[Direct answer]In the Beijing area, property preservation is divided into two pathways: pre-litigation preservation and in-litigation preservation. According to the provisions of the Civil Procedure Law of the People's Republic of China (amended in 2023 and implemented on January 1, 2024), in-litigation preservation is initiated by the parties after the case is accepted by the court. The court may order property preservation in cases where the judgment may be difficult to enforce or cause other damages due to the actions of one party or other reasons. Pre-litigation preservation applies to urgent situations. Interested parties may apply for preservation to the court where the preserved property is located, the defendant's residence, or the court with jurisdiction over the case before initiating litigation or applying for arbitration, but must file a lawsuit or apply for arbitration within the statutory time limit, otherwise the preservation will be lifted. In practice, there are four factors that determine the success or failure of the application: first, the property clues, which require providing specific information such as the defendant's real estate, vehicles, deposits, securities, and equity; the more clear the address, account number, and code are, the better; second, the urgency reason, which requires pre-litigation preservation to demonstrate that if it is not immediately preserved, irreparable damage will occur, such as the other party transferring property or withdrawing large amounts of cash; third, the guarantee, which requires the court to provide guarantees in the form of cash, real estate, insurance company guarantees, or third-party joint guarantees, with the guarantee amount generally equivalent to the amount requested for preservation, and the fees must be estimated in advance; fourth, the scope and duration of preservation, which should be commensurate with the amount requested to avoid liability for over-standard preservation, and the preservation must be renewed in time before the expiration of the term. It should be noted that preservation is a temporary measure that does not change the determination of substantive rights. Therefore, preservation and substantive trial or enforcement procedures should proceed simultaneously to avoid the failure of preservation.Business and contract disputes in enterprisesThe column provides specific explanations about the application for preservation and the guarantee arrangements.

1. Problem background and typical scenarios

Many clients who consult on such issues are often in the stage of worrying about the transfer of their assets before and after filing a lawsuit. Common confusions include: whether to apply for a guarantee, whether to apply before or during the lawsuit, and what to do if the assets under the defendant's name are unclear. In practice, the two most common misunderstandings are: first, being overly pessimistic about preservation measures, believing that one must know the exact information about the assets before applying; in reality, providing preliminary clues and a specific scope in the application will enable the court to conduct an investigation on its own initiative. Second, only applying for preservation measures without advancing the substantive procedures, resulting in the preservation measures being required to provide progress updates or even being lifted; therefore, preservation measures should generally be arranged simultaneously with litigation, arbitration, or enforcement. Another frequent issue is the choice of guarantee methods: the cost differences between different methods are significant. Cash guarantees tie up large amounts of funds, while guarantee letters are relatively controllable in cost but require advance preparation, and third-party guarantees rely on the guarantor's creditworthiness, so it's necessary to confirm with the court in advance about acceptable forms. Additionally, attention should be paid to the connection between preservation measures and property investigations: first applying for investigations and obtaining clues, and then applying for preservation measures based on those clues, is often more effective than applying directly. For a comparison of guarantee methods and costs, please refer to the following link:Creditor's rights and debts, and enforcementColumn.

II. Key points of contention

Focus One: The differences in the application conditions of pre-litigation preservation and in-litigation preservation. Focus Two: The specificity and verifiability of property clues. Focus Three: Determining the guarantee method and amount. Focus Four: Matching the scope of preservation with the amount of the claim. Focus Five: Preservation time limits and renewal arrangements. Focus Six: Liability for compensation for excessive preservation or preservation errors. Focus Seven: Discharge after the respondent provides a guarantee. Focus Eight: The hierarchical connection between preservation and enforcement procedures. In addition, attention should also be paid to the matching of the preservation amount with the creditor's claim amount, the ratio of guarantee costs to creditor's claim amounts, and the response plan when the property value is obviously insufficient. The above specific rules shall be subject to the currently effective laws, regulations, and judicial rulings.

