[Direct answer]In the Beijing area, when the seller breaches the contract, the buyer may, in accordance with Article 577 of the Civil Code of the People's Republic of China (effective January 1, 2021), claim for the seller to continue to perform the contract, take remedial measures, or compensate for losses; if the conditions for statutory rescission are met, the buyer may rescind the contract and claim compensation in accordance with Article 563. There are three main paths for claiming compensation: first, claiming the agreed penalty, which may be reduced if it is excessively high compared to the actual losses; second, claiming the actual losses, including the price difference of the house, the paid fees, and interest; third, choosing the penalty for the deposit, which is one of the two options, along with the penalty for breach of contract, in accordance with Article 588. If a breach of contract is discovered, the buyer should promptly send a written notice to the seller and verify the ownership status of the house. If necessary, the buyer may apply for property preservation. For more information, please refer to the relevant columns.Property transactions and construction projects.

1. Problem background and typical scenarios

These types of requests for help are common in several situations: first, the seller changes his mind after the house price rises and refuses to cooperate with online signing and transfer of ownership; second, the house is sold twice, and the ownership has already been transferred to others; third, the seller conceals the seizure of the house, mortgage, or ownership disputes, resulting in the inability to perform the contract; fourth, late delivery of the house and late removal of the household registration; fifth, after signing the contract, the seller demands a price increase and refuses to continue to perform the contract. When handling similar cases in Beijing, the court usually first verifies the ownership of the house and the obstacles to performance, and then determines whether to continue to perform the contract or to seek compensation. The adjudication rules for similar breach of contract disputes can be referred to for reference.Property transactions and construction projectsColumn.

II. Key points of contention

First, the determination of the facts of breach of contract. The distinction between refusal to perform, delay in performance, and inability to perform affects the choice of rights of claim. Second, the adjustment of the penalty for breach of contract. According to Article 585 of the Civil Code, if the agreed penalty for breach of contract is excessively high compared to the actual losses caused, the court may reduce it appropriately. In practice, it should be based on the actual losses, taking into account the performance of the contract, the degree of fault of the parties, and the expected benefits. Third, whether the difference in price can be supported. The difference between the market value of the house and the contract price needs to be supported by appraisal reports or contemporaneous transaction records. Fourth, the deposit and the penalty for breach of contract cannot be used concurrently. According to Article 588, one should choose one of them. Fifth, the feasibility of continued performance. If the house has been sealed up or sold to another party and transferred the ownership, it will be difficult to continue the performance, so it is appropriate to shift to claiming for rescission and compensation. Sixth, the timing of preservation. Delay may lead to the house being disposed of again and the execution being frustrated. Specifically, the current effective laws and regulations and judicial judgments shall prevail.

