[Direct answer]In the Beijing area, developers forcefully collect "decoration deposits" and "security deposits" when handing over the houses, which is unlawful. Buyers have the right to refuse to pay these deposits. Decoration deposits are not a statutory precondition for house handover. Developers are not allowed to refuse to deliver the houses or withhold the keys on the grounds that the deposits have not been paid. If the purchase contract or supplementary agreement stipulates the provision of decoration deposits, it should be checked whether it increases the buyer's responsibilities and excludes their main rights, which may constitute a standard clause and be invalid. According to Article 497 of the Civil Code of the People's Republic of China, if the party providing the standard clause unreasonably exempts or reduces its own responsibilities and increases the other party's responsibilities, the clause shall be invalid. In the event of forced collection, buyers can refuse to pay and file complaints or initiate legal proceedings. For more details, please refer to the following link:Legal services for real estate transactions and construction projects.

I. Problem background and typical scenarios

During the delivery stage of new houses, some developers or property management companies require owners to pay thousands of yuan as a decoration deposit in the name of "unified management" and "preventing damage to load-bearing structures", before they can pick up the keys or register for decoration. Typical scenarios include: informing owners at the delivery site that they need to pay a deposit, and refusing to give them the keys if they don't pay; bundling the deposit with property management fees and area difference payments; and agreeing to refund the deposit several months after the decoration inspection is passed, but in reality delaying or refusing to refund it. Many owners, fearing they won't get their houses, choose to pay the money reluctantly, only to find it difficult to get a refund afterwards. The decoration deposit is essentially a voluntary agreement, and developers have no right to force it. Moreover, keeping this money for a long time also breeds potential disputes. In cases involving property disputes, owners can refer to the relevant provisions of the Property Law of the People's Republic of China to protect their rights.Special services and other case servicesHandle it.

II. Key points of dispute

There are three key points of the dispute. Firstly, the legality of the charging basis: current laws do not authorize developers to forcibly collect decoration deposits when delivering houses, and such forced collection lacks legal basis. Secondly, the validity of the contract terms: if the contract stipulates a deposit and the buyer signs it, the developer claims to collect it according to the contract; but if the clause is unilaterally drafted and imposes additional responsibilities on the buyer, the buyer can claim that the standard clause is invalid. Thirdly, the conditions and time limits for refund: the agreement that "the deposit will be refunded after the acceptance is completed" is often delayed by developers for various reasons, leading to frequent disputes. For cases involving the review of standard contracts, reference can be made to the relevant provisions.Business and contract dispute resolution services for enterprises\nDetermine the validity of the clause.

III. Professional analysis by Hengluo Lawyers

In the pre-sale contract case of commercial housing handled by Attorney Tian Jiaoyan, who is represented by our firm, it reflects the common tactics of developers in the performance of their obligations, such as "charging additional fees and delivering the houses late". On April 30, 2021, Zhang Quan signed the "Beijing Commercial Housing Pre-sale Contract" with Beijing A Real Estate Development Co., Ltd. to purchase House No. 302 in a certain residential community, with a floor area of 99.41 square meters and a total price of 6,841,972 yuan. It was agreed that the house would be delivered before June 15, 2023. The supplementary agreement granted a 90-day grace period. After the expiration of the grace period, the developer would pay a penalty of one-tenth of one percent of the total price per day of delay. However, A Company did not deliver the house until March 5, 2024, which was nearly nine months later than the agreed delivery date. Zhang Quan entrusted Beijing Henglu Law Firm to handle the case.Tian Jia YanThe lawyer sued, demanding the payment of a breach of contract penalty of 118,366.12 yuan for the delayed delivery of the house from September 14, 2023 to March 5, 2024. Company A claimed that the pandemic and other force majeure events, as well as the grace period, could be accumulated; the lawyer pointed out that the pandemic had become a normal situation and did not constitute force majeure, so the grace period should be strictly applied. The court adopted the lawyer's opinion and ruled that Company A should pay the full breach of contract penalty of 118,366.12 yuan and the litigation fees. This case was handled by Beijing Henglu Law Firm.Tian JiayanThe lawyer (practice license number: 11101202111381309, subject to the document issued by the judicial administrative organ) acts as the agent. Note on this case: When facing additional charges and breaches of contract during the handover process by developers, purchasers should adhere to the contract terms and assert their rights in a timely manner.

IV. Practical suggestions and legal basis

The legal basis is Article 496 and Article 497 (regulations on standard clauses) of the Civil Code of the People's Republic of China (effective January 1, 2021), Article 577 (liability for breach of contract), and the provisions on delivery conditions in 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. Practical advice: Check the contract before taking possession and make it clear that the delivery conditions do not include the deposit; if the deposit is forcibly collected on site, raise objections in writing and refuse to pay; keep the receipts for the deposits paid and, after the expiration of the agreed time limit, request a refund in writing; if the developer refuses to refund, you can file a complaint with the housing and urban-rural development department or the market supervision department, or initiate legal action to recover the deposit. If the group involved refuses to refund, you can seek help from relevant authorities.Creditor-debtor relations and enforcement case servicesCollective claim.

