Vineet Nandan Gupta .

Is It Fair for a Coworking Space to arbitrarily invoke or revoke the Force Majeure clause?

Today some of the members at 91springboard Turbhe received a communication from 91springboard team stating that the Force Majeure clause invoked by the company due to the Pandemic is over.

The members have a choice to restart their membership (pay for the office space) and in case we wish to discontinue then we will have to give one month's notice period or lose our Security Deposit.

Points to Ponder

1) The Pandemic is going on and it is suggested to not venture out until or unless necessary. Govt of India has come out with guidelines to extend Work From Home till 31-Dec-2020

2) Who gets to decide whether the Force Majeure clause in the agreement can be invoked or revoked

Here are a few Burning Questions?

1) If we or our team member falls sick due to pandemic, who will take care of the Medical Expenses.

2) During this grim Economic Circumstances is it fair for a business to hold its members at Ransom with a chance of losing Goodwill.

3) What is the legal remedy possible?

Feel free to add your thoughts and suggestions in the post for discussion.

Originally Posted Here

हेरंब केसकर

They can't invoke the force measure clause till the government orders are passed. If they are doing so then send them legal notice reply by an advocate. Bcoz the central government imposed pandamic act 1908 along with some other laws. Till today the pandamic act 1908 is not taken back from govt.

It is shear to take undue advantage. If you have courage and patience for fight against them then definitely go ahed. If the deposit is around your one month's rent then forget about it.

Bhavik Jain

When trains are not running, there is a risk of contracting the virus, how can they expect people to travel and use their space?

Piyush Sarawagi

They did this is in Bangalore as well and kept our 1 month security which they had citing contract as the base since we didn't resume our offices and continued to work from home. Not sure why- but they chose 1 month rent over many old customers who were paying them for over years and had committed to back in the next couple of months

Rajesh Durai

Guys, I don't see any issue here.. infact 91springboard is far better than any other co working space... They haven't done billing for March, April, May I.e zero Billing.. if you are not going to use the space you should have sent for cancellation during that priod. There was also survey sent whether you will continue using space or to cancel. Only from June billing restarted.

It's not fair to expect them to give free and we keep their address without paying them. During pandemic everyone suffers. If we would have taken rental space or rental home notice period remains the same. Their request is legit.

P.s : i am current user of 91Springboard blr space.

Vineet Nandan Gupta

Brother, we cannot use the space. Keep our membership on pause. When pandemic recovers we will either continue the membership or close it with Notice Period. This is a Pandemic situation and not a regular one. If I am not using or not in a position to use. Why to pay for it then.

Piyush Sarawagi

Agreed- they are much better than others. However, they billed for March- upto 23rd ...and cancellation request sent after that were not honoured/ accepted because during lockdown they were anyways not charging and the notice required a revenue month as per them. Also, they are within their rights- but losing customers by invoking notice period did not make much sense to me- overall revenue would have been much higher from us. But maybe they thought otherwise- or thought something which I couldn't.

Rajesh Durai

Vineet I can understand your situation but unlike other startups it's a Do or Die for co-working space they have high fixed expense most of the spaces won't survive this pandemic. They also invested huge capital on setting Infra this is difficult times.

If 90% members cancel their membership they can also let go of some floors and retain few. If they pause for one Customer obviously other startups will also request to pause. We can always go back and take up space when this is over and trust me you will get cheaper deal. Why take legal route you can let go of it or just retain 1 seat. It's a testing situation and we need to help each other. Hope you will take right decision. Cheers !

Vineet Nandan Gupta

Rajesh Durai Give me my Security Deposit... I am good... Here the Security Deposit has been forfeited for a lot of members across India

Krishna Marathe

Legally they can't decide, no authority to invoke / revoke force majure, FM clause applicable to both parties for contractual obligations.

Prateek Singhania

The same thing happened with us in Sector 63, Noida hub. They opened on 1 June on a notice of just 2 days. They started the billing or said that they will adjust the security deposit. Me with my team has left this place as their manager was not understanding the situation of pandemic. More than 100 people left that co working space. They don’t know the basics of business and are loosing their loyal customers.