III. Professional analysis by Henglue Law Firm

Take a dispute over a pre-sale contract for commercial housing handled by our firm as an example, we can observe the adjudicative thinking on breach of contract claims and the defense of force majeure. On April 30, 2021, Zhang Quan signed a "Beijing Commercial Housing Pre-sale Contract" with a real estate development company in Beijing to purchase Unit 302 of a certain residential community with a total price of 6,841,972 yuan, with a delivery date agreed upon as June 15, 2023. The supplementary agreement granted a 90-day grace period, after which the developer would pay a breach of contract penalty of 0.1% of the total price per day. However, the developer failed to deliver the property until March 5, 2024, nearly nine months after the deadline. Zhang Quan entrusted attorney Tian Jiaoyan of our firm to sue the developer, claiming a breach of contract penalty of 118,366.12 yuan from September 14, 2023 to March 5, 2024. The developer claimed force majeure defenses such as the COVID-19 pandemic, inclement weather, and government meetings, and demanded that the grace period be cumulated with other delays. The attorney pointed out that the contract was signed in 2021, when the COVID-19 pandemic had already become a common phenomenon, which should have been foreseeable and did not constitute force majeure. Inclement weather and other factors did not necessarily lead to a complete suspension of work, so the developer could not evade liability. The grace period should be strictly applied according to the contract, and the developer should pay the breach of contract penalty after the expiration of the grace period. The agreement of 0.1% of the total price per day reflected the parties' true intention and was legally valid. The court adopted the attorney's arguments and ruled that the developer should pay the full breach of contract penalty of 118,366.12 yuan and bear the litigation costs. This approach is also applicable to breach of contract claims in second-hand housing transactions: strictly adhering to contract terms, refuting improper defenses, and accurately calculating losses according to contractual standards. In another case, attorney Liu Donghua of our firm represented a commercial property pre-sale dispute where the developer's long-term suspension of work constituted a fundamental breach of contract. The court ruled to rescind the purchase contract and loan contract, return the down payment of 267,188 yuan and the principal and interest of the repaid loan of 154,783.01 yuan, and pay a breach of contract penalty of 50,000 yuan, demonstrating that the path of rescission and compensation in cases of serious breach of contract is also effective. This case was handled by Beijing Henglu Law Firm. 以本所承办的一起商品房预售合同纠纷为例，可以观察违约索赔与不可抗力抗辩的裁判思路。2021年4月30日，张权与北京某房地产开发公司签订《北京市商品房预售合同》，购买某小区302号房屋，总价6841972元，约定2023年6月15日前交付；补充协议给予90日宽展期，期满后按日万分之一支付违约金。该公司直至2024年3月5日才交付，逾期近九个月。张权委托本所田娇艳律师起诉，主张2023年9月14日至2024年3月5日的违约金118366.12元。开发企业以疫情、恶劣天气、政府会议等主张不可抗力免责，并要求将宽展期与其他延期累计计算。律师指出，合同签订于2021年，疫情早已常态化，属于应当预见的范畴，不构成不可抗力；恶劣天气等亦非必然导致全面停工，不能免责；宽展期应严格按约适用，届满后未交房即应计付违约金；日万分之一的约定系双方真实意思表示，合法有效。法院采纳律师意见，判决该公司支付全额违约金118366.12元并承担诉讼费。本案思路同样适用于二手房违约索赔：紧盯合同条款、驳斥不当抗辩、按约定标准算清损失。另一起案件中，本所刘东华律师代理的商铺预售纠纷因开发商长期停工构成根本违约，法院判决解除购房合同与贷款合同，返还首付267188元、已还贷款本息154783.01元等并支付违约赔偿金50000元，说明严重违约情形下解除加索赔的路径同样有力。本案由北京恒略律师事务所代理。Tian JiayanThe attorney (practice certificate number: 11101202111381309, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action recommendations: 1. Upon discovering a breach of contract, immediately send a written notice demanding performance and specifying the deadline for compliance, in order to gather evidence for rescission and claims. 2. Verify the ownership of the property and retrieve registration information to confirm whether there are any seizures, mortgages, or secondary sales. 3. Review the contract terms to determine the standard for breach of contract penalties, the amount of the deposit, and the conditions for rescission. Assess which claim—breach of contract penalties, loss of price difference, or penalty for the deposit—is more advantageous. 4. Evaluate the feasibility of continued performance. If conditions permit, sue to require transfer of ownership and apply for property preservation. 5. If evidence is insufficient, promptly apply for a court investigation order to retrieve transaction and registration materials. Legal basis: - Article 563 of the Civil Code of the People's Republic of China (effective January 1, 2021) stipulates statutory grounds for rescission. - Article 577 establishes breach of contract liability. - Article 584 clarifies that compensation includes expected profits. - Articles 585 and 588 regulate breach of contract penalties and deposits. - Article 20 and Article 21 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Disputes over Commodity Housing Sales Contracts (amended in 2020) address rules for rescission of purchase contracts and concurrent handling of loan contracts, which can be referenced in commodity housing sales cases. - For related process details, please refer to the following resources:Special services and other casesThe column, which involves the reference for the recovery of effective judgments, can be referred to for reference.Creditor's rights and debts, and enforcement casesColumn.

