[Direct answer]When discovering forged materials such as property certificates, power of attorney documents, divorce certificates, or co-owners' signatures, there are three steps to take: First, report the case to the police. Forging national government documents and defrauding housing payments may constitute criminal offenses, and the police report receipt is also important evidence; Second, fix the evidence and preserve the original materials, transfer records, and communication records. Apply for handwriting or document authenticity appraisal in a timely manner; Third, seek civil remedies. Contracts signed under fraudulent circumstances can be revoked within one year from the date of knowing the grounds for revocation, and the party can demand the return of the housing payment and compensation for losses. If the property has been transferred to a bona fide third party, the party can instead seek compensation from the forger. For more details, please refer to the following link:Legal services for real estate sales and purchase disputesOrBeijing Henglu Law Firm.

I. Legal basis and interpretation of provisions

1. Article 148 of the Civil Code of the People's Republic of China (effective January 1, 2021)

Where a party uses fraudulent means to make the other party perform a civil legal act against their true will, the party who has been deceived has the right to request its revocation. The constitutive elements include fraudulent intent, fabrication of facts or concealment of the truth, and the other party's erroneous understanding and expression of intent as a result—forged house deeds, fake power of attorney documents, and fabricated spousal consent to sell declarations are all typical forms of fraud. After the contract is revoked, it is legally binding from the beginning. According to Article 157 of the Contract Law, the other party shall return the purchase price and compensate for losses. It is particularly important to note that the right of revocation is subject to a time limit: if it is not exercised within one year from the date when the party knows or should have known of the grounds for revocation, it will be extinguished. Therefore, after discovering the fraud, it is crucial not to miss the opportunity to exercise the right of revocation during repeated negotiations.

2. Article 280 of the Criminal Law of the People's Republic of China (amended on December 26, 2020)

Anyone who forges, alters, buys or sells official documents, certificates, or seals of state organs shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention, control, or deprivation of political rights; if the circumstances are serious, they shall be sentenced to fixed-term imprisonment of not less than three years but not more than ten years. Forging real estate ownership certificates, court documents, divorce certificates issued by civil affairs departments, etc. may all constitute this crime; forging power of attorney documents and forging the signatures of co-owners to fraudulently obtain transaction opportunities, and then illegally possessing a large amount of purchase money, may also constitute the crime of fraud as stipulated in Article 266 of the Criminal Law. The advantage of the criminal path is that the investigation methods are strong and the recovery of stolen property and compensation are guaranteed; when reporting the case, the transaction materials, capital flow records, and evidence clues should be submitted to cooperate with the public security organ in fixing evidence.

3. The interpretation of the case by the practical judge

The key points for the court and registration authorities to grasp are as follows: Firstly, if the signature is identified as not being signed by the actual person, the expression of intent will not be effective against the person whose name was used, and the contract cannot bind the co-owners whose names were used. The case will then shift to the determination of unauthorized disposition and bona fide acquisition. Secondly, if the buyer is bona fide (unaware of the fraud, paying a reasonable price, and the property has been transferred), it will be difficult to recover the house, and the injured party will turn to the party who committed the fraud for compensation. If the buyer knows about the fraud or the price is obviously abnormal, they will not be protected by the bona fide acquisition. Thirdly, with an effective judgment, the buyer can apply to the registration authority to correct the registration or revoke the transfer registration that has been completed. Fourthly, in cases involving criminal and civil cross-over, if the criminal facts are the same as the basic facts of the civil case, the case may be prosecuted first and then civilized, or transferred for investigation. However, claims for compensation for losses can usually be realized through criminal restitution or separate civil procedures. Lawyers should coordinate the pace of the two processes.

II. Practical experience of Henglue Law Firm

Based on Henglue's practical observations in handling second-hand housing disputes, the most common forms of forged materials include: forging co-owner signatures or forging power of attorney documents to sell the house without authorization; forging or swapping real estate ownership certificates to impersonate the owner; forging divorce certificates, divorce agreements, or court documents to fabricate the "single and eligible for sale" status; and impersonating others during the contract signing process, with mismatched signatures and identity documents. In the eyes of judges, appraisal conclusions are almost final — claims are more likely to be supported if the handwriting and document authenticity appraisal is applied for early and the original materials are well preserved; those who only verbally deny the authenticity of the contract but do not apply for appraisal will find it difficult to overturn the contract's validity. The most common pitfalls for parties involved: continuing to make payments and transfer ownership even after discovering suspicious materials; filing a revocation request after the one-year statute of limitations has passed; privately negotiating with the forgers to delay the process, thereby missing the opportunity to report the case to the police and secure evidence; and neglecting to obtain evidence of the intermediary's verification process. When encountering such disputes, it is recommended to report the case to the police immediately, hire a lawyer, and simultaneously proceed with appraisal, preservation of evidence, and civil litigation. For reference:Legal services for property sale and purchase disputes.

III. Frequently Asked Questions

Q1: If someone forges a signature to sell a house, is the contract still valid?

