[Case Summary]This case involves a dispute over a housing sales contract. On September 27, 2020, plaintiffs Li * and Jiang * signed a commercial housing sales contract with defendant * Cultural Tourism Development Co., Ltd. to purchase the house No. 104 in Unit 2 of Building 0009. The plaintiffs paid the down payment of 403,638 yuan and 80,000 yuan on November 27, 2019 and July 23, 2020 respectively, and the remaining 310,000 yuan was used to apply for a mortgage loan. The defendant failed to deliver the house on the agreed date and exceeded the deadline by more than 120 days. The plaintiffs demanded to rescind the contract and return the purchase price, and entrusted Beijing Henglu Law Firm to handle the case on their behalf.Xue Suhua、Wang DongAttorney representation. Core disputes: Whether the defendant constitutes a breach of contract for delayed delivery of the house, whether the contract should be rescinded, whether the paid housing price should be refunded, and the assumption of breach of contract liability. Applicable legal provisions: The provisions of the Civil Code on sales contracts, contract rescission, and breach of contract liability, and Article 260 of the Civil Procedure Law.

I. Review of the Case

After paying the down payment, the developer still failed to deliver the house on time. Can the contract be terminated if the delay exceeds 120 days? Many buyers will search for terms like "what to do if the developer delays house delivery", "can the contract be terminated if the developer delays house delivery", and "how to protect rights if the developer refuses to deliver the house after receiving the down payment". On September 27, 2020, the plaintiffs Li * and Jiang * signed a "Commercial Housing Sales Contract" with the defendant * Culture and Tourism Development Co., Ltd., agreeing to purchase the house No. 104 of Unit 2, Building 0009 from the defendant. The contract stipulated the house price, payment deadlines, and breach of contract liabilities. Before and after signing the contract, the plaintiffs paid a down payment of 403,638 yuan on November 27, 2019, and a down payment of 80,000 yuan on July 23, 2020. The remaining 310,000 yuan was used to apply for a mortgage loan from a bank. Now, the defendant has failed to deliver the house on time as stipulated in the contract, and the delay has exceeded 120 days. The breach of contract is serious, so the plaintiffs demand to terminate the contract and return the house payment according to the contract. The defendant disagrees with the plaintiffs' claims, arguing that it did not delay house delivery or breach the contract. The plaintiffs have not paid the full house price, so the defendant can refuse to deliver the house according to the contract.

II. The focus of the case

  • Focus 1: Whether the defendant's failure to deliver the house on schedule and the delay exceeding 120 days constitute a fundamental breach of contract and whether the contract should be rescinded.The delay in handing over the house meets the agreed upon conditions for termination of the contract.
  • Focus II: Whether the plaintiff's down payment should be refunded, and whether either party breached the contract.Reimbursement and determination of liability for breach of contract.
  • Focus Three: If the mortgage loan is not approved and the balance is not paid, how should the responsibility be allocated?The risk allocation when the payment deadline is not clearly stipulated in the contract.

III. The professional intervention of Hengluo Law Firm

The plaintiff claimed in the original lawsuit that:The plaintiff claims that the defendant's delay in handing over the house for more than 120 days constitutes a breach of contract, and demands the termination of the contract and the return of the paid purchase price.

The defendant argued that:The defendant claimed that he did not deliver the house on time and did not breach the contract. The plaintiff failed to pay the full purchase price, and according to the contract, the defendant had the right to refuse to deliver the house.

Legal Opinion by Hengluo Law Firm:After hearing the case from the parties involved, Beijing Henglu Law FirmXue SuhuaAttorney,Wang DongBased on his years of litigation experience and solid legal knowledge, the lawyer analyzed the legal points of the case one by one, and the two plaintiffs immediately decided to hire him. After analyzing and assessing the case and evidence, the lawyer concluded that: the "Commercial House Sale and Purchase Contract" and its annexes signed by the two plaintiffs and the defendant were the true expression of their intentions and did not violate legal provisions, thus being legally valid; now that the plaintiffs have paid the down payment as agreed, the defendant has failed to deliver the agreed-upon house on time, and the contractual purpose of both parties has become impossible to achieve, so the contract should be rescinded and the defendant should return the down payment to the plaintiffs; moreover, the defendant has seriously breached the contract and should bear the liability for breach of contract. During the trial, the defendant submitted a bank loan certificate stating that the plaintiffs' loan had not been settled and the bank would not grant the loan, so the plaintiffs had not paid the balance; the lawyer focused on the validity of the contract and the obligation of delivery, arguing that the remaining housing payment had failed to obtain a loan and the contractual purpose had failed to be achieved, supporting the request for rescission and repayment.

