[Direct answer]If the developer delays the delivery of the house, the buyer may, in accordance with the contract, claim the breach of contract penalty for the delay in delivery (commonly calculated at one-tenth to five-tenths of the total paid purchase price per day until the actual delivery date). If the delay meets the agreed conditions for termination or constitutes a fundamental breach of contract, the buyer may also terminate the contract, return the paid purchase price, and claim damages. It is necessary to carefully check the grace period clauses in the supplementary agreement, be vigilant against the developer's defense of "force majeure" such as the pandemic, and promptly send a written reminder and file a lawsuit for compensation within the statute of limitations.

I. Problem Background and Typical Scenarios

Delayed delivery of housing is one of the most common types of disputes in the field of commercial housing sales. Common scenarios include: the delivery date specified in the contract has passed, but the developer keeps delaying it with excuses such as "the impact of the pandemic", "government meetings", and "bad weather"; the project has been stalled for a long time or even left unfinished, with no clear delivery date in sight; when delivering the house, the buyer is required to "accept the house first and then deal with it" because the house has not met delivery conditions such as obtaining the completion and acceptance filing. Buyers often have already paid a large amount of money for the house and are still making monthly mortgage payments, but they cannot receive the house. They face both financial pressure and anxiety about protecting their rights. Whether they can claim breach of contract penalties, whether they can withdraw from the contract, and how to determine the grace period and force majeure are the three core issues of such disputes. If no agreement can be reached, the disputes should be resolved through litigation in a timely manner. For complex contract disputes, reference can also be made to relevant legal provisions and precedents.Contract dispute legal services.

II. Key points of contention

  • The standard of the breach of contract penalty and the starting time: It shall be subject to the provisions of the contract and the supplementary agreement. Note the application of the grace period clause — if the house has not been delivered after the expiration of the grace period, the buyer shall pay the breach of contract penalty, and the grace period cannot be arbitrarily added to other reasons for delay claimed by the developer.
  • Can the defense of force majeure be established? If the epidemic situation and other factors were already in a normal or foreseeable state when the contract was signed, the developer should have been able to foresee and reasonably arrange the construction schedule, and it generally does not constitute force majeure. The developer must also provide evidence of the causal relationship between the number of days of suspension of work and the delay in the delivery of the house.
  • Can the contract be terminated and the house be vacated? If the agreed conditions for terminating the contract are met, or if there is a serious delay in the project or a long-term suspension of construction that results in the contract's objectives being unattainable, the buyer may terminate the contract and demand the return of the paid housing price, interest, and compensation for losses.

III. Professional analysis by Henglue Lawyers

A case handled by Henglue Law Firm is quite instructive: On April 30, 2021, Zhang Quan (a pseudonym) signed a "Beijing Commercial Housing Pre-sale Contract" with Beijing A Real Estate Development Co., Ltd. to purchase a house in a certain residential community, with a total price of 6,841,972 yuan. The contract stipulated that the house should be delivered by June 15, 2023. On the same day, a supplementary agreement was signed, which stipulated a 90-day grace period. After the grace period expired, the buyer would pay a daily penalty of 0.01% of the total payment amount. However, A Company failed to deliver the house until March 5, 2024, nearly nine months after the deadline. The developer claimed force majeure exemption due to the pandemic, government meetings, and bad weather, and argued that the grace period could be cumulated with other delays. Attorney Tian Jiaoyan pointed out that the contract was signed in 2021, when the pandemic had already become a normal situation. A Company should have foreseen and reserved the construction period, so it did not constitute force majeure. Bad weather, government meetings, and exams did not necessarily lead to a complete suspension of work. The grace period should be strictly applied according to the contract, and there was no contractual or legal basis for cumulating the grace period. The court adopted the lawyer's opinion and ruled that A Company should pay a penalty of 118,366.12 yuan for the delay in delivery from September 14, 2023 to March 5, 2024 and bear the litigation costs. The buyer received full support in the case.

IV. Practical suggestions and legal basis

Legal basis: Article 577 of the Civil Code of the People's Republic of China (effective January 1, 2021) stipulates that a party who fails to perform contractual obligations shall bear breach of contract liabilities such as continued performance and compensation for losses; Article 585 stipulates that the party may claim breach of contract penalties as agreed, and if the agreed amount is lower or excessively higher than the actual losses, the party may request the court to adjust it; Article 563 stipulates that if the party fails to perform the contract within a reasonable period after being reminded, the party may rescind the contract. Article 30 of the Measures for the Administration of the Sale of Commercial Housing (effective June 1, 2001) also clearly stipulates that the developer shall deliver the commercial housing that meets the conditions for delivery to the buyer on schedule, and shall bear breach of contract liabilities if it fails to deliver on schedule. Practical approach: First, send a written notice of reminder and keep the delivery receipt; require the developer to present the completion and acceptance filing form to verify the delivery conditions; calculate the breach of contract penalties on a daily basis according to the agreed standards; if no agreement can be reached, file a lawsuit with the court where the property is located. For properties that have been stalled in construction for a long time, the buyer may claim to rescind the contract and return the down payment and interest according to the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Disputes over the Sale of Commercial Housing Contracts. For related cases, please refer to the corresponding materials.Legal services for real estate transactions and construction projects.

