1. Overall
In the article on project implementation point 2 there is a good deal about the agreed length of the construction period and the article can be read here.
In the same article paragraph 4 we write about changes and in paragraph 5 that claims for deadline extension should be dealt with in a separate article, namely this one.
This article also deals with the sanctions system of the bust entry law if the contractor is delayed.
2. Deadline extension
The central provision and extension of the deadline is buofl. § 11 with the heading “Additional deadline”.
The rules on extension of the deadline are - in principle - by far the same in the law on bustad entry as in, for example, NS 8407 paragraph 33. Our article on these provisions may therefore be of interest and the article can be read here.
The fact that the rules have a great degree of similarity is shown, for example, by section 11, the last paragraph of buofl, which states that the entrepreneur loses his right to an extension of the deadline if he does not notify the consumer “without undue residence” after he became aware of the circumstances justifying the claim.
In other words, failure to notify has a preclusive effect similar to that which is the rule in NS 407, paragraph 33.4, second paragraph.
The rules on how to calculate the duration of the required deadline extension are set out in section 11, third paragraph of buofl. This provision is essentially identical to NS 8407 paragraph 33.5 and we therefore refer to the same article to which we have already taken a link.
In buofl § 11, first paragraph, we find those situations that entitle the contractor to claim an extension of the deadline. There are three cases of these and they are listed in the letters a, b and c.
Letter a mentions changes or additional works that the consumer demands carried out and that cause delays to the work. We have written about changes in the article on project implementation item 4, and we have included a link to this in paragraph 1 above.
The letter b refers to delays caused to the contractor by the consumer or someone responsible for it. This option is probably most practical in those situations where a detached house or cottage is being built on the consumer's property and where the latter has contracted design and/or other ancillary contractors. For all of these, it can occur, or appear, causing delays to the contractor and where the builder is at risk.
Letter c deals with delays caused by circumstances beyond the control of the contractor (force majeur). This is a provision that is rarely used simply because it takes a lot of effort to make use of it. A well-known example from recent times is the covid epidemic. When it hit Norway in March 2020, everyone was unprepared and it took a long time to figure out how to overcome its consequences. Today, a similar outbreak of covid would not represent such a relationship beyond the control of the contractor.
In other words, if a contractor is delayed, one of these three conditions must be able to be invoked. If this is not possible, you will not be entitled to an extension of the deadline.
A contractor must therefore take into account that a lot of what can affect the construction time are conditions that the contractor himself has the risk of.
As an example, commissioning permits take longer to be issued than what the contractor initially assumed. It is not uncommon for apartment projects to submit successive applications for commissioning permits as the works progress. For example, one can imagine that the project consists of five separate high-rise buildings, all large on a common parking basement. Then you start by reapplying for a commissioning permit to excavate construction pits, then permission for concrete works etc with the parking basement itself, and then separate permits for each of the high-rise buildings. These, in turn, can be divided into several partial permits. The high-rise buildings are then completed at different times and you want to hand over apartments as each high-rise building is completed. At the same time, there may be ordinal provisions in the zoning plan that everything should be completed before issuing temporary use permits. All of these steps in the construction case fall within the contractor's risk area, and delays in one or more of these will not, as a rule, entitle the contractor to claim an extension of the deadline.
It is therefore important that developers be careful about how they formulate themselves in terms of construction time.
3. Daybreak and other sanctions in case of delay
3.1 Overview
Section 17 of Buofl contains an overview of four applicable sanctions and these are set out in letters a — d of the provision.
We will deal with the consumer's right to claim daycare (letter a) and the right to claim compensation (letter c).
The other two sanctions are the consumer's right to withhold his own consideration (letter d) and the right to raise if the delay is material (letter b). These sanctions we find no reason to treat. Partly because retention of own performance is such a basic sanction if a counterparty defaults, and partly because the raising of a contract is so special that then lawyer (s) should be involved anyway.
Regarding daily pay and compensation, we would like to highlight that this is also the primary means of sanction in the standard contracts between professionals. We have written a separate article on this based on NS 8407 paragraph 40 which can be read here.
3.2 Daytime mulch
Dagmulkt is dealt with in more detail in buofl § 18.
It follows from Section 18, first paragraph of buofl, that daily allowance must be paid “for the next day” The contractor is late.
This is different from, for example, NS 8407 paragraph 40.3, which states that daycare allowance is paid only for weekdays (i.e. no Sundays and public holidays).
Another difference is the daymulch basis.
In NS 8407 (and other standard contracts between professionals), it is the contract sum that constitutes the day mulch basis. That means the sales tax should be included, but not subsequent surcharges or index adjustment.
When daymulch is to be paid to a consumer, it follows from Section 18, second paragraph of buofl, that the daily mulch basis is not limited to the contract amount, but to “the collected remuneration the contractor shall receive”.
This means that if the contractor is entitled to, for example, 25% higher remuneration than the originally agreed contract amount, the daily allowance will be correspondingly larger.
A third difference that occurs in projects where the property is included as part of the purchase price — typically apartments — the total consideration for all apartments will be significantly higher than the contract amount the developer has in his contract with the general contractor.
This is partially remedied by the fact that the daily mulch rate is 0.75 ! 0/00 when the contract includes property rights to the land, while it is 1.0 ! 0/00 in other cases.
Consequently, there is every reason for a developer to be very careful when arranging construction time with consumers, please refer to our article on project implementation.
Common to the bustad entry law and contracts based on, for example, NS 8407 is that the maximum daybreak period is 100 days. The fact that the daily mulching period is 100 days is implied indirectly by the first and third paragraphs of NS 8407, paragraph 40.3, first and third paragraphs, while it is explicitly stated in section 18 of Section 18, second paragraph, last sentence.
3.3 Replacement
Day mulch is the primary sanction in case of delays, while compensation is something that can be claimed in certain cases.
This is common to contractual relationships that are regulated by the bustad entry law and that are regulated by the standard contracts between professionals.
While daylight savings are something that consumers, builders or general contractors are entitled to without necessarily having a corresponding economic loss, a claim for compensation presupposes that an economic loss has actually been incurred.
The existence of a financial loss is one of four conditions that must be met in order to claim compensation. The other conditions are that there must be a basis of liability, there must be a causal relationship between the basis of liability and the financial loss, and the loss must have been a foreseeable consequence.
Since daylight savings are the primary means of sanctions that require nothing more than that the contractor is late, it is only when the financial loss exceeds the daily allowance that compensation may become relevant to claim, cf. buofl § 19, first paragraph.
In addition, there must be a basis for liability and it follows from section 19, first paragraph of buofl, that the contractor must have acted grossly negligently or contrary to what one calls “honesty and good faith”, cf. buofl § 19, first paragraph.
Secondly, there must be causal relationship between what the contractor did and the loss suffered by the consumer.
It generally takes a lot to get the court to accept that someone has acted grossly negligently or contrary to “honesty or good faith.”
The reason for this is that such behaviour normally appears to be highly objectionable, and the courts are often reticent.
In the case of gross negligence, it is often said that there must be a marked deviation from what is considered to be normal behavior.
We will not go into these moments in more detail, as we assume that most entrepreneurs are committed to acting properly. The issue of damages, gross negligence or breach of “honesty and good faith” will normally arise if a consumer has engaged a lawyer and, for reasons that are difficult to imagine, would consider that the daily allowance is not sufficient to compensate for a loss.
In such cases, it will be safest for an entrepreneur to contact his own lawyer.