5. Henglu Law Firm's Reminder

Risk Alert: Firstly, the higher the penalty claim is, the better it is not necessarily. If it is excessively higher than the actual loss, it will be reduced at the discretion of the court. Before making a claim, you should estimate the basis of the loss. Secondly, you can only choose between the deposit and the penalty. Before making a choice, you should compare the amounts of the two. Thirdly, if the house is sealed up or sold to another person and transferred to another owner, there is basically no hope of continuing to perform the contract. You should promptly convert the claim into a claim for relief and preserve the other party's property. Fourthly, the statute of limitations is three years, calculated from the date when you know or should know that your rights have been infringed and the date when the obligee knows or should know that his obligations have been breached. Delaying will result in the loss of rights. It is recommended to consult as soon as possible.Beijing Henglue Law FirmFor similar columns on the official website, it's important to gather solid evidence and seize the right moment to act.

VI. Frequently Asked Questions

Q1: If the seller breaches the contract, how much compensation can I get?

The scope of compensation depends on the contractual provisions and the actual losses. The items that can be claimed include: the agreed upon penalty clause. According to Article 85 of the Civil Code, if the penalty is excessively high compared to the actual losses, it will be reduced appropriately. In practice, the reference standard for excessive penalties is usually set at 30% of the actual losses; actual losses, including the price difference of the house, the paid fees, and interest; the penalty for the deposit. If the party receiving the deposit breaches the contract, it shall return the deposit in double, but only one of the penalty for breach of contract and the penalty for breach of contract can be applied. The more complete the evidence and the more rigorous the estimation are, the closer the scope of compensation will be to the expected range. The specific scope of compensation shall be determined by the court.

Q2: What evidence should be prepared to prove that the seller breached the contract?

The following materials should be prepared: the house sale and purchase contract and supplementary agreement, which prove the payment milestones, the transfer deadline, and the standard of the breach of contract penalty; payment receipts and loan approval materials; online signing and filing records and the results of real estate registration inquiries, which prove the ownership status and whether there is a second sale; written reminder letters and delivery receipts; chat records, call recordings, and other evidence of performance communication; and contemporaneous transaction records or appraisal reports, which are used to prove the loss of price difference. The materials should be organized around two levels: the facts of the breach of contract and the scope of the loss. The more systematic the materials are, the more beneficial they will be.

Q3: How much does it cost to file a lawsuit for compensation?

It mainly includes attorney's fees and litigation fees. The attorney's fees are determined through negotiation based on the amount of the subject matter and the complexity of the case, with no unified standard; the litigation fees are charged in stages according to the amount of the litigation request. For claims for breach of contract or compensation for price differences, the fees are calculated according to the standards for property cases. If the plaintiff partially wins the case, the court will share the fees proportionally. Applying for property preservation requires paying additional preservation fees and providing guarantees. It is recommended to first estimate the amount that can be claimed and the strength of the evidence, then evaluate the input and output, and if necessary, start the procedure after negotiating the fee method with the lawyer.

Q4: How long will it take to litigate against the seller for breach of contract?

The first-instance ordinary procedure generally takes no more than six months, and the summary procedure is concluded within three months. However, cases involving appraisals and expert opinions may take longer. The second-instance procedure, in which the other party appeals, typically lasts about three months. For claims seeking continued performance, the process may be repeatedly delayed if the house is sealed up or there are disputes in other cases. The path of rescission and compensation is usually implemented more quickly. After the judgment takes effect, if the other party refuses to pay, it is necessary to apply for compulsory enforcement, and the overall cycle often lasts around one year. Securing the other party's assets as soon as possible can help shorten the actual time for recovering the payment.

Q5: How to handle the situation where the seller refuses to cooperate with the transfer of ownership?

First, send a written notice to the other party and collect evidence of their breach of contract. Then, check whether the house has been sealed up, mortgaged, or resold. If the house meets the conditions for performance, you can sue to require the other party to continue to perform the contract, cooperate with the transfer registration, and apply for property preservation to prevent the house from being disposed of again. If the performance is impossible, you should promptly terminate the contract and claim breach of contract damages, the difference in price, or the penalty for the deposit. Before choosing a path, you should estimate the amount and duration of each option. Timing is crucial—delaying action will narrow your options. For related services, you can refer to the columns listed in Section 4 of the main text.

The above questions and answers are mainly based on the judicial practice in Beijing. There may be differences in the adjudication standards in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

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 Tian Jiaoyan·Beijing Henglue 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 a dispute arises, please consult a practicing lawyer in time.