Shanghai: The benefits of the soaring housing prices in the transaction are distributed real estate taxes, land sales and the issuance of currency

Summary: The two parties agreed that the seller would transfer the property after obtaining the relocation certificate. However, the policy change has caused buyers to wait another 3 years to be eligible to buy a house. Is the seller obliged to wait 3 years for the transfer?

1

Inspector Modu told Wendy that the house sale and purchase case we were talking about today occurred in Shanghai. [1] The seller won the case in the first instance and second instance. Retrial reversal.

In 2013, the buyer and seller signed a house sale contract with a price of 950,000 yuan. Because the house is a restricted sale relocation house, the seller can get the property certificate and transfer it to the buyer after 3 years of signing the contract.

The contract states that "due to the change of the transfer period due to national policies, the seller should actively cooperate with the buyer to handle the property rights transfer procedures".

Both parties knew at the time that the buyer had paid social security for less than 2 years and was not eligible to buy a house. Soon after signing the contract, the buyer paid 860,000 yuan to get the house, decoration and use.

From 2015 to 2016, shanghai house prices soared, doubling house prices.

In 2017, after the seller got the property certificate, he repeatedly notified the buyer to transfer the property. However, due to the tightening of shanghai's purchase restriction policy, buyers will not be eligible to buy a house until another 2 years.

The buyer asks to wait 2 years for the transfer. The seller said that he also wanted to buy a house, and if he proposed to delay the transfer by 2 years, the buyer would need to pay an additional 700,000 yuan; if the buyer resold the house, he would have to pay an additional 500,000 yuan.

Inspector Mordor went on to say that, based on the seller's description of "resale," the buyer may be a real estate agent.

In the Shanghai real estate market, when there is no qualification for buying a house, some real estate agents pay social security while looking for relocated houses without property rights to buy at a lower price.

They will agree that the buyer has the right to change or appoint the actual buyer. After the house price rises and the relocated house has a property certificate and can be transferred, the buyer directly lets the seller transfer the property to the real buyer. Earn the difference from it.

However, whether this is the case for the buyer is uncertain.

Wendy interjected, wow, this kind of real estate agent is so clever.

Inspector Modu said, but they also have to bear the risk of seller defaults, policy changes and so on.

The seller in this case said that he himself also wanted to buy a house, and the delay in the transfer of ownership affected his purchase of the house, so he believed that the buyer seriously breached the contract and notified the termination of the contract.

The buyer filed a counterclaim in the first instance, requesting the court to directly rule on the transfer. However, the court held that in the case that the buyer was still a housing purchase restriction person in Shanghai at that time, this was a use of the court's effective documents to circumvent the purchase restriction policy. Therefore, it was not supported.

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Inspector Modu said that from a legal point of view, the focus of the dispute in this case is that due to policy changes, the transfer time is delayed, and whether the seller is obliged to wait for 2 years can still be terminated.

However, the essential problem in this case is actually how to distribute the value part of the soaring house price during the period of rapid rise in house prices, due to policy changes that lead to the inability to perform or timely performance of the contract.

Just imagine, assuming that Shanghai house prices have not risen from 2013 to 2019, there should be no disputes in the performance of this contract.

The buyer's eligibility to buy a house was postponed, and the transaction time in this case was changed from 3 years to 6 years, of which Shanghai house prices have risen at least double.

Inspector Mordor asked, how do you think the judgment in this case is reasonable and just?

Wendy said the court of first instance should have directly ruled on the transfer.

Inspector Modu expressed surprise at the plan, saying that the reason the court refused to order a direct transfer was that shanghai's purchase restriction policy could not be circumvented by judicial judgment.

Wendy countered that although the buyer was not eligible to buy a house in 2017, he had it before the policy change and he had fulfilled most of his obligations. The house was also handed over.

Inspector Mordor said, very reasonable. Fortunately, between 2017 and 2019, Shanghai house prices did not rise sharply.

During this period, if the house price rises sharply, and the seller really wants to free up the quota to buy a house, his loss can be great.

In that case, it is legally force majeure and neither party is at fault. However, the seller cannot free up the quota to buy a house, and the actual losses incurred should not be borne by the seller.

Of course, in this case, the value of the increase in shanghai house prices from 2013 to 2016 should not be distributed to the seller. Because the contract originally agreed that the seller would not transfer the property certificate until about 3 years later, and the seller got most of the house payment in 2013.

In 2017, when the first instance judgment of the case terminated the contract, the court could also be fairly resolved if the court could rule that the seller should compensate the buyer for the increase in the value of the house from 2015 to 2016. But then the trade would be wiped out.

The court of first instance did not rule like this. It is simply a matter of terminating the contract, returning the house, and refunding the payment. This is equivalent to allocating the value of the house to the seller for 3 years. Buyers are naturally reluctant.

The buyer is very smart. The court of first instance reminded him that the issue of the refund of the house payment could be handled at the same time, and the buyer did not pay attention to the court. After the verdict came into effect, the buyer did nothing, did not ask the seller for a refund, did not check out, just waited. Wait until 2019 to obtain the qualification to buy a house, apply for retrial.

The retrial contract in this case continued to be performed, and the buyer voluntarily compensated the seller with an additional 200,000 yuan.

You see, when the distribution of benefits involved in the case is reasonable, the interpretation of the contract terms is not a problem at all.

I believe that in 2017, when the buyer's eligibility to buy a house is not met, the seller is not obliged to wait 2 years. However, if the contract is terminated, the seller should compensate the buyer for the value of the previous increase in house price.

Wendy agreed, and then said that from this case, we should pay attention to avoiding the following risks when buying and selling houses:

(1) The performance period of the contract for the sale and purchase of the house should not be too long, and it is best to perform it immediately. Avoid long nights and dreams.

First, after the soaring house price, the seller may default; second, the policy may change at any time, which will hinder the performance of the contract. In this way, the buyer pays for the house and does not get the house; the seller cannot pass the house, affecting himself to replace the house and missing the transaction opportunity.

(2) If it is really impossible to perform in a timely manner, it should be agreed in as much detail as possible, and the handling plan under various policy changes should be agreed.

Inspector Mordor said, not bad. The seller in this case actually has a better way of dealing with it. But let's talk about it today.

The money-making model revealed in this case was discovered by you. Remember to tip. Inspector Mordor smiled and reminded Wendy.

[1] Shanghai Higher People's Court Civil Judgment, (2019) Hu Min Zai No. 21.

Source: Judgment Documents Network. https://wenshu.court.gov.cn/website/wenshu/181029CR4M5A62CH/index.html。

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