[Direct answer]When the seller breaches the contract, the buyer has two main options: First, continue to perform the contract - request the court to order the seller to cooperate with the transfer of ownership and bear the liability for breach of contract, which is suitable for situations such as rising housing prices, unencumbered houses being sealed up, and the buyer having the ability to pay; Second, rescind the contract and claim compensation - request the return of the payment already made, double return of the deposit or payment of the breach of contract penalty, and claim the loss of the housing price difference. The evidence includes the sales contract, online signing records, payment receipts, reminder letters, and communication records with the intermediary. First, send a written reminder to the seller to perform the contract within a specified period, and then sue according to the circumstances. At the same time, apply for property preservation if the house may be resold or mortgaged. For more details, please refer to the following link:Legal services for property sale and purchase disputesOrBeijing Henglue Law Firm.

I. Legal basis and interpretation of provisions

1. Article 577 of the Civil Code of the People's Republic of China (effective January 1, 2021)

When a party fails to perform its contractual obligations or performs them in a manner inconsistent with the agreement, it shall bear such contractual liabilities as continuing to perform the contract, taking remedial measures, or compensating for losses. This is the general basis for buyers to assert their rights after sellers breach the contract: requesting to continue with the transfer of ownership constitutes a claim for actual performance, but is subject to the restrictions of Article 580 of the Civil Code—if there are circumstances where performance is legally or factually impossible (such as the house having been sold to another party or being seized), the court will no longer order continued performance, and the buyer can only resort to claiming compensation instead. Therefore, it is essential to verify the ownership status of the house before suing: whether the house has been sold to another party, mortgaged, or seized will directly determine the litigation path of either "demanding the house" or "demanding compensation".

2. Article 854 of the Civil Code of the People's Republic of China (effective January 1, 2021)

The amount of compensation for losses shall be equivalent to the losses caused by the breach of contract, including the benefits that could have been obtained after the performance of the contract, but shall not exceed the losses that the breaching party could have foreseen or should have foreseen when entering into the contract. In the context of rising housing prices, the loss of the price difference is a typical form of "available benefits". It is hard to say that the seller's breach of contract is unforeseeable, which is the legal basis for the court to support compensation for the price difference. When claiming compensation, attention should be paid to the relationship between the deposit, the breach of contract penalty, and the compensation for losses: the deposit penalty and the agreed breach of contract penalty can only be applied one at a time; when claiming breach of contract penalty or actual losses, the principle of making up for the losses shall be followed, and the claimant shall not obtain profits repeatedly for the same losses.

3. The practical judgment guidelines

The main points to be noted in court practice are as follows: 1. The court generally supports compensation for the price difference, which is typically calculated based on the difference between the contract price and the market price assessed at the time of litigation, and adjustments may be made based on factors such as the buyer's unpaid down payment and financing costs. 2. To enforce the contract, the following conditions must be met: the property must be deliverable (free from mortgages, seizures, or resale), and the buyer's payment capacity must be guaranteed (full payment in one go or subject to fund supervision). If the seller refuses to cooperate after the judgment, the buyer may apply for forced transfer of ownership. 3. The deposit cannot exceed 20% of the total contract price. If the receiving party breaches the contract, it must double the amount paid as compensation. If the agreed penalty exceeds 30% of the actual losses, the seller may request a reduction. In practice, a penalty exceeding 30% of the losses is generally considered excessive. 4. The defense of "the co-owner's unawareness" requires comprehensive review of the signing process, the intermediary's role, and the existence of good faith and consideration. It cannot be refuted solely through verbal denial.

II. Practical Experience of Henglue Law Firm

Based on Henglue's practical observations in handling second-hand housing disputes, the main forms of breach of contract include: the seller refusing to cooperate with the transfer of ownership or imposing additional charges after the price of the house has risen; the seller claiming that the contract is invalid or should be terminated on the grounds that the co-owners are unaware of the transaction or that the mortgage of the house was not disclosed; the seller selling the same house to two buyers and transferring ownership to a third party; and refusing to handle the mortgage release and delaying the transaction. Judges generally take a clear attitude towards breach of contract due to price increases, with the mainstream view supporting the continuation of performance or compensation for the price difference. In cases where the seller has already transferred ownership to a third party, the court orders the seller to compensate for the price difference and the fees paid. Even if the co-owners have not signed the contract but the seller has received the payment and the buyer acted in good faith, the contract's validity is generally not denied. The most common pitfalls for parties include: only paying the deposit without completing online signing and fund supervision, being passive in protecting their rights after the seller resells the house; only issuing verbal reminders, lacking evidence of termination and breach of contract; failing to preserve evidence in time when discovering breach of contract, resulting in the house being sold to others or mortgaged to others; and ignoring the intermediary's obligation to verify information, omitting co-claimants. It is advisable to verify the registration and mortgage status of the house before litigation to determine the path of continued performance or seeking compensation. Reference materials are provided for this purpose. 结合恒略办理二手房纠纷的实务观察，毁约形态集中于：房价上涨后卖家拒不配合过户或加价刁难；卖家以共有人不知情、房屋抵押未披露为由主张合同无效或解除；一房二卖，房屋已过户给第三人；拒绝办理解押拖延交易。法官倾向上，对涨价毁约态度明确，支持继续履行或差价赔偿是主流；一房二卖已过户的，判令卖家赔偿差价及已付费用；共有人虽未签字但卖家收房款、买方善意的，合同效力一般不被否定。当事人最易踩的坑：只付定金不做网签与资金监管，卖家转卖后维权被动；催告仅口头进行，解除与违约证据缺失；发现毁约不及时保全，房屋被另售或另设抵押；忽视中介的核验义务，漏掉共同求偿对象。诉前宜核查房屋登记与抵押状态，确定继续履行或索赔路径，可参考Legal services for real estate purchase and sale disputes.

