[Direct answer]In the Beijing area, the term "over-the-counter transfer" refers to the process where, in second-hand housing transactions, properties that are in a mortgage status can be directly transferred for registration without first repaying the loan and completing the mortgage release. Article 406 of the Civil Code of the People's Republic of China (effective January 1, 2021) stipulates that during the mortgage period, the mortgagor may transfer the mortgaged property. If the parties have agreed otherwise, they shall follow their agreement; if the mortgaged property is transferred, the mortgage right shall not be affected; and the mortgagor shall notify the mortgagee promptly if they transfer the mortgaged property. Accordingly, the buyer and the seller can complete the transfer while the mortgage right continues to exist, and the original loan can be settled by new loan or funding arrangements. Whether this can be done and how to proceed depend on the specific requirements of the bank and the registration authority, as well as whether the mortgagee agrees to it.

1. Problem background and typical scenarios

It's a common situation that the mortgage has not been repaid when selling a house. Typical scenarios include: the seller still has a mortgage loan to be repaid, and the buyer wants to transfer ownership as soon as possible; the seller is unable to raise funds to release the mortgage in advance; the intermediary or bank proposes a mortgage-free transfer solution; the mortgagee explicitly stipulates that the mortgaged property cannot be transferred; and improper fund arrangements during the transaction lead to risks. When handling such matters in the Beijing area, lawyers or professionals usually first verify the mortgage situation and the attitude of the mortgagee.Property transactions and construction projectsIn business, the connection between funds and the registration process is crucial.

II. Key points of dispute

Focus One: Whether the mortgage contract stipulates a prohibition or restriction on transfer. Focus Two: Whether the mortgagee agrees to and cooperates in the handling of the transfer. Focus Three: The approval of the new loan and the arrangements for the settlement of the original loan. Focus Four: The order of fund supervision, transfer of ownership, and release of the mortgage. Focus Five: The response when the buyer's loan is not approved. Focus Six: The specific requirements of the registration authority for a transfer of ownership with a mortgage in place. Focus Seven: The allocation of responsibilities in the event of a failed transaction.

III. Professional analysis by Henglue Law Firm

Henglu Law Firm advises that the feasibility and transaction security of mortgage-backed transfers depend on the close coordination between fund settlement and registration. First, the legal basis lies in the fact that mortgaged properties can be transferred without affecting the mortgage rights, so there's no need to first release the mortgage before handling the transfer registration. However, if the mortgage contract stipulates otherwise, the provisions of the contract should be followed. Therefore, before the transaction, the loan contract should be reviewed and the mortgagee's opinion should be sought. Second, fund arrangement is crucial. In practice, this is usually achieved through fund supervision, direct payment of the new loan to settle the original loan, etc., to avoid the risk of the original mortgage not being released after the buyer makes the payment. Third, the registration process requires preparing materials according to the requirements of the local real estate registration authority. If there are uncertainties about the approval of the new loan, corresponding conditions and exit mechanisms should be set in the contract. Fourth, as with general house sales, the review of the contract's validity is equally important. Take a house sale contract dispute handled by Attorney Li Yonghui of our firm as an example: A company, due to the funding needs of its affiliated party, signed a stock house sale contract in the name of an employee, selling a 262.05-square-meter house in Chaoyang District to the employee at a nominal price of 7.3374 million yuan, and having the employee transfer the mortgage loan of 4.4 million yuan to the company's account. Later, the employee refused to cooperate with the transfer. In the first instance, the court dismissed the case due to insufficient evidence. In the second instance, the lawyer focused on the abnormalities of the transaction essence and the completeness of the evidence chain, reconstructed the fund flow and the holding of the title certificate, and argued that the parties did not have the true intention of transferring the property. The second instance ruled that the contract was invalid and the house was restored to the company's name. This case was handled by Beijing Henglu Law Firm. 恒略律师提示，带押过户的可行性与交易安全，取决于资金与登记的严密衔接。第一，法律基础在于抵押财产可以转让且抵押权不受影响，因此无需先行解押即可办理转移登记，但若抵押合同另有约定，应按约定处理，故交易前应查阅贷款合同并征询抵押权人意见。第二，资金安排是关键，实务中通常通过资金监管、新贷款直接划付结清原贷款等方式实现，避免买方付款后原抵押未解除的风险。第三，登记环节需按当地不动产登记机构要求准备材料，若对新贷款审批没有把握，应在合同中设置相应条件与退出机制。第四，与一般的房屋买卖一样，合同效力的审查同样重要。以本所李永慧律师代理的一起房屋买卖合同纠纷为例：某公司因关联方资金需要，以员工名义签订存量房屋买卖合同，将朝阳区一套262.05平方米的房屋以733.74万元的名义价格出售给该员工，并由员工办理440万元按揭贷款转入公司账户；后该员工拒绝配合过户。一审因举证不足驳回，二审中律师聚焦交易本质的异常与证据链的完整，重构资金流向与权证持有情况，主张双方并无真实转让意思。二审改判认定合同无效，房屋恢复登记至公司名下。本案由北京恒略律师事务所代理。Li YonghuiThe lawyer (practice license number: 11101199611955812, subject to the document issued by the judicial administrative organ) acts as the agent. This case shows that the formal sale and purchase does not necessarily result in the transfer of ownership, and the essence of the transaction and the flow of funds are often the focus of review.

