"The developer has not paid the house for the house bought 16 years ago, and he wants me to compensate for the interest on the breach of contract..."

The contract can be revoked, the house has not been built, one house and two sales, why does the developer refuse to hand over the house for various reasons? After the procurator investigated and verified and submitted a protest, a dispute over the contract for the sale and purchase of a house was changed, and the buyer finally obtained the property.

"The house bought 16 years ago, the developer has not paid the house, but also want me to compensate for the interest of the breach, I have been fighting for 11 years, experienced 15 litigation procedures, the heart disease that has plagued me for many years has finally been solved, really thank you so much ..." Recently, Wang Yanfang wrote in a thank you letter to the Shandong Provincial Procuratorate.

Wang Yanfang was a party to a dispute over a contract for the sale and purchase of a house. Why did she write a thank-you note to the Shandong Provincial Procuratorate? It all started 16 years ago.

The developer believes that the buyer is fraudulent

Request to revoke the purchase contract

On November 5, 2005, Chengyu Real Estate Company and Wang Yanfang signed the "Faculty housing contract", which stipulated that Chengyu Real Estate Company had obtained the land use right and land use planning permit of a plot of land in Dongying City, Shandong Province, and other documents were gradually improved with the construction process, and Wang Yanfang voluntarily raised funds to subscribe for 1 building No. 201 with teacher qualifications. The payment method and term are agreed to be: the subscription fee paid when signing the house subscription letter is converted into the house payment, and the mortgage loan, the down payment is 30% of the total house payment, and the amount is more than RMB 380,000.

After that, the urban real estate company obtained a state-owned land use certificate, and the type of use right was allocation. Later, the plot was adjusted from educational planning land to residential land, and the transfer period was changed to 70 years.

After signing the contract, Wang Yanfang has paid more than 250,000 yuan for the purchase of a house twice, thinking that she could move into the new house on time, but she did not know that this was just the beginning of a series of troubles.

In September 2010, a lawsuit filed against Wang Yanfang in court, saying: "Wang Yanfang has no teaching qualifications, there is fraud, she does not have the qualifications to buy a house, and the house sale contract should be revoked." After trial, the Dongying District Court of Dongying City held that the urban real estate company sold the unbuilt house to the public, the buyer paid the price, the contract involved in the case belonged to the contract for the sale and purchase of commercial housing, and the claim that the contract signed by the two parties was a revocable contract could not be established, and the judgment rejected the litigation claim of the urban real estate company.

Buyers sue developers for one house and two sales

Ask the developer to deliver the house

After the judgment came into effect, Metro Land Company refused to deliver the house.

On March 12, 2015, Wang Yanfang sued the Dongying District Court, requesting Thatoland Real Estate Company to deliver the house and assist in the property registration procedures. However, The City Real Estate Company claimed that because Wang Yanfang had not paid the down payment, the property involved in the case had not been built, and the contract involved in the case could not be performed objectively. Even more unexpectedly, Metro Land later claimed that the house involved in the case was purchased by a third party and had been delivered on May 9, 2013.

The court held that in the 2010 case in which The Urban Land Company sued to revoke the housing sale and purchase contract, the company clearly recognized that the house involved in the case had been completed, and according to the engineering drawings and completion filing materials, it could be determined that the house involved in the case had been completed, and the initial registration had been completed, and it was in a state of pending sale; after the Urban Land Company signed the "Faculty Housing Contract" with Wang Yanfang, it signed a house purchase contract with a third party, which was a repeated sale of the house involved in the case, and the responsibility for the one-bedroom and two-sale lies with the Urban Real Estate Company, and the two contracts are legal and valid.

In addition, according to the testimony and relevant evidence of the security guard of the community where the house involved in the case is located, it can be confirmed that the house involved in the case was still occupied and used by the Metropolitan Real Estate Company in September 2014 and was not delivered, and Wang Yanfang applied for the seizure of the house involved in the case in August 2014, so the subsequent delivery cannot be regarded as legal delivery. In the case that both contracts were legal and valid, but neither of them went through the formalities for the transfer of property rights and the legal delivery was completed, Wang Yanfang's "Housing Contract for Faculty and Staff" was signed first, and his right to exercise the right to claim was first. In order to maintain the normal order of market transactions and protect the honest and law-abiding bona fide buyers, the court upheld Wang Yanfang's litigation claim.