5. Henglu Law Firm's Reminder

The case is handled byTian JiayanThe lawyer (practice license number: 11101202111381309, subject to the document issued by the judicial administrative organ) acts as the agent. Reminder to the purchaser: Before taking possession of the house, first check the delivery conditions and grace period provisions stipulated in the contract. If there is a delay, send a letter of reminder immediately and do not substitute oral negotiations for written claims. When the developer uses "force majeure" as an excuse, require them to provide evidence such as a suspension of work certificate, and pay attention to the key node of the contract signing time. Both the penalty for breach of contract and the right of rescission have their own exercise opportunities. Delaying may lead to the loss of evidence and the risk of statute of limitations. The negotiation leverage comes from evidence and legal basis. The earlier the lawyer is engaged, the more conducive it is to lock in the penalty for breach of contract or strive for a refund of the purchase price. For more service information, please visitBeijing Henglue Law Firm.

Q1: How is the penalty for late delivery of housing calculated?

According to the agreement, the common penalty is one-tenth to five-tenths of the total payment per day, calculated from the day following the agreed delivery date or the day after the expiration of the grace period to the actual delivery date. Taking a total price of 6.84 million yuan and a daily penalty of one-tenth of the total price as an example, the penalty for a delay of 270 days would be about 185,000 yuan. If there is no agreement in the contract or the agreed penalty is significantly lower than the actual losses, the party may request the court to adjust it according to the rental standards of similar houses in the same area. When calculating the penalty, attention should be paid to deducting the number of days of the grace period specified in the contract, and keeping payment invoices, move-in notices, and reminder letters as evidence of the start and end dates. After calculating it day by day, a detailed table should be submitted with the lawsuit.

Q2: Can the COVID-19 pandemic be considered a reason for exemption from liability for delaying the delivery of housing?

Not necessarily. Force majeure must meet the requirements of unforeseeability, unavoidability, and insurmountability. If the contract was signed before the outbreak of the pandemic, or when the pandemic had already entered a normalization phase, the developer should have been able to foresee the impact of the pandemic and reasonably arrange the construction schedule. Generally, the court will not support the developer's exemption from liability on this basis. Even if it is true that the project was suspended during certain periods of the pandemic, the developer still needs to provide evidence of the actual number of days of suspension caused by the pandemic and the causal relationship between it and the delay in delivery. General statements cannot exempt the developer from all liability. Buyers can require the developer to present evidence such as government suspension notices and construction logs, and then decide whether to accept the developer's claim for an extension. In the Henglue case mentioned above, the developer won the full support of the breach of contract penalty based on this line of reasoning.

Q3: How long after the delay in handing over the house can I request a refund for the deposit?

There are two paths: 1. If the contract explicitly stipulates that the buyer has the right to rescind the contract if the delay exceeds a certain number of days, the buyer can send a written notice of rescission once the conditions are met. 2. If there is no such stipulation in the contract, if the developer fails to deliver the property within a reasonable period of three months after being reminded, or if the project is permanently stalled or left unfinished, rendering the contractual purpose unfeasible, the buyer may rescind the contract in accordance with Article 563 of the Civil Code. After rescinding the contract, the buyer may demand the return of the paid purchase price, payment of interest, and compensation for losses; if a mortgage loan has been arranged, the buyer may claim that both the purchase contract and the loan contract be rescinded, with the developer responsible for repaying the remaining loan and returning the principal and interest already paid. Before rescinding the contract, the buyer should assess the developer's repayment ability and, if necessary, apply for property preservation simultaneously.

Q4: What should I do if the developer asks me to accept the house first and then discuss the penalty for breach of contract?

Accepting the house and claiming compensation are two different matters. The breach of contract liability for late delivery of the house will not be extinguished by accepting the house. It is recommended to note in writing on the handover form at the time of accepting the house that "the right to claim the breach of contract penalty for late delivery of the house is reserved", to avoid being deemed as having implicitly waived the right; if the house has quality defects, the buyer may require the seller to make rectifications before accepting the house, or note the problems item by item on the handover form. Never believe the verbal promise of "accepting the house first and then getting compensation". Any compensation plan should be formalized in a written supplementary agreement, with clear amounts and payment time specified. If the buyer accepts the house first and then discusses compensation later, the bargaining leverage of the buyer will significantly decrease, and the cost of protecting rights will increase. For large amounts, it is recommended to consult a lawyer before accepting the house.

Q5: What evidence do I need to prepare for a lawsuit against the developer for delaying the handover of the house?

The core evidence includes: the commercial housing sales contract and supplementary agreement (the page where the delivery time, grace period, and penalty clause are located); payment receipts (down payment invoices, loan disbursement records, and deed tax receipts); the developer's notice of delay, the buyer's letter of reminder, and proof of mailing delivery; the completion and acceptance filing form or evidence of the developer's refusal to provide delivery conditions; and proof of losses (rental contracts in the same area and rental payment records). Before filing a lawsuit, it is advisable to send a written reminder first, which not only helps to preserve evidence but also may facilitate a settlement. After appointing a lawyer, the lawyer can calculate the optimal claim amount, determine the penalty clause or the strategy of terminating the contract and returning the house, and increase the likelihood of resolving the dispute in one go.

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