5. Henglu Law Firm's Advice

The decoration deposit is not a "bribe" for taking possession of the house. If the developer refuses to hand over the keys because the deposit has not been paid, it is essentially a breach of contract for delivery. The buyer can refuse to accept the keys and claim damages for the delay in delivery. When signing the contract, the buyer should pay attention to the provisions on the deposit and miscellaneous fees in the supplementary agreement, and promptly raise objections to the standard clauses that increase their own responsibilities. If the deposit has been paid, it is necessary to obtain a receipt and stipulate clear conditions and deadlines for refund. Upon expiration, immediately request a refund in writing to avoid being occupied for a long time. If the developer delays the refund or imposes fees forcibly, consult a lawyer as soon as possible and protect their rights through complaints and litigation. If it involves bundled property fees, the buyer can follow up with legal action.Special services and other case-related servicesHandle them all together.

VI. Frequently Asked Questions

Q1: If the developer insists on collecting the decoration deposit, can I successfully get the house if I refuse to pay it?

Whether you can successfully take possession of the house depends on whether the delivery obligation is conditional on the payment of the deposit. If the contract does not stipulate a deposit but the developer forcibly collects it on-site and withholds the keys, this constitutes a breach of contract in the delivery of the house. You have the right to refuse and demand delivery in accordance with the contract. If no agreement is reached through negotiation, you can file a complaint or initiate legal proceedings to require the developer to fulfill its delivery obligation and pay the overdue breach of contract damages. If the contract explicitly stipulates a deposit and you have signed it, the validity of the developer's withholding the deposit according to the contract is disputable, but the forcible collection can still be challenged. Generally, if the deposit is collected without a contractual stipulation, your chances of refusing to pay and successfully protecting your rights are higher; if the contract stipulates it but the terms are clearly unfair, you can also claim that the standard terms are invalid. The outcome will depend on the contract and evidence, and it is impossible to guarantee the outcome in advance.

Q2: The developer collects a decoration deposit. What evidence do I need to prepare?

The core evidence includes: the sales contract for commercial housing and supplementary agreements (to verify whether there is a deposit agreement), the notice of delivery and on-site notifications (to prove the fact of forced collection), communication records (WeChat messages and audio recordings, to prove that they refused to hand over the keys if the deposit was not paid), receipts or transfer vouchers for the deposits already paid (to claim a refund), and lists of fees such as property management fees and area differences (to prove forced collection). The organization of evidence revolves around "no basis in the contract - forced collection on site - payments already made - obligation to refund". Complete materials are essential to prove forced collection and the obligation to refund. It is recommended to keep records throughout the entire process of house delivery and, if necessary, to record the process with audio or video to collect evidence.

Q3: How much will it cost in attorney's fees and litigation fees to protect one's rights regarding the security deposit for renovation?

The litigation fees are calculated according to the "Measures for the Payment of Litigation Fees" based on the amount of the litigation subject (usually the amount of the deposit and interest), with lower fees for smaller litigation subjects, which are borne by the losing party. Lawyer's fees are charged based on the complexity of the case and the amount of the litigation subject, either on a per-case basis or as a percentage of the litigation subject amount, subject to the terms of the retainer agreement, with no uniform standard. Since the amount of a single deposit is often not high, it is recommended to first file complaints with the housing and urban-rural development departments and market supervision departments to put pressure on the other party, which is more cost-effective. If the complaint is unsuccessful, then evaluate the cost-benefit of litigation to avoid making it uneconomical due to high litigation costs for small-scale disputes. It may also be considered to jointly protect rights collectively to share the cost.

Q4: How long does it usually take to get the renovation deposit back or to protect one's rights and interests?

The complaint process is relatively fast. After reporting to the housing and urban-rural development department or the market supervision department, a response can usually be obtained within a few weeks. If the case goes to litigation, the first-instance ordinary procedure will be concluded within six months, and the summary procedure within three months. Small disputes are often handled through the summary procedure. If the other party appeals, the second-instance procedure usually takes three months. After the judgment takes effect, the application for refund or enforcement will depend on the other party's cooperation. Overall, negotiations and complaints are often resolved within a month, while the litigation process usually takes several months to half a year. It is recommended to promptly send a written reminder for refund and keep the relevant evidence after the expiration of the agreed time limit, so as to avoid delays that may make it difficult to provide evidence.

Q5: I'm required to pay a decoration deposit when receiving the house. What should I do first?

Here's the translation of the four steps into English, with a detailed explanation: 1. Check the contract and supplementary agreement to confirm whether there is indeed a deposit clause. If there's no such clause, refuse to pay the deposit on the spot in writing and note the refusal. 2. Record and videotape the on-site forced collection and key confiscation actions, and keep the delivery notice to establish the facts of the forced actions. 3. Request a formal receipt for the deposit paid and specify the refund conditions and deadlines in writing. Promptly urge the developer to refund after the deadline. 4. If the developer refuses to refund or collects the deposit without justification, first file a complaint with the housing and urban-rural development authority and the market supervision department. If unsuccessful, sue for refund within the statute of limitations and claim overdue interest. Throughout the process, keep all documents and communication records, and if necessary, hire a lawyer to send legal letters and initiate litigation.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Hengluo Lawyers about specific situations.

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 Tian Jiayan·Beijing Hengluo 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.