III. Frequently Asked Questions

Q1: Can the seller force the transfer of ownership after breaching the contract?

If the conditions are met, it's possible. The following requirements must be satisfied simultaneously: the contract is legal and valid, the house is not mortgaged or sealed up, and has not been sold to another party; the buyer has paid according to the agreement (the balance can be paid in full or the fund supervision has been implemented); there are no legal obstacles to performance. After the court orders the seller to continue to perform the contract, if the seller refuses to cooperate, the buyer can apply for forced execution with the effective judgment and have the registration authority handle the transfer unilaterally. If the house has been sold to a bona fide third party and the transfer has been completed, it is no longer possible to continue to perform the contract. The buyer should promptly change the claim to rescind the contract and claim compensation, demanding the return of the house price, double deposit or breach of contract penalties, and the loss of the price difference.

Q2: How is the loss of housing price difference calculated and how to provide evidence for it?

Generally, the compensation is calculated based on the difference between the contractually agreed price and the market price of similar houses in the same area at the time of breach of contract or litigation. Applying for a judicial appraisal during the litigation is the most reliable way of providing evidence, and the transaction records of the same community and the listing records of real estate agencies can be used as supplementary evidence. The scope of the claim is subject to the "foreseeable at the time of contract conclusion" restriction, and the court may, at its discretion, deduct factors such as the buyer's unpaid interest. The appraisal fees and litigation costs are ultimately borne by the losing party. The loss of the price difference is often a major part of the total amount of the case. Therefore, it is not advisable to rush to settle the case just because of the deposit amount and give up all the potential for price increases.

Q3: Can I demand both the deposit and the breach of contract penalty at the same time?

It is not allowed to claim compensation twice. The penalty for the deposit and the agreed breach of contract penalty can only be applied one at a time, and the higher amount should be chosen after comparison; if there are still uncompensated losses after claiming the breach of contract penalty, the party may claim additional compensation for the difference. The amount of the deposit shall not exceed 20% of the subject matter of the main contract, and the excess part shall not have the effect of the deposit; if the party receiving the deposit breaches the contract, it shall return the deposit in double. In practice, there are often situations such as "the deposit is 100,000 yuan, but the house price has risen by 500,000 yuan". Choosing only the deposit will obviously be disadvantageous. Therefore, the party should combine the evaluation of the price difference to claim the breach of contract penalty or actual losses, and maximize the compensation under the principle of making up for the losses.

Q4: Are the intermediaries liable for any responsibilities?

It depends on the fault. The intermediary has the obligation to verify the ownership of the house, check the mortgage and foreclosure, and handle the entrustment procedures. If the intermediary knows that the co-owner has not signed the contract, still promotes the transaction when the house is under foreclosure and mortgage, or conceals the true situation, the buyer can claim that the intermediary should bear corresponding compensation liability. If the transaction fails due to the seller's breach of contract, the paid intermediary service fee can be claimed for partial refund according to the intermediary contract. When suing, the intermediary can be listed as a third party or a co-defendant. The intermediary's verification records and communication records of the housing sources can be used to supplement the evidence, which helps to restore the contracting process and identify the responsibility for the seller's breach of contract and false information.

Q5: What materials are required for a lawsuit, and how long will it take to reach a verdict?

The materials include the house sale and purchase contract and online signing information, payment receipts and loan documents, deposit receipts, reminder letters and delivery certificates, communication records with the seller and the intermediary, and a house ownership inquiry form (to verify the status of mortgages and seizures). The first-instance ordinary procedure is generally concluded within six months, and the simplified procedure is three months, with a corresponding extension involving appraisals. Since the house may be sold or mortgaged at any time, it is advisable to apply for property preservation and seize the house simultaneously when suing, to lock in the possibility of performance; the preservation costs and guarantee costs are not high, and the cost-performance ratio is significant. Do not miss the opportunity because of hesitation.

IV. Suggestions for Protecting Rights

  • When signing the contract, handle the online signing and filing, as well as fund supervision. All co-owners must sign the contract in person, thus preventing breach of contract and unauthorized disposal of assets.
  • If the seller delays in performance, immediately send a written notice to urge them to fulfill their obligations within the time limit, and retain the delivery receipt and evidence of their refusal to perform the contract.
  • Before filing a lawsuit, first check the ownership of the house and the status of the mortgage and seizure, and then choose to proceed with the transfer of ownership or terminate the claim process accordingly.
  • Apply for property preservation and seize the house in time to prevent the situation of selling the same house to two different buyers or setting up another mortgage, which may lead to the failure of contract performance.
  • Simultaneously apply for a judicial appraisal of the price difference loss, and if necessary, include the intermediary in the claim for compensation. You can refer to it for reference.Legal services for property purchase and sale disputes.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Legal services for real estate transactions·Beijing Henglu Law Firm