[Direct answer]Yes. If the seller breaches the contract by refusing to sell the house after receiving the deposit, and the purpose of the contract cannot be achieved, the seller shall double refund the deposit in accordance with Article 587 of the Civil Code of the People's Republic of China (effective January 1, 2021). This is a statutory penalty for the deposit. Note three points: The amount of the deposit shall not exceed 20% of the house price (Article 586), and the excess part shall not have the effect of the deposit; the receipt and the contract shall clearly indicate the words "deposit"; "deposit" and "intention deposit" are generally not subject to the penalty; the buyer may also choose not to demand double refund, but require the seller to continue to perform the contract or claim compensation for actual losses. It is recommended to first fix the chat records, audio recordings, letters, and other evidence of the seller's explicit refusal to sell, and then negotiate or sue, while simultaneously claiming the refund of the paid house price. For case assessment, please consult a lawyer.Property sales and purchases | Legal services for construction projectsOrBeijing Henglue Law Firm.

I. Legal basis and interpretation of provisions

1. Article 587 of the Civil Code of the People's Republic of China (effective January 1, 2021)

When the debtor performs the debt, the deposit shall be set off against the price or recovered; if the party paying the deposit fails to perform the debt and thereby fails to achieve the purpose of the contract, it shall not have the right to request the return of the deposit; if the party receiving the deposit fails to perform the debt and thereby fails to achieve the purpose of the contract, it shall return the deposit in double. If the seller regrets not selling after receiving the deposit, it constitutes a breach of contract by the party receiving the deposit, and the buyer's claim for double return is legally justified. There are three constitutive elements: the deposit has been actually paid, the contract stipulates clearly, and the breaching party fails to perform the contract and thereby fails to achieve the purpose of the contract, all of which are indispensable.

2. Article 586 of the Civil Code of the People's Republic of China (effective as of January 1, 2021)

The deposit contract is established upon the actual delivery of the deposit; the amount of the deposit shall be agreed upon by the parties, but shall not exceed 20% of the subject matter of the main contract. The excess part shall not produce the effect of the deposit. Taking a house price of 5 million yuan as an example, the maximum deposit is 1 million yuan. If it is agreed to be 1.5 million yuan, only 1 million yuan shall be subject to the double refund penalty. The excess 500,000 yuan shall be treated as a prepayment. In the event of a breach of contract, the buyer can only claim a refund and cannot be fined or subject to a double penalty. When the buyer makes the payment, he/she should also write "deposit for purchasing a house" in the transfer remarks to avoid disputes over the nature of the payment.

3. Practical adjudication guidelines (the applicable scope of the penalty for the deposit)

The court adheres to three boundaries: First, regarding the name and nature of the payment. If the receipt states "deposit" or "intentional deposit" without a deposit agreement, the penalty provisions generally do not apply, and the payment will be refunded as a prepayment. Second, regarding the different stages of contract signing. For those who have only signed a purchase agreement but have not yet concluded a formal sales contract, the case shall be handled in accordance with Article 4 of 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" (effective January 1, 2021). If the contract cannot be concluded due to reasons beyond the control of both parties (such as adjustments to credit policies or failure to reach an agreement on the main contract terms), the seller only needs to refund the deposit, without doubling it. Third, regarding the choice of remedies. It is generally not possible to claim both the doubling of the deposit and the performance of the contract simultaneously. If the house has been sold to a third party, the buyer may also provide evidence to claim compensation for the loss of the price difference. The most common pitfall is that there is only an oral agreement and no annotations on the transfer, making it impossible to determine the nature of the "deposit".

II. Practical Experience of Henglue Law Firm

Based on Henglue's practical observations in handling deposit disputes in housing transactions, such cases typically involve three types of disputes: First, after signing the contract, the house price rises, and the seller delays the online signing for various reasons, ultimately repudiating the contract. This often occurs in second-hand housing transactions with a longer payment cycle; Second, the parties only sign a purchase agreement, but fail to reach an agreement on the payment method, tax burden, and other main contract terms. The seller claims that the "contract has not been established" and refuses to refund or compensate. At this point, the focus shifts to whether the failure to sign the contract can be attributed to one party; Third, the deposit receipt's name and transfer notes are not standardized. The seller uses defenses such as "deposit" and "good faith deposit" to attempt to circumvent the double refund obligation. Generally, the court's position is that if the deposit is actually paid and the intention to perform the contract is genuine, the party in breach of the contract shall bear legal responsibility; if the contract fails to be concluded due to policy adjustments or other non-faulty reasons on both sides, only the principal amount shall be refunded.

