[Direct answer]In the Beijing area, after developers enter bankruptcy proceedings, the rights of homeowners who have purchased houses are specifically protected: consumers who purchase commercial housing for living purposes and have paid the full price have priority in requesting the delivery of their houses over the right to priority compensation for the construction project price, mortgage rights, and other creditor's rights; if the houses cannot be delivered, the purchasers' right to request a refund of the purchase price after terminating the contract also enjoys the above-mentioned priority status. According to the "Reply of the Supreme People's Court on the Protection of the Rights of Commercial Housing Consumers" (Law Interpretation [2023] No. 1, effective from April 20, 2023) and the "Enterprise Bankruptcy Law of the People's Republic of China" (effective from June 1, 2007), homeowners should verify the status of online signing and registration and payment completion as soon as possible, declare their rights to the bankruptcy administrator in writing, and explicitly demand either the continued performance of the delivery of the house or the termination of the contract and refund of the purchase price. The two options are mutually exclusive. Failure to declare rights within the time limit may affect the realization of rights. Mortgage buyers should also notify the lending bank in time, and relevant issues can be referred to for reference.Real estate transactions and construction projectsColumn.

1. Problem background and typical scenarios

Such crises often occur in several situations: First, developers may be subject to bankruptcy applications by creditors due to a broken capital chain, leaving projects unfinished. Homeowners are worried not only about the inability to receive their homes, but also about the possibility of their down payments being prioritized by mortgagees; Second, homeowners who have completed online signing and registration and paid the full amount but have not yet transferred ownership face uncertain property rights; Third, homeowners who have paid a down payment and taken out a mortgage and have not yet repaid the loan are unsure how the sales contract and mortgage contract will be handled in bankruptcy; Fourth, there is controversy over whether purchasers of commercial properties, office buildings, or those who already own multiple homes can enjoy priority consumer protection; Fifth, for projects with continued construction value, homeowners are torn between pushing for restructuring to ensure the delivery of the building and terminating the contract to recover the payment. When handling similar cases in Beijing, authorities typically first verify online signing and registration, payment receipts, and the status of the construction project, before determining the legal recourse.

II. Key points of contention

Focus I: The identification of the identity of consumers of commercial housing. The key elements are the purpose of residence and the full payment of the purchase price. If the payment ratio is insufficient or the purpose of residence is not met, the protection will be relatively weaker. Focus II: The choice of claims path. The request to continue to perform the delivery of the house and the request to rescind the contract and return the purchase price cannot be concurrently pursued. The choice should be based on the possibility of the project's continuation. Focus III: The order of rights. According to Article 113 of the Enterprise Bankruptcy Law of the People's Republic of China (effective since June 1, 2007), the payment and refund requests of consumers purchasing houses enjoy a higher priority than the bankruptcy estate in the order of repayment. They can resist the priority rights of the project price and mortgages. Focus IV: Whether the houses that have been registered and filed online can be excluded from compulsory execution in the enforcement process. Focus V: The administrator has the right to choose whether to rescind or continue to perform the contract according to Article 18 of the Enterprise Bankruptcy Law when neither party has fully performed the contract. The buyers' countermeasures. Focus VI: After the termination of the sales contract, the handling of the mortgage loan contract. The remaining loan should be returned by the developer, and the buyers should not continue to bear the monthly repayment burden. Specifically, the current effective laws and regulations and judicial rulings shall prevail. For issues involving enterprise restructuring and creditor-debtor disputes, reference can be made to relevant provisions.Business and contract disputes in enterprisesColumn.

III. Professional analysis by Henglue Law Firm

From the practical experience of lawyers from our firm handling developers' bankruptcies and purchase disputes, the success or failure of homeowners' rights protection largely depends on the timing of declaration and the arguments they put forward. Generally, homeowners who have paid the full amount and completed online signing and registration first face the least obstacles in claiming delivery rights. For those who have only paid the down payment and have defects in online signing, the administrator often cites "both parties have not fulfilled their obligations" as a reason to terminate the contract. In this case, they should promptly declare their claims and assert their priority in seeking refunds. Courts and administrators tend to protect consumers with genuine living needs and clear payment records more vigorously, while being stricter towards investment-oriented purchases or those with unclear claims. For projects with no possibility of resuming construction, the administrator tends to guide homeowners to convert their claims into debt declarations for unified compensation. Common pitfalls include: missing the deadline for debt declaration leading to limited rights; being required to choose between claiming delivery and claiming refunds; signing transfer agreements with developers or third parties privately, which undermines priority protection; and mortgage buyers failing to handle loan contracts after the termination of the sales contract, continuing to repay loans unnecessarily. The usual practice of lawyers from our firm is to first verify the evidence of registration and payment, draft rights declaration documents, follow up on creditor meetings and restructuring plans, and, if necessary, file litigation against the administrator's decision to terminate the contract. For related property recovery, please refer to the relevant provisions.Creditor's rights and debts, and enforcement casesColumn.

