[Direct answer]In the Beijing area, the standard of the penalty for developers' delay in handing over the house first depends on the contractual provisions. If there are contractual provisions, the penalty shall be determined according to the provisions of the contract; if there are no contractual provisions or the provisions are unclear, the penalty shall be determined according to the rental standard of similar houses in the same area. According to Article 585 of the Civil Code of the People's Republic of China (effective January 1, 2021), the parties may agree on the amount of the penalty or the method of calculating the compensation for losses; if the agreed penalty is lower than the actual losses, the party may request an increase; if the agreed penalty is excessively high compared with the actual losses, the party may request a reasonable reduction. Regarding the sale of commercial housing, according to Article 13 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Disputes over Contracts for the Sale of Commercial Housing (amended on December 29, 2020), if the contract for the sale of commercial housing does not stipulate the amount of the penalty or the method of calculating the compensation for losses, the amount of the penalty or the compensation for losses may be determined by referring to the rental standard of similar houses in the same area. Therefore, the penalty for delay in handing over the house usually follows the standard of "agreeing on the penalty according to the contract" and "determining the penalty according to the rental standard if there is no contractual provision". Similar issues can be referred to for further reference.Property transactions and construction projectsColumn.

1. Problem background and typical scenarios

Such disputes often arise in several situations: First, the contract stipulates a penalty of several hundredths of a percent per day, but the developer claims that the standard is too high and requests a reduction; Second, the contract only vaguely stipulates the responsibility for breach of contract, without specifying the amount or calculation method; Third, the buyer claims to calculate the penalty based on the actual rental loss, which is significantly different from the standard stipulated in the contract; Fourth, the developer defends against liability or reduces liability by citing the pandemic or government actions; Fifth, the buyer simultaneously claims for the penalty and the termination of the contract, with the two paths overlapping. When handling such cases in Beijing, the court usually first reviews the penalty standard and applicable conditions stipulated in the contract, then verifies the number of days of default and the amount of payments already made, and finally provides evidence to resolve the dispute. For cases involving the enforcement and preservation of funds, reference can be made to the relevant provisions.Creditor's rights and debts, and enforcement casesColumn.

II. Key points of contention

First, the application of the breach of contract penalty standard stipulated in the contract, such as one-ten-thousandth of the daily amount or a certain percentage of the paid amount. Second, the adjustment of the breach of contract penalty that is too low or too high, based on the actual losses. Third, if there is no agreement, it shall be determined according to the rental standard of similar houses in the same area. Fourth, the developer's defenses of exemption or reduction of liability, such as whether the force majeure or government actions are established. Fifth, the calculation and commencement of the breach of contract penalty, which shall be calculated from the day after the expiration of the agreed delivery date to the actual delivery or termination of the contract. Sixth, the connection between the breach of contract penalty and the termination of the contract and compensation for losses. Seventh, the allocation of the burden of proof, with the buyer proving the delay and the developer proving the grounds for exemption from liability. The specific determinations shall be based on the currently effective laws and regulations and judicial judgments. Relevant contract disputes can be referred to for reference.Business and contract disputes in enterprisesColumn.

III. Professional analysis by Henglue Law Firm

Taking the dispute over the pre-sale contract for commercial housing represented by Attorney Tian Jiaoyan of our firm as an example, we can clearly see the application method of the agreed penalty standard. On April 30, 2021, Zhang Quan signed the "Beijing City Commercial Housing Pre-sale Contract" with Beijing * Real Estate Development Co., Ltd. to purchase House No. 302 in a certain residential community, with a floor area of 99.41 square meters and a total price of 6,841,972 yuan. It was agreed that the seller should deliver the qualified commercial housing before June 15, 2023. On the same day, the supplementary agreement stipulated that if the seller was delayed due to its own reasons, a 90-day grace period would be granted during which the seller would not be held liable. After the expiration of the grace period, the seller would pay a penalty of 0.1% of the total housing price per day from the 91st day after the agreed delivery date until the actual delivery date. Zhang Quan paid the full amount, but never received the notice of delivery. The house was delayed for nearly nine months. Zhang Quan entrusted our firm's lawyer to sue for the penalty of 118,366.12 yuan from September 14, 2023 to March 5, 2024. The lawyer sorted out the provisions on the delivery time, the grace period, and the penalty standard, collected payment receipts, move-in notifications, and completion and acceptance records to form a chain of evidence, and argued that the pandemic had already become a normal situation before the contract was signed and did not constitute force majeure. The 0.1% daily penalty standard was the true intention of both parties and did not violate the law. The court accepted the lawyer's opinion and ruled in favor of the penalty of 118,366.12 yuan for the delayed delivery and the litigation fees. This case shows that the calculation of the penalty strictly follows the contractual standard, and when claiming it, we should strictly adhere to the provisions and use payment and delivery records to lock in the time and amount. This case was handled by Beijing Henglu Law Firm.Tian JiayanThe lawyer (practice license number: 11101202111381309, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action proposal: Firstly, check the specific standards and starting conditions of the breach of contract penalty for delayed delivery of the house in the contract. For related key points, you can refer to the following content.Special services and other casesFirst, identify the breach of contract clauses and determine the liability for breach of contract in accordance with the contract provisions. Second, calculate the breach of contract penalties based on the agreed standards by statistically analyzing the number of days of delay and the amount of payments made. Third, collect pre-sale contracts, supplementary agreements, payment receipts, move-in notifications, and proof of delay. Fourth, if the agreed standards are obviously too low, prepare evidence of rent in the same area to request an adjustment. Fifth, if the developer claims force majeure as a defense, require them to provide evidence of the causal relationship. In terms of legal basis, Article 585 of the Civil Code of the People's Republic of China stipulates the agreed breach of contract penalties and adjustment rules; Article 13 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Disputes over the Sale of Commercial Housing stipulates that if there is no agreement, the breach of contract penalties shall be determined by referring to the rent standards of similar houses in the same area.