There are three pitfalls that parties are most likely to fall into: First, if the receipt and transfer notes do not mention "deposit", it will be difficult to provide evidence afterwards; Second, if the agreed deposit exceeds 20%, the excess part will be paid in vain and cannot claim penalties; Third, if the seller expresses regret immediately and fiercely resists, it will scare off the buyer and miss the opportunity to fix the evidence of "clearly refusing to sell the house". The standard evidence-gathering actions are: keeping the original contract and receipt, bank transfer vouchers, sending a written reminder through WeChat and requiring the seller to express his position clearly, recording the seller's oral refusal on the spot, and sending a letter to urge the seller to perform within a specified period of time, so as to prepare a chain of evidence for claiming deposit penalties or compensation for the price difference in the future.

III. Frequently Asked Questions

Q1: What are the conditions for getting a double refund of the deposit?

There are four conditions: the deposit has been actually paid and the transfer receipt can be verified; the contract or receipt clearly states "deposit"; the seller fails to fulfill his obligations, such as explicitly refusing to sell, delaying the transfer of ownership, or selling the same house to two different buyers; and the breach of contract results in the inability to achieve the purpose of the contract. If the seller is merely in delay but the contract can still be performed, the court may not support the return of double the deposit but order the performance of the contract. Therefore, it is necessary to first determine the degree of breach of contract before determining the claims.

Q2: What should I do with the part of the deposit that exceeds 20% of the house price?

The excess amount does not generate the effect of the deposit, but the amount paid as a down payment should still be refunded. For example, if the house price is 4 million yuan and the deposit paid is 1.2 million yuan, among which 800,000 yuan is subject to double refund (the seller will pay back 1.6 million yuan), and the excess 400,000 yuan will be refunded as a down payment, totaling about 2 million yuan. If the agreement divides the amount into a deposit and a down payment and specifies them separately, each shall be handled according to its nature. When claiming, it is necessary to list them separately to avoid causing disputes over the total amount if it is simply written as "deposit".

Q3: Can I only demand a double refund, or can I also request that the other party continue to fulfill their obligations?

Generally, only one option can be chosen. If the contract still meets the conditions for performance and the buyer wants to take possession of the house, he/she can sue to require continued performance and cooperation with the transfer of ownership, and the breach of contract penalty or losses will be calculated separately; if the buyer no longer wants to buy the house, he/she can claim double refund of the deposit and return the paid purchase price. If the house has been sold to a third party and cannot be performed, the claim for continued performance will usually not be supported. Instead, the buyer can claim the penalty for the deposit and the loss of the price difference. The costs and timeframes of the two solutions vary greatly. It is recommended to evaluate the situation first before filing a lawsuit.

Q4: What should I do if the seller refuses to refund the money?

After winning the lawsuit, if the other party still fails to perform its obligations, you can apply to the court for compulsory enforcement within the two-year statute of limitations, and investigate and control the real estate and deposits under their name, and take measures such as restricting consumption. During the litigation stage, you can also apply for property preservation to freeze the seller's account or the houses involved in the case in advance to prevent them from transferring assets. For the relevant enforcement path, please refer to the following for details.Creditor-debtor relations | Legal services for enforcement casesThe request for preservation of evidence should be submitted simultaneously with the lawsuit.

Q5: What evidence do I need to prepare if I want to claim a double refund of the deposit?

Five types of evidence: the original copy of the purchase contract or subscription agreement; the deposit receipt; the bank transfer certificate (it is best to write "deposit" in the remarks section); evidence of the seller's breach of contract, such as WeChat records, audio recordings, or written letters explicitly refusing to sell; and evidence of the buyer's performance of the contract, such as raising funds on schedule and records of urging the seller to fulfill his obligations. The more complete the evidence is, the more solid the claims for double refunds and compensation for losses will be. It is recommended to organize the evidence into a booklet according to the timeline before suing.

IV. Advice on Protecting Rights and Interests

  • As soon as the seller showed signs of regret, the buyer immediately sent a written reminder via WeChat and demanded a clear statement from the seller. At the same time, the buyer recorded the seller's verbal refusal on the spot to preserve the evidence.
  • Check whether the receipt and the transfer note specify "deposit", and whether the amount exceeds 20% of the house price. Calculate in advance the amount of refund and compensation that you can claim.
  • For those who want to continue buying a house, they should first check whether the house has been sold to others or mortgaged. They should apply for seizure and preservation in time to avoid losing both money and the house.
  • For those who have only signed a subscription agreement but not a formal sales contract, it is important to distinguish the different consequences of "failure to sign a contract" and "breach of contract", and not to blindly claim double compensation.
  • If the negotiation fails, initiate legal proceedings as soon as possible and apply for property preservation. You can refer to the litigation plan for similar disputes for referenceReal estate transactions | Legal services for construction projectsOrBeijing Henglue Law Firm.

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