (“ILSA”) allows a developer to avoid complying with the registration terms of the act provided that the condominium unit is delivered within two (2) years of the date of the new construction contract.  Standard contract language often contains a “catch all” known as a “force majeure” clause that would seek to extend the two (2) year compliance deadline.   Florida law, however, really limits this “force majeure” clause to those situations where the developer encountered a problem sufficient to rise to the level of “impossibility of performance.”  Generally, this is a very high standard to meet.  For example, if a hurricane destroyed a condominium project, this would meet the test of “impossibility of performance” and would extend the deadline for the developer to deliver the property.  On the other hand, if the developer simply found it more difficult to deliver the project or more expensive to complete the unit because something foreseeable occurred – like a delay in obtaining construction materials—this would not rise to the level of “impossibility of performance” and the two (2) year deadline would not be extended.  Either way, litigation in this area often comes down to the issue of whether a particular set of circumstances is sufficient to meet the “impossibility of performance” level, but a purchaser who seeks to get out of their condominium contract should know that this is a very difficult standard for the developer to meet.

This article does not constitute legal advice or the formation of an attorney-client relationship, and is not for re-publication without express permission of the author.