[Direct answer]In the Beijing area, if the lessor sells the leased house, he/she shall notify the lessee within a reasonable period before the sale, and the lessee shall have the right of priority to purchase the house under the same conditions. Article 726 of the Civil Code of the People's Republic of China (effective on January 1, 2021) stipulates that if the lessee fails to expressly indicate his/her intention to purchase within 15 days after the lessor fulfills his/her obligation to notify, it shall be deemed that the lessee has waived the right of priority to purchase; Article 728 stipulates that if the lessor fails to notify the lessee or there are other circumstances that hinder the lessee from exercising the right of priority to purchase, the lessee may request compensation for losses, but the validity of the house purchase contract shall not be affected. The lessee shall expressly indicate his/her intention to purchase in writing within 15 days after receiving the notice and perform the contract under the same conditions. For more details, please refer to the following link:Legal services for real estate transactions and construction projects.

I. Problem Background and Typical Scenarios

The preemptive right to purchase is a frequent issue in housing leases: tenants who have rented a house for many years suddenly find out that it is being sold when the transfer of ownership is completed; tenants want to buy the house, but the landlord has already signed a private contract with a third party; tenants of shops have invested a lot of operating costs in the business district, but face a significant rent increase or eviction from the new landlord. In such situations, whether tenants can purchase the house at the same conditions as the landlord, how to claim their rights in a timely manner, and how to seek remedies when the landlord fails to notify them directly are directly related to the tenants' business and living interests. Landlords, on the other hand, are concerned about the notification period, the determination of "same conditions", and the application of exceptional circumstances. The relevant rules can be referred to here.Legal services for real estate transactions and construction projects.

II. Key points of contention

There are five main points of contention. Firstly, the obligation to notify: the lessor should notify the lessee within a reasonable period before the sale, and the notice should specify the core conditions such as price and payment method. Failure to notify or defects in the notification constitute an obstruction. Secondly, equal conditions: it suffices that the substantial conditions such as price, payment method, and time limit, and the performance period are the same. It is not required that the payment progress be completely consistent, but the difference should be within a reasonable range. Thirdly, the exercise period: if the lessee fails to expressly indicate their intention to purchase within 15 days after receiving the notice, it shall be deemed that they have waived their right to purchase. Claims made after the expiration of the time limit will be difficult to support. Fourthly, exceptional circumstances: if the co-owners of the house exercise their preemptive right to purchase, or if the lessor sells the house to a close relative, the lessee shall not assert any rights. Fifthly, remedies: under the current rules, the lessee can only request compensation for losses and cannot assert that the lessor's sales contract with the third party is invalid. In the judicial practice of the Beijing area, the court reviews the equal conditions with the price as the core, while also taking into account factors such as payment methods.

III. Professional analysis by Henglue Law Firm

When the preemptive right of purchase is infringed, the lessee cannot claim that the sales contract is invalid, but can only seek compensation. However, which sales contracts will be deemed invalid is a closely related practical issue. The housing sales contract dispute case handled by Attorney Li Yonghui fully demonstrates the path of having the contract declared invalid: In September 2020, Company A, due to the financial crunch of its affiliated company and the requirement that the company purchase the house in full payment, signed the "Beijing City Second-hand Housing Sales Contract" in the name of Zhang * who had continuously paid social insurance for five years, and "sold" a 262.05-square-meter house in Chaoyang District to Zhang * for 7.3374 million yuan. The down payment was 2.5774 million yuan, and the remaining 4.4 million yuan was paid by Zhang * through a mortgage and transferred to Company A's account. Later, Zhang * took away the property certificate and refused to cooperate with the transfer. Company A sued to request that the contract be declared invalid and the house be returned. The first-instance court dismissed the case due to insufficient evidence. After Attorney Li Yonghui took over the appeal, he reconstructed the evidence chain based on Article 146 of the Civil Code of the People's Republic of China (effective January 1, 2021): In terms of the flow of funds, the 4.4 million yuan loan went directly to Company A, and Company A then transferred it to its affiliated company, which used the property as collateral to repay the loan; in terms of the holding of the property certificate and fees, the property certificate and loan contract were originally kept by Company A, and the property management fees were paid by the affiliated company. There were also evidence such as the agency agreement and receipts to support this. The second-instance court ruled that the "sale" was a collusive and fraudulent transaction between the parties, and revoked the first-instance judgment, ruling that the contract was invalid and the house should be restored to Company A's name. This case reminds us that sales contracts are not necessarily valid. Transactions with untrue expressions of intent can be declared invalid. However, cases involving lessee's preemptive rights follow a different path, with the focus on equal conditions and a 15-day time limit. 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 includes Article 726 of the Civil Code of the People's Republic of China (effective January 1, 2021) (Preemptive Purchase Right and 15-Day Period), Article 728 (Compensation and Relief for Failure to Notify), and Article 146 (Invalidity of Acts of Collusion and False Representations); the Interpretation of the Supreme People's Court on Several Issues Concerning the Specific Application of Law in the Trials of Urban House Lease Contract Disputes (amended in December 2020) regarding the lessee's preemptive purchase right. Action List: First, after receiving the notice of sale, express in writing within 15 days that you are willing to purchase under the same conditions; Second, keep records when communicating with the lessor and third parties about the price and payment method; Third, if the lessor transfers the property without notice, promptly sue to request compensation for losses; Fourth, if it involves shop operations, simultaneously fix evidence such as operating investments and relocation losses. For details, please refer to the document.Legal services for real estate transactions and construction projects.