Sayan Ganguly

हेरंब केसकर has shown a good path.While coworking brands are themselves facing pressures from their landlords, they shouldn't have invited this trouble onto themselves.But, again, what is written in your tenancy agreement? This calls for a class action in violation of the Pandemic Act.

Neeraj Tiwari

Co-working spaces are seeing a huge loss and less occupancy due to COVID and they are also right from one way "jitna bach jaye paisa utna accha hain". But on the other hand, with these things surely they will see most of the people moving out immediately after some time as no one want to pay for empty desks....increasing the risk of not getting clients for a long time for them.

Freelancers will work from home only now, other startups with 10-20 team members will go for work from home for some more months (we letgo 20 seats and will be observing work from home till next year March 2021).

Better to serve a notice and move out if they are not pausing the bills. Or refer pendemic act related to office leasing/rent. Stopping further billing should be an immediate action.

We also paid some penalty and adjusted deposit against rent dues to move out 4 months back but I am happy we took right decision, at a right time.

Deepak Kalathil

It’s not done, I already informed them prior that even if hub opens we won’t be able to come. Suddenly email stating they need 1 month notice on which we said it’s not possible. I told him in this pandemic when there is already so much stress on business can’t take more burden of rent. I told him to keep it simple charge people who will use the hub and those who don’t - don’t charge.

हेरंब केसकर

The best way to send them a counter mail stating that as your force majeure is applied so we were also unable to serve you notice on 1st of July 2020 so we are send this notice in reply to your mail dated so and so and our final working day will be 31at July 2020. So kindly return our deposit amount asap.

Gaurav Agarwal

91springboard show some humanity, if you are facing some issues, discuss it with your community and find a solution.We will tide over this pandemic, but the way you handled the situation will hurt you in the future.

Karishma Jumani

Force Majeure is a purely contractual creation and therefore it depends on the language of the clause. Would need to see the express wording to be able to legally advise further. Please feel free to connect via PM.

Gunraj Singh Khandpur

I would really like insights on how to proceed when you are the landlord and a company as big as Reliance Retail (Digital Specifically) refuses to pay rent for all the duration of Corona Lockdown..

Sayan Ganguly

Why don't the coworking companies start facilitating sub - letting of the spaces? while current occupants are scarced to use the spaces, there is a gradually growing number of people looking for spaces. How about this? If you own a space in 91sb, then91sb seeks your permission in subletting your space at daily or weekly packages. That can cover some part of your rent. Remaining part can be worked out as a carry-forward (just like how bank moratoriums are working).
It is totally understandable that just as you are unhappy with the coworking company, a lot of property owners who allowed these companies to function from their spaces are unhappy as well. So, I think this can be a middle ground. But again, coworking companies need to take a decision after consulting with you. Where there is will, there is a way.

Ayush Maheshwari

I think as a business they have the right to do it. It is a question of ethics, not right or wrong. Completely entitled to do so.

Mudit Mundkur

Legally, the lockdown imposed by the government on 24th March was the event causing the force majeure clause to be invoked. Now that the lockdown has been lifted and offices are allowed to open again, in a way they do have the right to say that the same is over.

Further, the force majeure clause should ideally mention a time period beyond which if the event continues the contract can be cancelled.

Even though, the government is recommending work from home, it is no longer mandatory. Thus, from the stand point of the co working space they are open for business until they follow the sop with respect to hygiene etc. Even we work has started operations and is charging it's customers.

I would say that legally they do have the right to do so. It's only a question of good will or is it morally right to do so

Amar Singh

Firstly theres a lot of investments that has been in Co-working/commercial spaces. Definitly part of these investments has been on Debt and theres no relief coming to the investors from banks.

Banks have made more money by giving morotorium but theres no relief passed on to the investors except some cuts in the interest rates. Definitly its a tough time for everyone... But i think there should be some mandavli possible May be they can propose 50% discounts for the rest of the year or until the lockdown ends so that both parties can survive for timebeing

Shivam Malhotra

Im sure this can be fought legally.You should make a group and try to take this matter legally.Even if they are revoking the clause,they should have given enough time to cancel membership.I was in the middle of changing coworking spaces in April.Lost about 25 days rent till 15th April at my earlier place and my security/booking amount is stuck with the new place.

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