The party whose signature was forged never expressed the intention to sell, and the contract is not legally binding on them. If the seller committed fraud or acted without proper authorization, the buyer can claim to rescind the contract, demand the return of the purchase price, and seek compensation for losses. However, if the buyer was unaware of the forgery, had paid a reasonable consideration, and completed the transfer of ownership, it may constitute bona fide acquisition, making it difficult to recover the property. The key to determining liability lies in the conclusion of the handwriting analysis and whether the buyer acted in good faith. Therefore, if the signature appears suspicious, it is necessary to apply for an expert appraisal immediately in the litigation process and simultaneously verify whether there were any abnormalities in the transaction (such as an obviously low price, skipping the property inspection, hastily completing the transfer, or making large cash payments).

Q2: The money has been paid and the house has been transferred, can I still recover it?

Depending on the circumstances: If the buyer acted in good faith and the property has been transferred to his/her name, it constitutes bona fide acquisition, and the house is difficult to recover. The buyer should promptly sue the fraudster to return the purchase price and compensate for losses such as the price difference, taxes, and interest, while pushing for criminal recovery of the fraudulent proceeds and restitution. If the buyer knew or should have known about the fraud (such as an obviously low price or obvious flaws in the materials), it does not constitute bona fide acquisition. The buyer can request to confirm the invalidity or rescission of the contract, and apply for the rescission of the transfer registration and recovery of the house based on the effective judgment. In either case, the buyer should apply for the preservation of the fraudster's property as soon as possible to prevent him/her from transferring or squandering the purchase price, resulting in winning the lawsuit but not being able to recover the money.

Q3: Can I report the case to the police and file a lawsuit at the same time?

Yes. If forging national government documents or using false materials to fraudulently obtain housing payments constitutes a criminal offense, reporting the case does not preclude civil litigation; if the court finds that the facts of the criminal offense are substantially the same as those of the civil case, it may order the suspension of civil litigation and prioritize criminal prosecution to recover the stolen money and compensate for the losses; if it does not constitute a crime, the civil proceedings will proceed as usual. In practice, the handling of "concurrent criminal and civil litigation" or "criminal prosecution before civil litigation" directly affects the pace of recovering the money. It is recommended to prepare a civil litigation plan at the same time when reporting the case, and let a lawyer evaluate the complementarity of evidence and the procedural order of the two lines of investigation to avoid neglecting one aspect while emphasizing another.

Q4: How to apply for handwriting authentication, and who will bear the cost?

For the party who has doubts about the authenticity of the signature, thumbprint, or the time when the document was formed, he/she may, within the time limit for providing evidence, apply to the court in writing for an appraisal and submit the comparison samples (such as the original signatures in industrial and commercial archives, bank reserved signatures, notarized documents, etc.). The parties shall consult or select the appraisal institution by drawing lots. The appraisal fees shall be prepaid to the institution, and the losing party or the party who bears the liability shall generally bear the fees. The appraisal opinion is the core evidence in such cases. The authenticity and quantity of the samples directly determine the quality of the conclusion. Do not let the comparison materials be lost before the lawsuit, and if necessary, apply to the court to retrieve the archival samples to ensure that the appraisal is completed once and for all.

Q5: Is there a time limit for requesting the revocation of the claim?

There are restrictions. The right of revocation due to fraud should be exercised within one year from the date when the revocation grounds are known or should have been known, and the right will be extinguished if exercised beyond the time limit; for major misunderstandings, the time limit is 90 days; and for coercion, the right of revocation shall be exercised within one year from the date when the coercive act ceases. For claims for the return of the housing payment and compensation for losses, a three-year statute of limitations applies. In disputes over fraudulent materials, parties often miss the one-year exclusionary period due to repeated private negotiations, at which point the contract becomes difficult to revoke, and they can only claim damages for general breach of contract or infringement, with their options significantly limited. If signs of fraud are detected, parties should immediately evaluate the situation, sue as soon as possible, and take preservative measures simultaneously.

IV. Suggestions for Protecting Rights

  • Before signing the contract, verify the identity and property rights in person: check the ID card and the original house ownership certificate, and retrieve the registration book to verify the ownership, mortgage, and seizure status.
  • For jointly-owned properties, all co-owners are required to be present to sign the power of attorney for the verification of the authenticity of the power of attorney for the sale of the property and the scope of authorization.
  • If you find the materials suspicious, report it to the police immediately, stop making payments, keep the original documents, and consult a lawyer to evaluate the situation, identify the problem, and determine the best course of action for cancellation.
  • During the one-year exclusion period, we will file a lawsuit to revoke the contract and simultaneously apply for property preservation and document appraisal, taking a two-pronged approach.
  • Keep the communication with the intermediary and the verification materials. If necessary, include the intermediary in the joint claim for compensation, which can be referred to for referenceLegal services for real estate 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, so as to avoid missing the statutory time limit. →Legal services for real estate transactions·Beijing Henglu Law Firm