IV. Practical suggestions and legal basis

Action suggestions: First, immediately verify the status of online signing and filing and the completion of payment, and supplement the invoices, receipts, and bank statements; Second, within the time limit for creditor's rights declaration determined by the court, submit a written declaration of rights to the administrator, clearly stating the claim for continued performance of the house delivery or for rescission of the contract and return of the payment, as well as the priority status; Third, simultaneously notify the lending bank in writing that the mortgage contract will be rescinded upon rescission of the sales contract; Fourth, pay attention to the creditor's meeting and the draft reorganization plan, and timely raise objections to any proposal that damages the purchaser's priority rights; Fifth, preserve the letters of demand for house delivery and the developer's responses, which can be used as the basis for claiming interest losses. For key points of relevant documents, please refer to the following for reference:Special services and other casesThe column. In terms of legal basis, the "Reply of the Supreme People's Court on the Protection of Consumers' Rights in Commercial Housing" (Law Interpretation [2023] No.1, effective from April 20, 2023) establishes the priority of consumers' rights to request delivery of commercial housing and to request refund of the purchase price; Article 18 of the "Enterprise Bankruptcy Law of the People's Republic of China" (effective from June 1, 2007) regulates the manager's right to choose whether to perform the contract, and Article 113 stipulates the order of bankruptcy repayment; Articles 563 and 577 of the "Civil Code of the People's Republic of China" (effective from January 1, 2021) regulate the termination of contracts and breach of contract liability.

5. Henglu Law Firm's Reminder

Risk Warning: First, the deadline for creditor's declaration starts from the date of the court's acceptance announcement. Late declarations can be supplemented, but the declarant will bear the verification costs and may affect the recovery of compensation. It is necessary to pay close attention to the announcement. Second, the profit differences between the two paths of house delivery and refund are huge. It is necessary to comprehensively evaluate the possibility of the project's continuation, the mortgage of the construction project and the status of fund supervision before choosing one claim. Third, do not easily believe in promises such as "priority delivery through internal channels" and sign transfer documents. Fourth, the group of house buyers should maintain a unified stance and take coordinated actions to avoid individual owners reaching private settlements that dilute the overall defense. It is recommended to entrust a lawyer to intervene at the early stage of bankruptcy acceptance, and the lawyer can assist in the following matters:Beijing Henglue Law FirmCheck the official website to learn about the handling experience of similar cases and secure the priority protection status as soon as possible.

VI. Frequently Asked Questions

Q1: Can I still get the house after the developer goes bankrupt?

There is a good chance of success. For consumers who purchase commercial housing for residential purposes and have paid the full price, their right to request delivery of the house shall, in accordance with the Approval No. [2023] 1, take precedence over the right to priority compensation for the construction project price, mortgage rights, and other creditor's rights. Even if there is a mortgage on the house, they can still claim for continued performance of the delivery obligation. If the project meets the conditions for resuming construction or the reorganization is successful, the possibility of delivery will be higher. However, it is necessary to verify the online signing and filing, payment receipts, and the situation of the housing under their name. If the payment has not been completed or it is an investment-type purchase, the protection will be weaker. It is recommended that lawyers first verify the evidence and then determine the claim path.

Q2: What materials need to be declared during the bankruptcy proceedings?

The following materials should be prepared: the commercial housing sales contract and supplementary agreement; the down payment invoice, bank transfer receipt, and loan disbursement certificate; the purchase payment invoice or receipt; the online signing and filing certificate; the notice of urging the developer to deliver the house and the developer's reply; and the identity certificate and household housing situation statement. Submit the materials to the administrator in writing, clearly stating the claim for house delivery or refund and priority protection status, and keep the declaration receipt. The more complete the materials are, the smoother the administrator and the court will determine the nature of the rights.

Q3: How much does it cost to hire a lawyer for a bankruptcy case?

The fees are determined based on the scale of the claim and the stage of the procedure: the creditor's declaration and document stage are relatively controllable; for disputes involving objections to the administrator's actions, rights of recovery, or litigation over contract termination, the fees will be charged separately according to the subject matter of the dispute; the fees for restructuring negotiations and creditor meetings will be negotiated on a periodic basis. Collective entrustment by the purchasing group can significantly reduce costs. It is recommended to first conduct a preliminary assessment of the payment evidence and the project status, and then determine the scope of the entrustment and the budget.

Q4: How long does the bankruptcy process for developers take?

The deadline for creditor's declaration is generally not less than 30 days from the date of the acceptance announcement. In terms of procedure, simple liquidation cases can complete the distribution of assets within a few months, while those involving restructuring may last from one to several years. The timing of house delivery depends on the availability of funds for continued construction and the implementation of the restructuring plan. The refund and compensation depend on the progress of the disposal of bankruptcy assets. Owners should pay close attention to the announcements at various stages, participate in the creditor's meeting in time to exercise their voting rights, and avoid missing the objection window due to outdated information.

Q5: What should I do if I haven't paid the full down payment or only paid a part of it?

Consumers who have paid the full price enjoy the strongest protection; for those whose payments are not completed, according to current rules and judicial practices, purchasers who have paid most of the price for the purpose of residence may still receive priority protection, but the protection will be relatively weaker. The administrator may also claim to terminate the contract in accordance with Article 18 of the Enterprise Bankruptcy Law. At this time, it is advisable to supplement the payment as soon as possible or argue for the priority of returning the payment, and evaluate whether it is worth continuing to perform the contract based on the current effective laws and regulations and judicial rulings. The relevant procedures can be referred to for reference.Real estate transactions and construction projectsColumn.

The above Q&A is 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, so as to avoid missing the statutory time limit. →Legal services for the purchase and sale of real estate·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 you encounter disputes, please consult a practicing lawyer in time.