Buy the same home
The buyer and seller have signed successively
Three Real Estate Transfer Agreements
and a supplemental agreement
How does the court determine which agreement is valid?
recently
Guangxi Hechi Nandan County People's Court
Tried together
About the purchase and sale of houses under the "Yin-Yang Contract".
Contract dispute cases
How does the judge decide?
A "yin-yang contract" refers to two or more contracts with different contents between the parties to the same contract, one internal and one external, on the same matter. Among them, the external "yang contract" is to circumvent supervision, reduce the housing payment, and thus reduce taxes and fees, which is not the true intention of both parties, and the actual transaction price is agreed by the "yin contract". Entering into such a "yin-yang contract" seems to save a lot of money, but due to the difference between the registered price and the actual transaction price, it is easy to lead to disputes and endless troubles.
Basic facts of the case
November 18, 2021
Xiao Xiao and Yingzi signed the "Real Estate Transfer Agreement", and the two parties agreed that Xiao Xiao would transfer a real estate located in Chengguan Town, Nandan County, to Yingzi, with a total amount of RMB 820,000, to be paid in two installments, and Yingzi would pay the real estate transfer deposit of RMB 400,000 to Xiao Xiao on the day the agreement came into effect, and Xiao Xiao would help Yingzi complete the transfer procedures within 4 months after the first payment, and Xiao Xiao would be responsible for all the costs incurred in the transfer. After the real estate ownership certificate was processed, Yingzi paid the balance, Xiao Xiao delivered the house, and agreed on the terms of liability that both parties should bear in case of breach of contract.
November 19, 2021
After negotiation, Xiao Xiao and Yingzi signed a new real estate transfer agreement, stipulating that the total selling price of Xiao Xiao's real estate is RMB 500,000, and the adjustment and transfer costs will be borne by Yingzi, and the rest of the agreed matters are consistent with the agreement signed on November 18.
On the same day, after repeated negotiations, the two parties decided that the taxes and fees required for the real estate transfer procedures should be borne by both parties, and other matters were implemented in accordance with the original agreement.
Xiao Xiao was worried that there would be a dispute between the two parties on the transaction price, so after negotiation with Yingzi, Fu Bao, an outsider to the case, signed the "Real Estate Transfer Agreement" on the 18th, with a note at the end of the second page: "All payments are based on receipts, and the transaction amount of Party A and Party B shall be subject to this agreement."
After the above agreement is signed, Xiao Xiao will go through the relevant procedures for real estate transfer after paying the land transfer fee to the Nandan County Natural Resources Bureau in accordance with the procedures......
July 8, 2022
Xiao Xiao paid more than 279,000 yuan for the land transfer and the corresponding taxes, and since the original agreement had expired, the two parties signed a new real estate transfer agreement on the same day (consistent with the content of the agreement signed on November 19, 2021) and handed it over to the tax department and the real estate center. On July 11, 2022, the two parties completed all the procedures for the registration of real estate changes.
Late November 2022
Xiao Xiao filed a lawsuit with the Nandan County People's Court on the grounds that Yingzi's failure to pay the balance of the purchase price as agreed in the contract constituted a breach of contract, requesting the court to order Yingzi to pay 420,000 yuan for the real estate transfer, and based on the overdue payment amount of 420,000 yuan, from September 1, 2022, according to the one-year loan market prime interest rate of 3.65% announced on September 20, 2022, plus 50% to compensate for the loss of overdue payment until the date of actual payment.
Yingzi filed a counterclaim with the court, asking the court to confirm the legality and validity of the real estate transfer agreement signed by the two parties on November 19, 2021 and July 8, 2022.
Differing opinions
Xiao Xiao thinks
The real estate transfer agreement signed by the two parties on November 18, 2021 is legal and valid, and the one signed on the 19th was signed by Yingzi in order to reduce taxes and fees, and the agreement signed by the two parties on the 18th has indicated that the transaction amount between the two parties shall be subject to this agreement. Yingzi should pay the balance of 420,000 yuan.
Yingzi thinks
The real estate transfer agreement signed by the two parties on November 19 was signed on the basis of mutual agreement between the two parties, which has replaced the one signed on the 18th, and the property value was assessed by the tax department during the transfer period, and the value of the property was 500,000 yuan, which was consistent with the total price of the house agreed in the agreement signed on the 19th of 500,000 yuan.
The court found
"Civil entities engaging in civil activities shall follow the principle of good faith, uphold honesty, and abide by their commitments. "After hearing the case in accordance with the law, the Nandan Court organized the parties to conduct cross-examination, and based on the process of signing the contract, the daily reasoning, and the statements of other persons present when the two parties signed the agreement, the comprehensive determination is as follows:
It was determined that the Real Estate Transfer Agreement signed on November 18, 2021 and the Supplementary Agreement on Real Estate Transfer signed on November 19, 2021 were contracts that were expressed and actually performed by both parties.
From the review of the contents of the two contracts with different transaction amounts, the contracts signed on the 18th made detailed provisions on all relevant matters, which can better reflect their authenticity, and the court upheld them. However, the second and third contracts (with the same content) are relatively simple in content, and there is no clear agreement on some matters, and their purpose is to reduce taxes and fees from the analysis of daily circumstances, which is more reasonable and possible, and is an expression of false collusion and is an invalid contract.
The court ruled that: (1) Yingzi should pay Xiao Xiao the balance of RMB 420,000 for the purchase of the house and compensate for the loss of overdue payment, and compensate for the interest on the loss of overdue payment;
What the judge said
When encountering a yin-yang contract, the judge will comprehensively determine which contract is the true expression of the parties' intentions based on the available evidence and daily reasoning. A contract with a false representation of intent has no legal effect.
However, it is not easy to adduce evidence to prove whether the parties have committed a civil act with false expressions of intent. For example, in this case, Yingzi's defense was rejected, and an important reason was that the difference between the second and third contracts and the initial transaction price reached by the two parties was as high as 320,000 yuan, which was obviously unreasonable. If the two parties in this case only appropriately lower the house price by tens of thousands of yuan, and the price is still within a reasonable range, the judge may find it difficult to confirm which contract is the true expression of the intention of both parties during the trial, and Xiao Xiao will have a greater risk of losing the lawsuit.
Therefore, the judge hereby warns everyone that civil entities should follow the principle of good faith, uphold honesty, and abide by their commitments when engaging in civil activities. When signing a contract, you must not have any luck mentality, seeking truth from facts, abiding by the law is the best way to protect your rights and interests, "yin and yang contract" seems to be able to avoid taxes on the surface, in fact, there are huge potential legal risks, signing a "yin and yang contract" not only to be fined, but may even violate the criminal law, constitute a crime, the gains outweigh the losses.
Source: China Popular Law