IV. Outcome of the case

The court held that the plaintiff had paid the down payment as agreed, but due to the failure to obtain a bank loan for the remaining housing payment and the failure of the two plaintiffs to pay the housing payment by other means and request the rescission of the contract, the purpose of the contract for the sale of commercial housing between the parties could no longer be achieved, and the contract should be rescinded. The defendant should return to the plaintiff the down payment of 483,638 yuan already paid. Based on the circumstances of the case, the parties agreed that the remaining housing payment would be paid by mortgage loans in addition to the down payment. There was an agreement on the deadline for the down payment, but there was no agreement on the deadline for the mortgage payment. Therefore, the plaintiff's failure to pay the balance and the defendant's failure to deliver the house did not constitute a breach of contract, and neither party should bear the liability for breach of contract to the other party. In accordance with Article 260 of the Civil Procedure Law of the People's Republic of China (double interest for delayed performance) and other provisions, the judgment is as follows: 1. The contract for the sale of commercial housing signed by the plaintiff and the defendant on September 27, 2020 shall be rescinded; 2. The defendant shall return the purchase price of 483,638 yuan to the plaintiff within ten days from the date of effectiveness of this judgment; 3. The plaintiff shall cooperate with the defendant to handle the registration of the contract and the cancellation of the mortgage with the bank within ten days from the date of effectiveness of this judgment; 4. The plaintiff's other claims are dismissed.

5. Henglu Law Firm's Reminder

This case is handled by Beijing Henglu Law Firm.Xue SuhuaAttorney (Practice Certificate No.: 11101201211769926, subject to the certificate issued by the judicial administrative organ);Wang DongThe attorney (practice license number: 11101201910090334, subject to the certificate issued by the judicial administrative authority) acts as the agent. During the purchase process, disputes may arise between the buyer and the seller due to issues such as property handover, loan approval, and breach of contract. When signing the contract, the buyer should clearly specify the property handover deadline, the mortgage payment deadline, and the liability for breach of contract; once there is a delay in property handover, it is necessary to fix the reminder and evidence of breach of contract in accordance with the contract, and if necessary, entrust a professional real estate dispute lawyer to intervene to maximally protect their own legitimate rights and interests.

VI. Common Questions About Real Estate Transactions FAQ

  1. Q:How many days after the developer's delay in handing over the house can the contract be terminated?
    A:It depends on the provisions of the contract. In this case, if the buyer fails to perform its obligations within 120 days after the expiration of the contract term, the buyer may claim to terminate the contract in accordance with the contract; if there are no provisions, the buyer may handle the matter in accordance with the statutory rules on fundamental breach of contract.
  2. Q:After paying the down payment, if the bank refuses to approve the loan, can the developer refuse to deliver the house?
    A:If the contract does not stipulate the deadline for mortgage payments, and the buyer has already paid the down payment and actively applied for a loan, the court may determine that neither party has breached the contract; however, this does not affect the right to rescind the contract and return the payment when the conditions are met.
  3. Q:After the contract is terminated, can I get back the full amount of the down payment I've already paid?
    A:If the contract is terminated due to the inability to achieve its purpose, the seller shall return the purchase price already received; in this case, the court ruled that the developer should return the down payment of 483,638 yuan already paid.
  4. Q:If the developer breaches the contract, can I recover both the purchase price and the breach of contract penalty at the same time?
    A:It depends on the determination of the breach of contract and the contractual provisions. If the court determines that neither party breached the contract (for example, if the mortgage term was not specified in the contract), it may only support the refund and not the penalty for breach of contract. The specific ruling will depend on the evidence presented.
  5. Q:When encountering disputes when buying a house, should you first negotiate or go straight to suing?
    A:First, you can try to negotiate and mediate with the other party. If the negotiation fails, you can file a lawsuit in accordance with the principle of "who claims, who provides evidence". You need to submit evidence such as contracts, payment receipts, and reminder records related to your claims. If necessary, you can hire a professional lawyer to assist you.