[Case Summary]This case involves a dispute over a land sublease contract. In 2009, Tian * subleased the non-arable land and housing facilities to Zhang *, with a one-time rent of more than 230,000 yuan. Zhang * only paid 10,000 yuan, and the remaining balance remained unpaid for more than 10 years. After mediation in 2020, Zhang * still failed to fulfill his obligations and had no ability to do so (due to the enforcement of the final judgment). Tian * entrusted the Beijing Henglu Law Firm to handle the case.Wang FangliThe lawyer sued to terminate the "Land Sublease Contract". The core dispute is whether the contracting party can terminate the original contract when the mediation agreement is not performed and the other party lacks the ability to perform. Applicable legal provisions: the relevant provisions of the Contract Chapter of the Civil Code of the People's Republic of China. The court ruled that the contract was terminated on February 23, 2023, and the defendant and the third party assisted in vacating the land and housing.

I. Review of the case

What should a lessee do if he/she owes rent for more than a decade and is unable to repay it? The parties often search for terms like "Can the land sublease contract be terminated?", "How to terminate the contract due to rent arrears?", and "How to mitigate losses when the debtor has no assets?". On February 28, 2001, Tian * signed a "Contract" with the village committee to lease non-arable land for 30 years. On October 21, 2009, Tian * signed a "Land Sublease Contract" with Zhang * to transfer the land and housing facilities, with a term ending on February 28, 2031, and a one-time rent of over 230,000 yuan. In 2015, Zhang * signed a "Land Transfer Contract" with Zhao * 1 to transfer the land to Zhao * 1; on May 1, 2020, Zhao * signed a "Beijing City Housing Lease Contract" with Zhao * 2 to lease the courtyard for living until 2040, with an annual rent of 55,000 yuan. Tian * only received 10,000 yuan and the remaining amount was unpaid. In 2020, Tian * sued for mediation, but Zhang * failed to fulfill his promise to pay the balance. During the enforcement process, it was found that Zhang * had no assets in multiple cases and the case was terminated as a loss. Tian * believes that Zhang * is unable to fulfill his obligations, and terminating the contract is the only way to protect his rights, so he entrusted a lawyer to handle the case.Wang FangliThe lawyer sued to terminate the contract. Zhang * argued that the principle of "once-and-for-all" had been violated, that the land was occupied by others and could not be returned, and that the contract should not be terminated. The third parties, Zhao *1 and Zhao *2, claimed that they had suffered the most from the termination of the contract.

II. The focus of the case

  • Focus 1: Can the original sublease contract be terminated?When the mediation agreement is not fulfilled and the other party lacks the ability to perform, does the contract-abiding party have the right to terminate the contract?
  • Focus II: Whether it violates the principle of "no double prosecution for the same offense".Is it a case of duplicative litigation if a case that has been mediated is then sued for contract termination again?
  • Focus 3: The validity of the subsequent subleasing contract.After the original contract is terminated, the basis for the subletting right is lost. What are the rights and interests of the sublessee?

III. Professional intervention by Hengluo Law Firm

The plaintiff claimed in the original lawsuit that:Tian * claimed that he had fulfilled his obligation to deliver, and Zhang *'s payment of only 10,000 yuan constituted a breach of contract. After mediation, he was still unable to collect the full amount and failed to achieve the intended purpose. As the party in compliance with the contract, he had the right to waive the enforcement of the mediation agreement, terminate the "Land Sublease Contract", and demand the return of the land plot.

The defendant and the third party argued that:Zhang * disagreed, claiming that the lawsuit violated the principle of non bis in idem, that the land occupied by Zhao *1 and others could not be returned, and that it would infringe on Zhao *1's rights; Zhao *1 and Zhao *2 claimed that they were the ones who suffered the most damage in this case.

Hengluo Lawyer's Agency Opinion:Wang FangliThe lawyer pointed out that the two parties reached an agreement on the sublease of the land in the Sublease Contract, and Tian * subleased the building facilities and trees together with the contract fee for 230,000 yuan. However, Zhang * has not paid the full amount so far, which constitutes a breach of contract. Although an agreement on payment was reached through mediation, it is still impossible to collect the full amount through enforcement and achieve the purpose of the contract. As the party in breach of contract, Tian * has the right to waive the enforcement of the civil mediation document and claim the rescission of the contract and the return of the land involved in the lawsuit.

IV. Outcome of the case

The court accepted the arguments of Hengluo Law Firm and ruled that the Land Sublease Contract signed by the plaintiff and the defendant on October 21, 2009 was terminated on February 23, 2023; the defendant Zhang * and the third parties Zhao *1 and Zhao *2 shall assist in vacating the land and buildings involved in the case and returning them to the plaintiff Tian *. The court held that the plaintiff has the right to terminate the contract with the defendant, but may not apply for compulsory enforcement of the original mediation agreement anymore; the lawsuit materials were served to the defendant on February 23, 2023, so the contract was terminated on that date. The contract between the defendant and Zhao *1 was based on the original contract. After the original contract was terminated, the usufructuary right was extinguished and the basis for the sublease right was lost, so the contract could not be continued and was terminated; the contract between Zhao *1 and Zhao *2 was also terminated due to the loss of the basis.

5. Hengluo Law Firm's Advice

This case is represented by Attorney Wang Fangli of Beijing Henglu Law Firm (practice license number: 11101201911086939, subject to the document issued by the judicial administrative organ). If the lessee consistently defaults on the rent and lacks the ability to perform the contract, the party in compliance may lawfully terminate the original contract to mitigate losses when mediation fails and the purpose of the contract is frustrated, and handle the subsequent subleasing relationship simultaneously. Note to the lessor: Clearly specify the payment deadlines and the right to terminate the contract due to breach of contract in the contract, and promptly entrust a lawyer to terminate the contract and evict the lessee as soon as the other party lacks the ability to perform the contract, so as to avoid the expansion of losses.

VI. Common Questions and Answers about Land Acquisition and Demolition Cases

  1. Q: Can the land sublease contract be terminated?
    A:Yes. If the lessee breaches the contract fundamentally, fails to perform the obligations even after mediation, and lacks the ability to perform the obligations, the party in compliance with the contract may terminate the contract and demand the return of the land.
  2. Q: How to terminate the contract due to rent arrears?
    A:Collect the subletting contract, payment records, mediation agreement, and final judgment, to prove that the purpose of the contract has failed, and request the court to dissolve the contract and order the tenant to vacate the premises.
  3. Q: How can a debtor limit their losses if they have no assets to be executed against?
    A:The execution of the final settlement agreement indicates that there are no assets. Therefore, it is possible to give up the execution of the mediation agreement and file a lawsuit to terminate the original contract and recover the leased property in order to prevent further losses.
  4. Q: What will happen to the rights and interests of the subsequent lessee after the lease is terminated?
    A:After the original contract is rescinded, the basis for the subletting right is lost, and the sublessee's contract is terminated accordingly. The sublessee should assist in vacating the premises.
  5. Q: Does the principle of "once and for all" preclude the claim for rescission of the contract?
    A:The case that has been mediated is a lawsuit for payment. The termination of the contract is a different claim, which does not necessarily violate the principle of "once a case, never twice". The party concerned may file a claim separately.