[Direct answer]The developer's capital chain has broken down, and the construction of the property has been halted (left unfinished). Whether the owners can withdraw from the contract depends on the right to rescind the contract and the statutory conditions for rescission. According to Article 563 of the Civil Code, if the developer delays the delivery of the house and still fails to perform or breaches the contract fundamentally (such as long-term suspension of construction or explicit refusal to perform), the owners may rescind the purchase contract and request the return of the paid house price and interest. However, it should be noted that if the house has been registered online and the bank mortgage loan contract is independent, the withdrawal of the contract also requires the handling of the loan relationship, which is not simply a matter of "getting the money back and leaving". It is recommended to fix the evidence of the suspension of construction as soon as possible, verify the pre-sale funds, and handle the relevant matters through legal channels.Legal services for real estate transactionsFor the evaluation plan, please refer to the details provided below.Beijing Henglu Law Firm.

I. Legal basis and interpretation of provisions

1. Article 563 of the Civil Code of the People's Republic of China (effective as of January 1, 2021)

A party may terminate the contract under any of the following circumstances: the contractual purpose cannot be achieved due to force majeure; before the expiration of the performance period, a party expressly states or indicates by its own actions that it will not perform the main obligations; a party delays in performing the main obligations and fails to perform within a reasonable period after being reminded; the delay in performance or other breaches of contract result in the inability to achieve the contractual purpose. If the developer suspends construction for a long time and fails to deliver the house on time, the owner may claim a fundamental breach of contract and terminate the purchase contract.

2. Article 566 of the Civil Code of the People's Republic of China (effective January 1, 2021)

After the contract is terminated, the party that has not yet performed its obligations shall terminate the performance; and the party that has already performed its obligations may request the other party to restore the original state, take other remedial measures, and have the right to claim compensation for losses. After the purchase contract is terminated, the developer shall return the paid housing price and interest, and compensate the owner for the losses suffered thereby, which is the direct legal basis for the refund of the deposit and the purchase price.

3. Practical judicial interpretation (regarding the refund of unfinished buildings and mortgage loans)

The court often reviews the mortgage loan contract together with the handling of unfinished housing and the withdrawal of housing; the relevant judicial interpretations specify that if the purpose of the commercial housing guarantee loan contract cannot be achieved due to the developer's breach of contract, the contract may be terminated simultaneously, and the remaining loan shall be returned to the bank by the developer. The most common pitfall for owners is to only sue for withdrawal of housing without dealing with the loan, resulting in "having to repay the loan even though the house is gone". In practice, attention should also be paid to variables such as whether the project has entered bankruptcy reorganization or whether the government's special team for ensuring housing delivery has intervened. The timing of exercising the right of termination and the provision of evidence directly affect the possibility of recovering the payment. For more regulations, please refer to the following link:Legal services for real estate transactions.

II. Practical experience of Henglue Law Firm

Based on the practical observations of Beijing Henglu Law Firm in handling similar real estate disputes, there are three common forms of homeowners seeking to withdraw from contracts and protect their rights when developers face funding crises and construction suspensions: First, when developers only temporarily suspend construction and promise to resume work, homeowners may rush to terminate the contract but fail to constitute a fundamental breach of contract. If they sue prematurely, they may be ruled to have breached the contract instead. Second, when projects remain unfinished for a long time and developers are involved in multiple enforcement or bankruptcy cases, returning the down payment after terminating the contract may face enforcement difficulties. In this case, it is necessary to consider creditor's rights declaration and policies for ensuring housing delivery simultaneously. Third, for homeowners who have taken out mortgages, they often ignore the independence of the loan contract and are still required to repay the loan monthly after withdrawing from the contract. The most common pitfalls for parties are "trusting the verbal promises of resuming construction from sales offices" or "stopping loan repayments on their own". The former may lead to losing the opportunity to provide evidence, while the latter may result in being held accountable by the bank. When facing construction suspensions, it is crucial to fix evidence and verify the supervision of pre-sale funds immediately rather than waiting passively. (This section summarizes practical experience and does not cite specific case details or amounts. For more information about related services, please refer to the official website.)Legal services for the purchase and sale of real estate）。

The key points of evidence for the check-out decision:The owner claims to terminate the contract for fundamental breach and must provide evidence such as the duration of the developer's suspension of work, the lack of substantive resumption of work, the reminder letters and receipts, and similar situations of other owners in the same project. It is recommended to establish a simple evidence list: the purchase contract and payment receipts, the mortgage contract, images and announcements of the developer's suspension of work, reminder records to the developer and the housing and urban-rural development department, and clues of changes in the pre-sale fund supervision account. The above materials directly determine the determination of "whether it constitutes a fundamental breach", "the time of termination", and "the order of repayment". The lack of these materials will increase the difficulty of protecting rights. Especially when the developer has entered the bankruptcy procedure, timely declaring claims and paying attention to the government's plan for ensuring the delivery of houses are often more practical than simple litigation (this paragraph is a summary of practical experience and does not cite specific case details and amounts).