The developer again sued the buyer

Ask for transfer fees and interest

On May 10, 2018, Chengyu Real Estate Company once again sued Wang Yanfang, demanding that Wang Yanfang be ordered to pay the land transfer fee, housing arrears and interest totaling more than 700,000 yuan for the houses involved in the case. After trial, the court ascertained that the nature of the contract for the sale and purchase of the house involved in the case was a contract for the sale and purchase of commercial housing, and the nature of the land of such a contract should be a transfer. If the holder of the right to use land for construction purposes pays the transfer fee and other expenses, it must be based on laws and contractual agreements.

However, when the Urban Real Estate Company signed the "Faculty housing contract" with Wang Yanfang in that year, it only agreed on the land certificate number of the location of the house involved in the case, and did not specify the nature of the land and the supplementary payment of the land transfer fee. The court held that in the development and sale of commercial housing, the land transfer fee as the cost of real estate development should be calculated and included in the price of the sale of the house, the contract clearly stipulates the price of the house, there is no agreement on the land transfer fee, the two parties have not reached an agreement on the payment of the land transfer fee, and the urban real estate company should not separately ask Wang Yanfang to bear it after handing over the transfer fee as a developer. Therefore, the court did not support the claim of The City Land Company that Wang Yanfang should pay the land transfer fee and interest.

As for the interest owed on the house, the court held that the reason why Wang Yanfang claimed that the unpaid down payment was that the Urban Real Estate Company refused to accept it, but Wang Yanfang could pay it through other means, and its failure to pay the down payment constituted a breach of contract, and ordered Wang Yanfang to pay more than 100,000 yuan of interest on the housing arrears of the Urban Real Estate Company.

On January 7, 2019, both Chengyu Real Estate Company and Wang Yanfang appealed to the Dongying Intermediate Court, which rejected the appeal and upheld the original judgment. Wang Yanfang was not satisfied with the second-instance judgment and applied to the Shandong Provincial High Court for a retrial, which ruled to instruct the Dongying Intermediate Court to retry the case. On November 3, 2019, after a retrial, the Dongying Intermediate Court ordered Wang Yanfang to pay interest on the down payment owed by Metro Real Estate Company of more than RMB90,000. Wang Yanfang was not satisfied and applied to the Dongying Municipal Procuratorate for supervision.

The buyer applied for supervision against the judgment

The prosecutor investigates and verifies the solution

After the Dongying Municipal Procuratorate accepted the case, after reviewing the judgment document, it was found that there was no problem with the court's judgment on the land transfer fee, but there was a problem with the judgment on the interest owed on the house. Subsequently, the procurator retrieved the original case file of the dispute between Wang Yanfang and the housing sale contract of the city real estate company. After careful reading of the case file, it was found that Wang Yanfang repeatedly mentioned the use of commissions to pay for the house in the course of the court's trial of the case, and proposed to pay the house payment at the sales office of the city real estate company many times. This detail attracted the attention of prosecutors. In order to ascertain the facts, the prosecutor went to the court and retrieved and viewed the video of the trial related to the case. By viewing the video footage of the trial, combined with the fact that The City Land Company never demanded the remaining down payment from Wang Yanfang, the prosecutor speculated that there was likely to be a situation between the two parties to pay the down payment of the house involved in the case "with commission against the house".

After investigating and reading the case file, the procurator also found two special receipts for the house payment, which stated: Wang Yanfang received 30,000 yuan in housing payment (commission payment) today. After investigation and questioning, a number of witnesses confirmed that they had purchased the property of The City Real Estate Company through Wang Yanfang's introduction.

In the process of reading the case file, the procurator found that Wang Yanfang expressed her willingness to continue to perform the contract in the facts identified in the court trial record formed in 2010, the reply formed in 2014, and the effective judgment of another case in 2015. Combined with the previous trial processes and relevant evidence of other cases associated with this case, it is shown that The Metropolitan Land Company lacked the will and action to perform the contract normally, and did not require Wang Yanfang to pay the remaining down payment before she paid the house in full. Moreover, the metropolitan real estate company has various prevarication situations such as suing to revoke the contract, selling one house and two houses, and claiming that performance cannot be performed. Combined with the fact that the price increase in the Dongying real estate market, it can be concluded that the urban real estate company has the intention of not wishing to perform according to the original contract.

