[Direct answer]In the Beijing area, if real estate agents intentionally conceal major defects in the property (such as seizure, mortgage, haunted houses, or major quality issues), this constitutes fraud. Buyers can claim to rescind the contract, demand the return of the payments made, and request compensation for losses. According to Article 962 of the Civil Code of the People's Republic of China, agents shall truthfully report to the clients on matters related to the conclusion of the contract; if they intentionally conceal important facts or provide false information, they shall not request remuneration and shall bear liability for compensation. Article 500 also stipulates the liability for breach of contract. The key time limit is that the right of rescission shall be exercised within one year from the date when the buyer knows or should have known the grounds for rescission. It is recommended to immediately fix the evidence showing that the agent knew about the defects, and if no agreement can be reached through negotiation, legal action can be taken. For more details, please refer to the following link:Legal services for real estate transactions and construction projects.

I. Problem Background and Typical Scenarios

When buying or selling second-hand houses through intermediaries, information asymmetry puts buyers at a disadvantage. Typical scenarios include: intermediaries facilitating transactions even though they know the house has been sealed up or mortgaged; concealing the fact that the house has been the scene of an abnormal death (commonly known as a "haunted house"); covering up major quality issues such as serious water leaks and structural hazards; fabricating information about transaction value such as school districts and household registration; and concealing the true landlord's offer to profit from the price difference. Many buyers only discover the truth after the transfer of ownership or moving in, mistakenly believing that "once they sign the contract, they have to accept it as it is". In fact, intermediaries have a legal obligation to report information truthfully, and those who intentionally conceal information can be held accountable. For issues involving transaction safety, relevant parties can seek legal recourse.Creditor-debtor relations and enforcement case servicesEvaluate the relief efforts.

II. Key points of dispute

There are three key points of contention in such disputes. Firstly, the "significance" of concealing facts: whether it is sufficient to affect transaction decisions and prices. Generally, it is limited to fundamental matters such as seizure, mortgages, haunted houses, and major quality issues. Minor flaws may not constitute fraud. Secondly, the determination of the agent's "knowledge": it requires proof that the agent knew or should have known about the facts but failed to disclose them. Chat records, internal system records, and neighbor's testimonies are often key pieces of evidence. Thirdly, the nature and scope of liability: whether to claim rescission of the contract, return of the purchase price, and compensation, or to claim breach of contract liability or infringement compensation, which affects the burden of proof and the amount of compensation. For matters involving the validity of the contract, reference can be made to relevant legal provisions.Business and contract dispute services for enterprises.

III. Professional analysis by Henglue Law Firm

Take the housing transaction dispute handled by Attorney Li Yonghui as an example: Company A needed a loan due to the financial crunch of its affiliated company, so it signed the "Beijing City Second-hand Housing Sales and Purchase Contract" in the name of employee Zhang * and "sold" a 262.05-square-meter house in Chaoyang District to Zhang * for 7.3374 million yuan. Zhang * directly transferred the mortgage loan of 4.4 million yuan to Company A's account. Later, Zhang * took away the property certificate and refused to cooperate with the transfer of ownership. Company A sued the court, but the first-instance judgment was dismissed due to insufficient evidence. After Attorney Li Yonghui took over the appeal, he built a complete chain of evidence around the flow of funds, the holding of title certificates, the agency agreement, and the receipts, claiming that there was no genuine sales agreement between the two parties. The second-instance court ruled that the "sale" was a collusive sham, and according to Article 146 of the Civil Code, it revoked the first-instance judgment and ruled that the contract was invalid and the house was restored to Company A's name. This case shows that the genuine intention of the parties and conclusive evidence are the basis for protecting rights. The case was handled by Beijing Henglu Law Firm.Li YonghuiThe lawyer (practice license number: 11101199611955812, subject to the document issued by the judicial administrative organ) acts as the agent. For transactions involving investigations, the lawyer can provide follow-up services.Special services and other case services.

IV. Practical suggestions and legal basis

The legal basis is Article 148 (Fraudulent Contracts May Be Revoked), Article 152 (Time Limit for Exercising the Right of Revocation), Article 500 (Liability for Breach of Contract), and Article 962 (Intermediaries' Obligation to Report Truthfully) of the Civil Code of the People's Republic of China (effective January 1, 2021), as well as the provisions of the Consumer Rights and Interests Protection Law regarding operators' false disclosures. Practical advice: Before signing the contract, check the status of the property, including whether it is under foreclosure or mortgage, and its ownership status by visiting the real estate registration authority; require the intermediary to provide a written confirmation regarding major matters of the house; immediately fix the chat records, the house listing page, and witness clues once any concealment is discovered; claim revocation and seek compensation within one year after learning of the grounds for revocation; and, if necessary, apply for preservation measures. For evidence fixation, relevant materials can be combined with the above-mentioned items.Special services and other case-related servicesDevelop a plan.