The balance between collective rights protection and individual case representation:Owners of unfinished buildings often organize collective rights protection activities, but lawsuits still need to be initiated on the basis of individual purchase contracts. The value of professional lawyers lies in distinguishing between two situations: "contract rescission and refund" and "waiting for the completion of the building", to avoid collective suspension of loans leading to new legal risks; at the same time, they help owners design a combined path of "contract rescission, simultaneous termination of the loan contract, and creditor's rights declaration". Beijing Henglue Law FirmWang DongAttorney,Li YonghuiAttorney,Yu DayiThe lawyer has extensive practical experience in the fields of real estate transactions and contract disputes, and can evaluate the best solution based on the progress of the project. For more details, please refer to the following link:Beijing Henglu Law Firm.

III. Frequently Asked Questions

Q1: How long after the construction of the property is suspended can I request a refund for the purchase of the house?

The law does not stipulate a fixed number of days. The key point is whether it constitutes a fundamental breach of contract. If the developer suspends construction for a long time, fails to resume construction within a reasonable period after being urged to do so, and there is no substantive possibility of delivering the house, the owner may terminate the contract in accordance with Article 563 of the Civil Code. It is generally recommended to first send a notice of default, and then collect evidence of the suspension of construction for more than three months before making a claim, to avoid being deemed to be still within the grace period for performance.

Q2: Do I still need to repay the bank loan after checking out of the hotel?

The purchase contract and the mortgage loan contract are relatively independent, but according to relevant judicial interpretations, if the developer breaches the contract and the contractual purpose is frustrated, the borrower may request to rescind the loan contract simultaneously, and the remaining loan shall be returned to the bank by the developer. If the borrower only sues for the return of the house and does not deal with the loan, the bank may still pursue recovery from the borrower, so the borrower needs to claim both the return of the house and the cancellation of the loan simultaneously.

Q3: If the developer goes bankrupt, can I still get a refund and receive the money for the house?

After the developer enters bankruptcy proceedings, the owner's termination of the contract and return of the house payment will be treated as a creditor's claim, and the recovery of the payment will be affected by the bankruptcy estate. At this time, you should simultaneously pay attention to the government's special team for ensuring the delivery of housing and the supervision account for pre-sale funds, and weigh the pros and cons of "waiting for the delivery of the house" and "terminating the contract and declaring the creditor's claim". If necessary, consult a professional lawyer.

Q4: Can I get a refund for the purchase agreement that hasn't been signed online?

For those who have only signed the subscription agreement but not the formal contract or completed the online signing process, they can claim that the purpose of the reservation contract has failed and request to rescind the contract and return the subscription deposit. For those who have completed the online signing and registration process, the rescission of the contract must follow the contract-rescission procedures. Whether a refund is possible depends on the evidence of payment, fault, and the project's current status. It is recommended to keep the subscription agreement and payment receipts.

Q5: Is there any risk for homeowners to stop their mortgage payments on their own?

There are risks involved. The mortgage loan contract is separate from the purchase contract. Unauthorized suspension of the loan may result in the bank suing and holding the borrower accountable, and could affect their credit rating. The correct approach is to sue to terminate the purchase and loan contracts, and have the developer return the bank loan, rather than unilaterally suspending the loan. If the project is suspended, it is advisable to engage a lawyer as soon as possible to design a comprehensive solution.

IV. Suggestions for Protecting Rights

  • Upon discovering the suspension of work, immediately fix the on-site images, announcements, and payment receipts, and establish a complete list of evidence.
  • Send written reminder letters to the developers and housing and urban-rural development departments and keep the receipts as evidence of fundamental breach of contract.
  • For those who have already taken out a mortgage, they should claim the rescission of both the purchase contract and the loan contract to avoid losing both the house and the money.
  • When the developer is involved in bankruptcy, it is necessary to timely declare creditor's rights and pay attention to the policy of ensuring the delivery of the building, and consult professional lawyers as soon as possible to evaluate the solution path.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence, so as to avoid missing the statutory time limit.Legal services for the purchase and sale of real estate·Beijing Henglue Law Firm