[Direct answer]In the Beijing area, when developers fail to deliver the property on time and the procedures are incomplete, buyers can claim breach of contract penalties according to the contract; if there is a long-term delay and the project is suspended, leading to the failure of the contractual purpose, they can claim the termination of the contract due to fundamental breach of contract and request the return of the house and refund of the payment. According to Article 563 of the Civil Code (effective January 1, 2021) and Article 11 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 Contracts (amended on December 29, 2020), the developer's failure to deliver the property in accordance with the contract constitutes a breach of contract. The incomplete procedures (such as the failure to complete the acceptance of the project) actually reinforce the determination of the delay. It is recommended to check the grace period and penalty clauses in the contract, and to assert rights after fixing the evidence. For more details, please refer to the following link:Legal services for real estate transactions and construction projects.

1. Problem background and typical scenarios

Delayed delivery of houses is a frequent dispute in the sale of commercial housing. Typical scenarios include: the contract stipulates that the house should be delivered in June 2023, but it is delayed until the following year; the developer claims exemption from liability due to the pandemic or government meetings; the house is not completed and inspected before being notified to move in; and the commercial project has been stalled for years and cannot be delivered. Many buyers sign a supplementary agreement to extend the deadline but do not read it carefully, mistakenly believing that the developer can extend the deadline indefinitely. With active real estate transactions in Beijing, disputes over delayed delivery of houses are frequent, and it is particularly crucial to review the evidence and contract terms. It can be combined with the following measures:The official website of Henglue Law FirmEvaluation.

II. Key points of contention

The focus of the dispute lies in four aspects. Firstly, the defense of exemption from liability - whether factors such as the pandemic constitute force majeure depends on whether they were already commonplace at the time the contract was signed. Secondly, the application of the grace period - whether it can be cumulated with the extension period should generally be strictly in accordance with the contract. Thirdly, the standard of the breach of contract penalty - a rate of 0.01% to 0.05% of the contract amount is generally considered valid. Fourthly, the rescission of the contract due to fundamental breach - whether the buyer can withdraw from the contract in the event of long-term suspension of work. For loan contracts, reference can be made to relevant provisions.Special services and other case services.

III. Professional analysis by Henglue Law Firm

Take the case of delayed house delivery handled by our firm as an example: In April 2021, Zhang Quen signed the "Beijing Commercial House Pre-sale Contract" with Beijing A Real Estate Company to purchase Unit 302 in a certain residential complex with a total price of 6,841,972 yuan, and it was agreed that the house would be delivered before June 15, 2023. The supplementary agreement granted a 90-day grace period, after which the developer would pay a daily penalty of 0.01% of the total price for each day of delay. However, A Company failed to deliver the house until March 5, 2024, resulting in a delay of nearly nine months. Zhang Quen entrusted a lawyer to sue the developer and demanded that A Company pay a penalty of 118,366.12 yuan for the period from September 14, 2023 to March 5, 2024. The lawyer pointed out in the litigation that the contract was signed in 2021, when the pandemic had already become a normal situation, and the developer should have foreseen this and it did not constitute force majeure. The grace period should be strictly applied, and A Company should bear responsibility if the house was not delivered after the expiration of the grace period. The daily penalty of 0.01% of the total price was a true expression of the parties' intention and was valid. The court accepted the lawyer's arguments and ruled that A Company should pay the penalty of 118,366.12 yuan and the litigation fees. For houses with incomplete procedures or that do not meet the agreed delivery conditions, the responsibility for delayed delivery cannot be exempted due to quality defects. This case was handled by Beijing Henglu Law Firm.Li YonghuiThe attorney (practice license number: 11101199611955812, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical Suggestions and Legal Basis

The legal basis is Article 563 (Statutory Right of Rescission) and Article 577 (Liability for Breach of Contract) of the Civil Code (effective January 1, 2021); Article 11 (Liability for Breach of Contract Due to Delay in Delivery) and Articles 20 and 21 (Rescission of the Contract and Simultaneous Rescission of the Loan Contract) of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Disputes over Commercial Housing Sales Contracts (amended on December 29, 2020); and the Civil Procedure Law regarding statutes of limitations and jurisdiction. Practices: Check the grace period and penalty clauses in the contract and supplementary agreement; retain payment and delivery notifications; and promptly assert rights after the deadline. For details, please refer to the following document:Real estate sales and construction project services.