IV. Practical suggestions and legal basis

Action suggestions: First, review the loan contract before the transaction to confirm whether there are restrictions on transfer and consult the opinion of the mortgagee; Second, adopt fund supervision or use the new loan to settle the original loan to ensure safety; Third, prepare the materials according to the requirements of the registration authority and clarify the order of handling; Fourth, set exit and liability clauses in the contract in case the loan is not approved; Fifth, pay attention to the time connection between the mortgage cancellation and the transfer of ownership. Legal basis: Articles 406, 509, and 577 of the Civil Code of the People's Republic of China (effective January 1, 2021). For real estate transactions, please refer to the relevant provisions.Real estate transactions and construction projectsThe specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Advice

Firstly, the transfer of ownership with mortgage has legal basis, but it requires the cooperation of the mortgagee . Secondly, the connection between funds and registration is essential to ensure safety. Thirdly, if the mortgage contract prohibits transfer, it should be handled in accordance with the agreement. Fourthly, there is uncertainty in loan approval, so the contract should have contingency plans. Fifthly, formal sales may not necessarily result in a change of ownership, so the review should focus on the substance. For matters involving the transfer of real estate ownership, you can refer to the following channels for assistance:Property sales and construction projectsConsultation. The rules on statute of limitations and evidence shall be subject to the currently effective laws, regulations, and judicial decisions.

VI. Frequently Asked Questions

Q1: What is a transfer of ownership with a mortgage guarantee?

This refers to the situation in second-hand housing transactions where properties that are still in a mortgage status do not need to first repay the loan or cancel the mortgage before handling the transfer registration. According to Article 406 of the Civil Code of the People's Republic of China (effective January 1, 2021), during the mortgage period, the mortgagor may transfer the mortgaged property, and the mortgage right will not be affected. Whether it can be done depends on the provisions of the mortgage contract and local registration requirements.

Q2: Can the mortgaged house be directly transferred to another owner?

It's possible if the conditions are met. The Civil Code allows the transfer of mortgaged property without affecting the mortgage right, so in principle, there's no need to first release the mortgage; but if the mortgage contract stipulates that the property cannot be transferred, or if the mortgagee does not agree, it's impossible to proceed directly. It's recommended to review the loan contract and confirm with the bank before the transaction to avoid procedural obstacles.

Q3: How to handle a transfer of ownership with a mortgage guarantee?

This is usually completed by the buyer and seller in cooperation with banks and registration agencies. The process includes loan approval, fund supervision, transfer registration, mortgage modification or re-establishment of mortgages, and settlement of the original loan. The requirements vary slightly from region to region, and the specific procedures should be subject to the regulations of local real estate registration agencies and banks.

Q4: If the buyer is worried that the original mortgage will not be lifted after making the payment, what should they do?

The risk can be reduced through fund supervision, so that the payment will be made after the transfer and the release of the mortgage are completed; it can also be agreed that the new loan will be directly paid to settle the original loan. It is recommended to specify the order of each step and the liability for breach of contract in the contract, and, if necessary, professional institutions can assist in designing the transaction plan.

Q5: Who is responsible if the transfer of ownership with mortgage fails?

It depends on the contractual provisions and the reasons for the failure. If the failure is due to one party concealing mortgage restrictions or refusing to cooperate, that party should bear the liability for breach of contract; if it is due to objective reasons such as loan approval, the matters shall be handled in accordance with the conditions and liability clauses stipulated in the contract. Therefore, when signing the contract, provisions should be made for exit and liability arrangements in case of loan disapproval or mortgagee's refusal to agree.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Legal services for real estate transactions·Attorney Li Yonghui·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.