[Case Summary]This case involves a dispute over a pre-sale contract for commercial housing. Mr. Zhou and Ms. Zhao from Beijing signed a pre-sale contract with the developer on April 19, 2022, with a total price of 5,959,369 yuan. They paid a down payment of 2,389,369 yuan and planned to pay the rest of the loan, as well as the property fees, maintenance funds, etc. However, when they received the house, they found that the house they purchased was directly facing a cemetery about 200 meters away, which the developer had deliberately concealed when selling the house. The couple entrusted Beijing Hengluo Law Firm to handle the case.Wang FangliAttorney,Xue SuhuaThe lawyer, on behalf of the client, claimed to rescind the contract on the grounds of fraud or material misrepresentation. After two court hearings and on-site inspections, the parties finally reached a mediation agreement: the developer agreed to rescind the contract, refund the down payment of 2,389,369 yuan and the repaid principal and interest of the loan, and release the bank loan. The acceptance fee was borne by the developer. The core dispute was whether the developer's failure to inform the client about the existence of a cemetery in the vicinity constituted fraud and whether the contract could be rescinded. The applicable legal provisions are the provisions of the Civil Code on rescinding contracts on the grounds of fraud or material misrepresentation and the principle of good faith.

I. Review of the case

When buying a house, everyone has heard of ocean-view houses and mountain-view houses, but the recent emergence of "graveyard-view houses" has caused many buyers to fall into traps. The most common searches by consumers include "Can I get a refund if I find a cemetery next to the house after buying it?", "What should I do if the developer conceals unfavorable factors?", and "Does the developer need to inform me if the cemetery is outside the red line?". In this case, Mr. Zhou and Ms. Zhao signed a pre-sale contract for a commercial housing in Beijing with a real estate development company on April 19, 2022, with a total price of 5,959,369 yuan. After signing the contract, the couple paid a down payment of 2,389,369 yuan, and the remaining payment was made by loan. They also paid property management fees of 8,106.12 yuan, special housing maintenance funds of 27,572 yuan, and real estate agency fees of 1,590 yuan.

However, it was not until the later stage of receiving the house that the two plaintiffs discovered that the house they purchased was located about 200 meters opposite a cemetery. The developer concealed this fact when selling the house, which also explained why the sales staff did not allow them to view the house on-site at the time of purchase. The two people bought the house for living, and the down payment was their savings over the years. If they had been informed in advance that the house was located opposite a cemetery, they would never have purchased it. To protect their rights, the two people entrusted our law firm to handle the case.Wang FangliAttorney,Xue SuhuaThe lawyer represents the client to protect their rights and interests.

II. The focus of the case

  • Focus 1: Is the existence of a cemetery in the vicinity an important fact that should be disclosed?Although the cemetery is outside the red line, whether it is enough to affect the decision to buy a house and whether the developer has an obligation to inform are the key factors in deciding whether to rescind the contract.
  • Focus II: Is this case fraud or a major misunderstanding?The lawyer claims that there was a misrepresentation of intention due to fraud or a major misunderstanding, and requests the rescission of the contract. To do this, the lawyer needs to prove that the developer's concealment of information was attributable to their own negligence.
  • Focus 3: How to handle the down payment, loan, and ancillary fees after the contract is revoked.How to resolve the principal and interest of the loan, property fees, maintenance funds, etc. in the mediation, and how to cancel the bank loan.

III. Professional intervention by Hengluo Law Firm

The plaintiffs (Mr. Zhou and Ms. Zhao) allege that:The purchase of the house in question was based on a misrepresentation made under fraudulent circumstances or due to a significant misunderstanding. The developer deliberately concealed the existence of the nearby cemetery, an important factor that could have influenced the decision-making process, thereby violating the principle of good faith. We request the rescission of the contract, the return of the payments already made, and the cancellation of the loan.

The defendant (the developer) argued that:The cemetery is not within the project's red line, and the developer has no obligation to inform the buyers. Therefore, buyers should exercise due diligence and not agree to return the house or request a refund.