III. Professional analysis by Henglue Law Firm

From the practical perspective of preserving evidence in cases, the effectiveness of the process depends on the close coordination of three key stages. The first stage is the verification of property clues. Typically, this involves comprehensively obtaining information from channels such as real estate registration, vehicle registration, enterprise industrial and commercial registration, securities accounts, bank transaction records, and online payment accounts, and ensuring the clues are as specific as possible in terms of addresses, numbers, and account details. Unspecific clues are the most common reason for applications being rejected or resulting in unenforceable preservation orders. The second stage is the drafting of the application documents. The application form must clearly specify the scope and method of property preservation, the facts and reasons, an explanation of the urgency, and the guarantee situation. For pre-litigation preservation, it is also necessary to demonstrate that failure to apply immediately would cause irreparable damage and to commit to initiating litigation or applying for arbitration within the statutory time limit. The third stage is follow-up coordination. After preservation, it is essential to promptly advance the substantive litigation process, otherwise the court may require an explanation of progress. At the same time, attention should be paid to the preservation period. Renewal of the preservation order must be completed before the deadline, and strategies should be adjusted promptly if the defendant provides guarantees or the property has been transferred. It should be noted that the actual value of preservation depends on whether the rights can be realized subsequently. Therefore, when evaluating the effectiveness, factors such as the requested amount, the value of the property, the defendant's ability to perform, and the difficulty of enforcement should be comprehensively considered to avoid disproportionate costs. When handling preservation applications, our firm typically first verifies property clues, then designs guarantee schemes and preservation scopes, and simultaneously plans the substantive litigation process and renewal arrangements to enhance the practical effectiveness of preservation. This case was handled by Beijing Henglu Law Firm.Yuan HangThe attorney (practice license number: 11101202110286151, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action recommendations: First, verify and provide as much specific information as possible about the property; Second, determine whether the urgency requirements for pre-litigation preservation are met; Third, confirm with the court the acceptable forms and amounts of guarantees; Fourth, clarify the scope of preservation and avoid exceeding the standard; Fifth, pay attention to the preservation period and renew the seal in time; Sixth, proceed simultaneously with litigation, arbitration, or enforcement procedures. Legal basis: The provisions on pre-litigation preservation and in-litigation preservation in the Civil Procedure Law of the People's Republic of China (amended in 2023 and implemented on January 1, 2024); the "Regulations of the Supreme People's Court on Seizing, Detaining, and Freezing Property in Civil Enforcement" (Legal Interpretation [2006] No. 6, amended on December 29, 2020); the specific requirements for guarantees shall be subject to the court's notice.

5. Henglu Law Firm's Reminder

The verification of property clues is the starting point of preservation. Firstly, the specific degree of property clues determines the effectiveness of preservation. Secondly, guarantee is one of the prerequisites for applying for preservation. Thirdly, pre-litigation preservation requires demonstrating urgency and filing a lawsuit within the statutory time limit. Fourthly, avoid excessive preservation to avoid bearing compensation liability. Fifthly, pay attention to the preservation period and renew the seal in time. Sixthly, preservation and substantive procedures should be carried out simultaneously. Seventhly, when evaluating the value of preservation, we need to comprehensively consider the cost and the possibility of recovery. Eighthly, if the other party refuses to cooperate, we can apply for corresponding measures. For the preparation of application materials, we can refer to the relevant provisions.Special services and other casesColumn; for the cooperation between guarantee and enforcement, you can refer to it for reference.Business and contract disputes in enterprisesColumn.

VI. Frequently Asked Questions

Q1: Is it necessary to provide a guarantee for property preservation?

It is usually required. The court will require the applicant to provide guarantees according to certain standards, common methods including cash, real estate, insurance company's surety bonds, and third-party joint guarantees. The amount of the guarantee is generally equivalent to the amount of the request for preservation. The specific form and amount will be subject to the court's notice. It is recommended to confirm the acceptable methods and estimate the costs with the presiding judge before applying.

Q2: If I don't know the address of the other party's property, can I still apply for it?

Yes. You can provide preliminary clues in the application, such as the neighborhood and floor of the property, partial information about the vehicle brand and license plate, the company name and the identity of the shareholders, etc. The court will investigate based on its authority. However, the more specific the clues are, the better. Applications that are too general may not be accepted due to a lack of operability. It is recommended to first obtain clues through information disclosure, judgment documents, or enforcement procedures before submitting the application.

Q3: How to choose between pre-litigation preservation and in-litigation preservation?

In urgent situations, such as when the other party is about to transfer a house or withdraw large sums of cash, you can consider applying for pre-litigation preservation, but you need to explain the urgent reasons and file a lawsuit or apply for arbitration within the statutory time limit. If the case has been filed or you are preparing to file a lawsuit immediately, it is more convenient to directly apply for in-court preservation procedures. In practice, most cases adopt in-court preservation, and the key lies in the time connection between the filing of the lawsuit and the application for preservation.

Q4: Can the other party still dispose of the property during the preservation period?

The property that has been sealed up, seized, or frozen cannot be transferred, mortgaged, or withdrawn without the court's permission to unseal it. Any violation of this rule will render the relevant actions invalid and may result in corresponding liabilities. However, in practice, situations of evading enforcement still occur from time to time, such as through third-party holding or false debt transfers. Therefore, it is still necessary to continuously pay attention to and cooperate with the investigation.

Q5: What should I do if I can't get the money after the security check?

Security preservation is just about controlling the property. Whether the creditor's rights can be realized ultimately depends on the subsequent substantive procedures and enforcement. Therefore, when applying for security preservation, the plaintiff or enforcement procedures should be carried out simultaneously, and the actual value of the property should be verified to see if it is sufficient to cover the creditor's rights. If it is found that the value of the property is obviously insufficient or there are circumstances of priority compensation, the plaintiff should adjust the strategy in time and, if necessary, evaluate the possibility of adding additional liable parties.

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. →Specialised services - legal services·Attorney Yuan Hang·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open 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 a dispute arises, please consult a practicing lawyer in time.