5. Henglue Law Firm's Reminder

The agent's concealment does not mean that "once you sign, you have to accept it." The first step is to verify the property rights and major matters of the house, and confirm the concealed facts and their importance; the second step is to fix the evidence that the agent knew about the situation, including communication records, viewing remarks, and internal information; the third step is to determine whether to revoke the contract and request compensation, or to claim breach of contract compensation, as the two have different evidentiary paths; the fourth step is to sue in time within the one-year revocation period. It is important to distinguish the responsibilities of the agent and the landlord, as they may coexist. If you need professional support, you can seek assistance from a lawyer or a law firm.Legal services for real estate transactions and construction projectsEvaluate the protection of rights and interests.

VI. Frequently Asked Questions

Q1: If the agent intentionally conceals the condition of the house, can I win the lawsuit and get compensation?

Whether or not compensation can be obtained depends on whether the agent can prove that he "knowingly and intentionally concealed" important facts, rather than the result of the promise. If the agent conceals fundamental matters such as foreclosure, mortgages, or haunted houses, according to Articles 962 and 148 of the Civil Code, the buyer's claim to rescind the contract, return the payment, and seek compensation will usually be supported; if it is just a minor defect or if you have not conducted reasonable verification, it will be difficult to obtain compensation. It is recommended to first secure evidence of the agent's knowledge and then evaluate the feasibility of litigation. Do not easily believe in unrealistic promises of victory.

Q2: If the agent conceals the disputes, what evidence should I prepare?

The core evidence includes: the intermediary contract and the house viewing confirmation letter (stipulating the intermediary's obligations), the house purchase and sale contract and payment receipts, the intermediary's WeChat or verbal commitment records regarding the condition of the house, objective materials proving the concealment of facts (property rights inquiry information, mortgage seizure records, and testimonies from neighbors or property management), as well as evidence of the damages you have suffered. The evidence should be organized around four points: "the intermediary knew, intentionally concealed, the matter was significant, and caused losses". Chat records and screenshots of the property listing page are particularly crucial.

Q3: How much do lawyers' fees and litigation costs amount to when suing an agency for fraud?

The litigation fees shall be calculated in accordance with the "Measures for the Payment of Litigation Costs" based on the amount of the litigation request (the refunded price and the amount of compensation), and shall be borne by the losing party. The attorney's fees shall be charged on a per-case basis or as a percentage of the litigation amount, depending on the complexity of the case and the amount of the litigation. The specific fees shall be determined by the entrustment contract, and there is no unified government pricing for such cases. Such cases are mostly related to housing payments. It is recommended to first calculate the amount of refund and compensation that can be claimed, and then compare it with the cost of protecting rights before initiating the litigation. For some cases, it is possible to reduce the expenses through complaints and mediation.

Q4: How long does it usually take for an agent to conceal a lawsuit involving a claim?

The first-instance ordinary procedure shall be concluded within six months and the summary procedure within three months; cases with clear facts are mostly subject to the summary procedure. If there is an appeal, the second-instance procedure generally takes three months. If the defendant refuses to perform the judgment after it takes effect, it is necessary to apply for compulsory execution. Overall, it often takes several months from filing a lawsuit to recovering the money. It is recommended to apply for property preservation in parallel during the litigation process, seize the accounts of the intermediary or the responsible person, shorten the recovery period, and prevent the responsible person from transferring the property.

Q5: If I find that the agent has concealed something, what should I do first?

It is recommended to proceed in four steps: First, immediately go to the real estate registration authority to inquire about the house's seizure, mortgage, and property rights status, and fix the objective evidence of concealing the facts; Second, organize all the chat records with the agent, the description of the house shown during the visit, and the house page, to prove that the agent knew but failed to disclose; Third, send a letter to the agent to assert rights and keep the receipt, so as to preserve evidence for litigation; Fourth, file a lawsuit within one year after knowing the grounds for revocation, claiming to revoke the contract, return the payment, and seek compensation. Throughout the process, keep evidence and, if necessary, hire a lawyer to participate in the investigation and negotiation.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the interpretation of the law 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 relevant evidence, 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 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 you encounter disputes, please consult a practicing lawyer in time.