Legal Opinion by Hengluo Law Firm:After accepting the commission,Wang FangliAttorney,Xue SuhuaThe lawyer immediately started to represent the client:

  • Applying to revoke the contract on the grounds of disputes over the pre-sale contract for commercial housing, the plaintiffs claimed that the error in their intent to sign the contract stemmed from the developer's concealment of information.
  • Submit sufficient evidence to prove that the developer failed to fulfill its obligation to inform buyers about the existence of a cemetery in the vicinity, which is an important factor that could affect buyers' decision-making when purchasing a house. This constitutes intentional concealment and a violation of the principle of good faith.
  • After communicating with the judge multiple times and taking him to the scene to inspect the house, we went through two court hearings and discussions, and used facts to promote mediation.

IV. Outcome of the case

Under the court's mediation, the two parties reached a mediation agreement: the developer agreed to rescind the pre-sale contract for commercial housing, refund the two plaintiffs' down payment of 2,389,369 yuan and the principal and interest of the bank loan they had already repaid, and simultaneously rescind the bank's loan contract; the case acceptance fee in this case was borne by the developer. The two plaintiffs successfully withdrew from the purchase, recovered their down payments, and got rid of the loan burden. The parties were very satisfied with the mediation result. According to the provisions of the Civil Code that a civil legal act performed by a party by fraudulent means or based on a major misunderstanding can be revoked, and the civil legal act should be returned after being revoked, the mediation plan is legally justified.

5. Hengluo Law Firm's Reminder

When purchasing a house, if you encounter unfavorable factors such as "ghost view rooms", the law does not provide no remedies at all. This case was handled by Beijing Henglu Law Firm.Wang FangliAttorney (Practice Certificate No.: 11101201911086939, subject to the certificate issued by the judicial administrative organ);Xue SuhuaThe attorney (practice license number: 11101201211769926, the document issued by the judicial administrative organ shall prevail) acts as the agent. Attorney's advice: Even if the grave is outside the red line, if it is adjacent to the residential area and could affect the residents' decision to purchase, the developer should not deliberately conceal the adverse factors; before signing the contract, the buyer should learn about the surrounding environment by himself and make a prudent choice. If the developer conceals the information, the buyer may claim to revoke the contract and return the house and refund the money according to law.

VI. Common Questions and Answers about Real Estate Sales and Purchases

  1. Q:I only realized after moving in that the house is directly facing a cemetery. Can I ask to check out of the hotel?
    A:If the developer intentionally conceals the existence of a nearby cemetery, an important fact that could affect the buyer's decision to purchase the property, the buyer may claim to rescind the contract and request a refund based on fraud or a material misrepresentation. Whether such a claim can be successful will depend on the concealment behavior and the evidence provided to support it.
  2. Q:The cemetery is located outside the property boundary of the residential community. Do developers still have an obligation to inform the residents about this?
    A:Not being within the red line doesn't mean there's no need to inform. If the unfavorable factors are in close proximity to the residential area and have a significant impact on residents' living conditions and psychological well-being, the developer still has a reasonable obligation to provide warnings based on the principle of honesty and good faith. Deliberately concealing such information may constitute fraud.
  3. Q:The developer concealed the adverse factors. What should I do if I have already applied for a mortgage loan?
    A:After the contract is revoked or terminated, the buyer can simultaneously claim the termination of the bank loan contract, and request the developer to refund the down payment and the principal and interest of the loan already repaid, so as to avoid the buyer bearing the loan alone.
  4. Q:When buying a house, the salesperson didn't allow us to view the property on-site. Can we claim compensation if we later discover problems with the house?
    A:The obstruction of viewing the house by the salesperson can itself be considered one of the clues of concealment. Combined with other evidence showing that the developer knew about the unfavorable factors but failed to disclose them, it can help claimants assert their right to rescind the contract and seek compensation.
  5. Q:When buying a new house and discovering unfavorable factors, what evidence should be preserved?
    A:Keep the sales promotion materials, sandbox photos, communication records, subscription and contract texts, photos and videos of the surrounding area, as well as materials proving that the developer knew about the problem but failed to disclose it, to facilitate litigation or mediation for rights protection.