The procuratorate filed a protest

The retrial changed the judgment to the buyer to obtain the property

The law stipulates that if the time limit for performance is unclear, the debtor may perform at any time and the creditor may request performance at any time, but the other party shall be given the necessary time to prepare. Based on this, the procurator found that the existing evidence could prove that Wang Yanfang actively performed the contract involved in the case, that The Urban Land Company lacked the will and action to perform the contract normally, and that the Urban Land Company did not provide evidence requiring Wang Yanfang to pay the remaining down payment, and that Wang Yanfang did not constitute a breach of contract. The basic facts ascertained in the judgment of the court of first instance lack evidence to prove that the application of law was indeed in error. The Dongying Municipal Procuratorate then submitted a protest to the Shandong Provincial Procuratorate.

After review, the Shandong Provincial Procuratorate found that The Metropolitan Real Estate Company did not provide evidence that Wang Yanfang was sluggish in performing her payment obligations, and that the case had applied the law incorrectly in terms of the contract performance period, so it filed a protest with the Shandong Provincial High Court.

On October 9, 2021, the Shandong Provincial High Court held that the "Faculty housing contract" was legal and valid, and the parties should perform in good faith in accordance with the contract. Due to the impact of the litigation dispute between the two parties, Wang Yanfang paid the full amount of the house payment to the Dongying District Court on November 6, 2015, fully fulfilled the contractual obligations, complied with the law, and did not have to pay the interest on the arrears of the house involved in the case.

Urban Real Estate Company developing on educational planning land and selling houses to the public shall foresee changes in the nature of the land in the future and the issue of supplementary payment of land transfer fees, which does not conform to the circumstances of the change of circumstances stipulated in the Interpretation II of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China, and the urban real estate company's claim that Wang Yanfang's request to pay land transfer fees and interest is unfounded in law and will not be supported according to law. The Shandong Provincial Procuratorate's grounds for counter-appeal were established.

In the end, the Shandong Provincial High Court adopted all the procuratorial organs' counter-appeal opinions, revoked the original civil judgment, rejected all the litigation claims of the Metropolitan Real Estate Company, and the house involved in the case was handed over to Wang Yanfang for possession and use.

"The big stone that has been pressing on my heart for more than ten years has finally landed, thanks to the procuratorate, thanks to the procurator, not only for me to recover economic losses, but also to relieve my 16 years of heart disease ..."

(The parties in the text are pseudonyms)

Prosecutors say

Raise awareness of the evidence

Protect your legitimate rights and interests

The contract is the guarantee of the rights and obligations of both parties, and the contract established in accordance with the law is protected by law and is binding on both parties. The parties shall follow the principle of good faith, perform their contractual obligations in accordance with the contract, and must not modify or rescind the contract without authorization. One party shall not obstruct the other party from performing its contractual obligations and enjoying contractual rights due to changes in market conditions.

In this case, the "Faculty housing contract" signed by Metro Real Estate Company and Wang Yanfang was the true intention of the parties, which was legal and valid, and the parties should fully perform their obligations in accordance with the agreement. After the rise in house prices, The Urban Land Company believed that its available benefits were reduced, and refused to perform its contractual obligations on various grounds such as the unsatisfactory subject of the house, the house was not built, the one-bedroom two-sale, and the situation changed, obstructing Wang Yanfang from paying the housing payment, which clearly violated the principle of good faith. As the saying goes, justice may be late, but it will never be absent, and the legitimate rights of wang Yanfang, a bona fide buyer, should and will eventually be protected by law.

From another point of view, this case also gives people a warning: in the market transactions with constantly changing housing prices, consumers must improve their awareness of evidence, carefully read the terms of the contract, and make full use of the rights granted by law in order to better protect their legitimate rights and interests.

Civil procuratorial supervision cases directly face the people, and the effectiveness of case handling affects the people's satisfaction with procuratorial work and the sense of judicial gain. When handling civil cases, procurators shall conscientiously practice the concept of justice for the people, placing the handling of individual cases in the overall situation of maintaining social stability and promoting economic and social development, making full use of political, legal, and procuratorial wisdom, and with the help of professional knowledge, comprehensively implementing policies, handling cases with high quality and efficiency, safeguarding judicial fairness, protecting the legitimate interests of parties, and ensuring the unity of political, legal, and social effects.

Author: Lu Jinzeng, Zhang Bingjing, Li Huiquan

Source: Procuratorial Daily Justice Network