5. Henglu Law Firm's Reminder

The preemptive right of purchase is a time-limited right. Once the 15-day period has passed, it is deemed as a waiver, and it is often only possible to claim compensation afterwards. The lessee should respond in writing as soon as they receive the notice, and should not be vague or delay passively. If the lessor fails to notify in accordance with the law, although the lessee cannot claim that the sales contract is invalid, they can claim compensation for tangible and intangible losses. The earlier the lessee provides evidence and the clearer the losses are, the better. When handling similar cases in the Beijing area, it is recommended that the lessee consult immediately after learning of the seller's intention to sell the property.Beijing Henglu Law FirmA professional lawyer completes the fixation of rights during this period.

VI. Frequently Asked Questions

Q1: Can the lessee win if they claim the right of first refusal?

The exercise of the right depends on two conditions: the lease relationship must be legally valid and the lessee must expressly indicate the intention to purchase under the same conditions within 15 days. If the conditions specified in the notice are clear, the lessee responds in writing on time and has the ability to perform the contract, the claim can usually be established; if the lessee fails to respond within the time limit, the conditions differ too much, or the house is jointly owned by the lessee and sold to the lessor's close relatives, the claim will be difficult to support. The conclusion of the case shall be based on the evidence and the court's determination, and no lawyer can unilaterally guarantee victory or defeat.

Q2: What evidence do I need to prepare to exercise the right of first refusal?

The core evidence includes: a legally valid lease contract and proof of rent payment, which demonstrate the existence of the lease relationship; the lessor's notice of sale or evidence of knowledge of the sale, such as text messages, WeChat messages, posted sales information, and third-party viewing records; a written letter expressing the intention to purchase and the delivery receipt; evidence of the lessor's transaction terms with the third party, such as online signing contracts, transaction prices, and payment methods; and evidence of losses, such as the difference in purchase prices, relocation costs, and proof of operational losses.

Q3: How much does it cost to litigate a dispute over the right of first refusal?

The litigation fees shall be paid in accordance with the "Measures for the Payment of Litigation Fees" (State Council Decree No. 481, implemented on April 1, 2007), which stipulates that the litigation fees shall be paid in stages based on the amount of the litigation subject matter. The losing party shall bear the litigation fees, and the party who partially wins the case shall share them proportionally. The amount of the claim is usually the price difference of the house or the additional expenses incurred in purchasing another house. When the base amount is high, the litigation fees will increase accordingly. The attorney's fees shall be determined through consultation between the law firm and the client, and there is no unified government pricing. Before making a claim, it is recommended to first verify the adequacy of the evidence of the price difference and the cost of protecting rights.

Q4: How long will it take to resolve a dispute over the preemptive purchase right?

The period of 15 days after the receipt of the notice is the exercise period of rights. Failure to exercise rights within this period shall be deemed as a waiver of rights, which is the shortest and most critical time limit. After entering litigation, the first-instance ordinary procedure shall be concluded within six months and the summary procedure within three months. Where the evaluation of the value of the house is involved, the appraisal period shall not be included in the time limit for trial. The second-instance procedure generally takes three months. The overall period ranges from several months to one year, and the key point is whether the rights are fixed within 15 days.

Q5: If I want to exercise my preemptive right, what should I do specifically?

Three steps to proceed: First, after receiving the notice, immediately express in writing within 15 days that you are willing to purchase under the same conditions, and keep the proof of service; Second, check the transaction conditions between the lessor and the third party, and promptly raise and fix evidence of major deviations in price and payment methods; Third, if the lessor fails to notify or obstruct the exercise of rights, sue for compensation as soon as possible and apply for property preservation if necessary. Shop tenants should also simultaneously fix evidence of operating losses, and it is recommended to entrust professional lawyers to oversee the process.

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

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 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 a dispute arises, please consult a practicing lawyer in time.