5. Henglu Law Firm's Reminder

Risk Warning: Firstly, the standard of the penalty for breach of contract shall be governed by the contract provisions. When signing the contract, attention should be paid to the clause of several ten-thousandths of a day and the conditions for calculation; Secondly, if the agreed standard is too low, you can request an increase, but you need to provide evidence of losses such as rent; Thirdly, if the developer defends with force majeure, you should check whether it really affects the delivery of the house and whether the developer has fulfilled its obligation to mitigate losses; Fourthly, the penalty for breach of contract and the path of terminating the contract are different. You should choose according to the current situation of the house. It is recommended to fix the evidence of the delay and calculate the amount as soon as possible.

VI. Frequently Asked Questions

Q1: What is the general standard for calculating the penalty for late delivery of the house?

There is an agreement according to the agreement, and if there is no agreement, the rent shall be calculated according to the standard of 0.01% to 0.1% of the daily rent, based on the paid housing price; according to Article 85 of the Civil Code and Article 13 of the Judicial Interpretation of the Contract for the Sale of Commercial Housing, if the agreement is unclear, the breach of contract penalty may be determined by referring to the rental standard of similar houses in the same area. If the agreed standard is too low or too high, the parties may request the court to adjust it based on the actual losses. The key is to lock in the breach of contract penalty clause and the number of days of delay specified in the contract.

Q2: What evidence do I need to prepare to claim the breach of contract penalty?

The following items should be prepared: the pre-sale contract for commercial housing and the supplementary agreement, which prove the standard of the breach of contract penalty and the conditions for its calculation; payment receipts, which prove the base amount of the housing payment already made; the move-in notice, the announcement of the delay, or the explanation of the overdue situation issued by the developer, which proves the actual delivery time; records of reminders and communication; and evidence of the rent of similar houses in the same area, which is used to claim an increase in the rent. These are used to calculate the number of days of delay, the base amount, and the total amount, and are the core of claiming the breach of contract penalty. The earlier the evidence is fixed, the more accurate it will be.

Q3: How much would the penalty for breaching the contract likely cost?

The fees include attorney's fees and litigation fees. The attorney's fees are negotiated based on the amount of the subject matter and the difficulty of the case; the litigation fees are charged in stages according to the amount of the litigation request (the amount of the breach of contract penalty), and the party at fault may bear part of the fees after the plaintiff wins the case. The subject of the breach of contract penalty is usually less than the total amount of the housing price, so the fees are relatively controllable. The specific amount will be determined based on the amount of the breach of contract penalty and whether a rental evaluation is needed. It is recommended to calculate the fees first and then decide on the entrustment plan and budget accordingly.

Q4: How long will it take to resolve the dispute over the penalty for late delivery of the house?

Negotiation or sending a letter to urge the developer to pay may resolve the issue within a few months; the first-instance litigation under the ordinary procedure generally takes no more than six months, but can be extended if the case is complex. The second-instance litigation takes about three months. If it involves adjustment of the penalty for breach of contract, assessment of the rent, or determination of force majeure, the time will be even longer. The key is to fix the delivery time and payment evidence as soon as possible to avoid repeated procedures. The enforcement stage depends on the developer's ability to repay.

Q5: What should I do if the developer says it's a force majeure and refuses to pay the breach of contract penalty?

The developer should be required to provide evidence of the direct causal relationship between the force majeure and the delay. If the epidemic situation had already become normal before the contract was signed, or if bad weather or government meetings did not constitute substantial obstacles, it would usually be difficult to determine exemption from liability. Purchasers can claim breach of contract penalties in accordance with the contract provisions and legal provisions, and, if necessary, entrust lawyers to review whether the defense is valid. For reference, please refer to the following document:Beijing Henglu Law FirmFor similar cases on the official website, we will file a lawsuit after identifying the number of days of overdue payment and the amount involved based on the payment and delivery records.

The above answer is based on the judicial practice in the Beijing area. The judicial interpretations in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence, to avoid missing the statutory time limits. →Legal services for the purchase and sale of real estate·Attorney Tian Jiayan·Beijing Henglue 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. In the event of a dispute, please consult a practicing lawyer in a timely manner.