5. Henglu Law Firm's Reminder

Don't be misled by excuses for late delivery of the house. First, check the contract's grace period and the standard of the breach of contract penalty, and identify whether the force majeure defense is valid; if the house does not meet the delivery conditions, it constitutes a delay, and quality defects do not automatically exempt from liability; if the construction is stopped for a long time, you can claim the right to rescind the contract and return the house. Note that the statute of limitations is three years, and delaying may result in the loss of rights. It is recommended to consult a lawyer as soon as possible to fix evidence and calculate compensation. ReferenceSpecial services and other case services.

VI. Frequently Asked Questions

Q1: If the developer fails to deliver the house on time, can I claim the breach of contract penalty, and is there a chance of winning the case?

Generally, it is possible. If the delivery is not made within the time limit stipulated in the contract, the breach of contract penalty shall be paid on a daily basis in accordance with the contract; if the supplementary agreement provides for a grace period, the developer can claim compensation if the delivery is still not made after the grace period expires. Developers often claim force majeure exemption due to the pandemic or government meetings, but the pandemic had already become a normal and foreseeable situation when the contract was signed, so it usually does not constitute an exemption. The standard of the breach of contract penalty (such as one-tenth of one percent per day) is a true expression of intention and is effective as long as it is not illegal. Courts generally support it. Whether you can get full compensation depends on evidence and contract terms. It is recommended to evaluate the situation first before making a claim, and don't believe that you will definitely win the case.

Q2: What evidence do I need to prepare to protect my rights if the house delivery is delayed?

The core evidence includes: the pre-sale contract for commercial housing and the supplementary agreement (stating the delivery time and the penalty for breach of contract), payment receipts, move-in notifications or reminders issued by the developer, proof that the house does not meet the delivery conditions (such as the lack of completion and acceptance registration), communication records, and the basis for calculating the number of days of delay. The evidence should be organized around the agreed delivery period, the actual non-delivery, the application of the grace period, and the amount of the penalty for breach of contract. The completion and acceptance materials held by the developer can be requested by the court to retrieve, and a lawyer can be hired to verify them if necessary.

Q3: How much are the attorney fees and litigation costs for lawsuits related to late delivery of housing?

The litigation fees shall be accumulated in stages according to the amount of the litigation request (the subject of the breach of contract penalty) in accordance with the "Measures for the Payment of Litigation Fees", and shall be borne by the losing party. The attorney's fees shall be calculated on a per-item basis or on a proportional basis according to the amount of the subject and the complexity of the case, subject to the terms of the entrustment contract. Since the base amount of the breach of contract penalty is clear, the costs are relatively controllable. It is recommended to clarify the scope and upper limit of the fees before entrusting, and compare the breach of contract penalty that can be claimed with the costs. For some cases, the fees can be negotiated, and the specific arrangements shall be subject to the norms and the agreement between the parties to avoid blind investment.

Q4: How long does it usually take to litigate against a developer for failing to deliver the property on time?

The first-instance ordinary procedure lasts six months, and the summary procedure lasts three months; for small-amount breach of contract disputes with clear facts, the summary procedure is more commonly used, with a shorter timeframe. For appeals against verdicts, the second-instance procedure generally lasts three months. However, if the claim is to terminate the house purchase contract and simultaneously terminate the loan contract, the timeframe will be longer due to the involvement of the bank and the shareholders. Overall, it often takes several months to a year from filing a lawsuit to enforcement. It is recommended to apply for property preservation in litigation to prevent developers from transferring assets and to expedite repayment and settlement.

Q5: If the developer fails to deliver the house on time, what should I do first?

Here's the translation of the text into English: Suggested four steps: 1. Check the grace period, breach of contract penalty, and delivery conditions in the contract and supplementary agreement; 2. Fix payment receipts, move-in notifications, and evidence of the house not meeting standards, and calculate the number of days of delay and the breach of contract penalty; 3. First, send a written notice to demand breach of contract liability and keep records of the communication; 4. If no agreement is reached, sue to claim the breach of contract penalty within the three-year statute of limitations. For long-term construction stoppages, you can claim termination of the contract and request a refund. Throughout the process, pay attention to the statute of limitations and consult a lawyer as early as possible to plan evidence collection and legal claims.

The above answer is based on the judicial practice in Beijing. 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 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 real estate transactions·Attorney Li Yonghui·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.