[Direct answer]There is a difference of just one character between "deposit" and "booking fee", and the legal consequences are completely different: the deposit is a guarantee of creditor's rights as stipulated in Article 586 of the Civil Code. If the payer breaches the contract, he has no right to demand its return; if the recipient breaches the contract, he must return twice the amount. The booking fee is just an advance payment without guarantee effect, and in principle, it should be refunded. Before making the payment, you must check the written terms and keep the amount within 20% of the total purchase price. For more details, please refer to the following link:Legal services for the purchase and sale of real estate.

I. Problem Background and Typical Scenarios

When purchasing new homes, signing contracts for second-hand homes, or reserving commercial properties, sellers often collect payments under the guise of "deposits of good faith", "down payments", or "intention deposits". However, after buyers make payments, disputes over refunds often arise due to factors such as unapproved loans, purchase restrictions, price fluctuations, or the seller selling the property to others. In practice, there are three common scenarios: First, after paying the deposit, the buyer's loan application is rejected, but the seller refuses to refund the money. Second, if the purchase agreement specifies "deposits", the buyer may claim double compensation when the seller breaches the contract. Third, if the receipts and contract terms differ, both parties may have conflicting interpretations. The key to resolving these disputes lies in determining the nature of the payments involved.

II. Key points of contention

  • The dispute over the nature of the payment: Whether the receipt and the subscription agreement specify "deposit" or "booking fee", and whether there is a clear agreement on the nature of the deposit, directly determines whether the penalty for breach of contract can be applied.
  • The attribution of responsibility for the failure to conclude the main contract: Whether the non-approval of the loan and the adjustment of policies are attributable to one party or not, and whether they affect whether the deposit should be refunded.
  • The debate over the effectiveness of the deposit: If the agreed deposit exceeds 20% of the subject matter of the main contract, the excess portion does not have the effect of a deposit, and the party concerned can request its return.

III. Professional analysis by Henglue Lawyers

The deposit has a two-way guarantee function: According to Article 587 of the Civil Code, if the party paying the deposit fails to perform the contract and the contractual purpose cannot be achieved, he shall not have the right to request its return; if the receiving party fails to perform the contract, he shall return it in double. However, the down payment lacks the attribute of guarantee and is of the nature of advance payment. In principle, it should be returned if the contract is not concluded or terminated. In judicial practice, claims for double return of funds whose nature of deposit is not clearly stipulated are generally not supported. In the field of commercial housing, 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 (amended in 2020) clearly stipulates that if the commercial housing sales contract fails to be concluded due to reasons not attributable to either party, the seller shall return the deposit to the buyer. When the court determines the nature of the funds, it will comprehensively judge based on written certificates, chat records, and the wording of the receipts. The evidence awareness of the buyer's payment process often determines the success or failure of subsequent rights protection. Relevant contract disputes can also be referred to for reference.Business and contract dispute services for enterprises.

IV. Practical suggestions and legal basis

According to Article 586 of the Civil Code of the People's Republic of China (effective January 1, 2021), the deposit contract is concluded upon the actual delivery of the deposit. The amount of the deposit shall not exceed 20% of the subject matter of the main contract, and the excess part shall not produce the effect of a deposit; Article 587 stipulates the penalty of returning the deposit in double. Practical suggestions: 1. Before making the payment, check the purchase agreement and receipt carefully. Make sure the word "deposit" is clearly written and specify the circumstances in which the deposit penalty applies, rather than using vague terms such as "deposit" or "intention deposit". 2. When making the payment, request a stamped receipt and keep the transfer records and communication records. Do not pay in cash without proof. 3. Self-check and confirm the loan qualification, purchase restrictions, and credit status before paying the deposit, and specify the handling method for the case of loan disapproval in the purchase agreement. 4. If the other party breaches the contract and refuses to sign the contract, send a letter in time to fix the evidence and claim double return or sue for continued performance. In case the seller delays the refund, you can refer to the relevant provisions for further action.Creditor's rights and debts, and enforcement of legal servicesPursue legal action according to the law.

5. Henglu Law Firm's Reminder

A single word can make a difference of tens of thousands or even hundreds of thousands of yuan. Before signing the contract, it's best to clarify the terms, amounts, and refund conditions item by item. This is the most cost-effective way to manage risks. Once a dispute arises after making the payment, immediately save the subscription agreement, receipts, and communication records. If necessary, bring the materials to consult a professional lawyer. For more legal issues related to purchasing property and construction projects, please refer to the relevant materials for further information.Beijing Henglu Law FirmOfficial website.

Q1: Under what circumstances can the deposit be fully refunded?

The deposit does not have a guarantee nature and is considered an advance payment. If the seller fails to conclude a formal contract for any reason, the buyer terminates the contract in accordance with the agreement, the parties agree not to proceed with the transaction, or the seller cannot prove that the buyer breached the contract, the deposit shall generally be refunded in full. Even if the subscription agreement states that "the deposit is non-refundable", if the standard clause excludes the other party's main rights and fails to fulfill the obligation of giving full notice and explanation, it may be deemed invalid. The buyer should keep the receipts, subscription agreements, and communication records, and first attempt to negotiate and urge the seller to fulfill the obligations. If the contract is terminated after it has been established, the buyer may request the restoration of the original state and the return of the paid amounts in accordance with Article 566 of the Civil Code. If no agreement can be reached, the buyer may file a lawsuit with the court. For small claims, the small claims litigation procedure can be used, which is cost-effective.

Q2: If the mortgage for buying a house is not approved, can the deposit be refunded?

Depending on the circumstances: If the subscription agreement or sales contract explicitly stipulates that the payment shall be made by loan, and the buyer has truthfully declared his qualifications and actively handled the procedures, but the loan is not approved due to policy adjustments or bank-related reasons beyond the buyer's control, resulting in the failure to conclude the contract, most courts will determine that this is a circumstance not attributable to either party and support the rescission of the subscription agreement and the return of the deposit; if the buyer knowingly has a poor credit record, conceals his purchase restriction status, or delays in submitting loan materials, this is attributable to the buyer, and the seller has the right to refuse to refund the deposit according to the deposit penalty clause. The key lies in providing evidence: the buyer should retain the credit report, bank transaction records, and communication records with the real estate agent to prove that he has fulfilled his obligations of declaration and cooperation. Writing "How to handle the situation of loan disapproval" into the subscription agreement before signing the contract is the most effective preventive measure.

Q3: If the developer breaches the contract and sells the property to someone else, can the buyer claim a double refund of the deposit?

Yes. According to Article 587 of the Civil Code, if the party receiving the deposit fails to perform the obligation and thus fails to achieve the purpose of the contract, it shall return the deposit to the other party in double the amount. If the developer sells the house that has been subscribed for to others and handles the online signing, refuses to sign the contract explicitly, or fails to deliver the agreed house, it constitutes a fundamental breach of contract. The buyer may choose to claim a double refund of the deposit, or may, if eligible, request the developer to continue to perform the contract and compensate for the losses, exercising one of the two options. Note that the double refund is based on the identification of the "deposit": if the receipt is written as "deposit" or "intention deposit", the buyer can only claim the return of the principal and the loss of funds occupation. For the evidence points and protection paths of such disputes, please refer to the further explanation.Legal services for real estate transactions and construction projects.

Q4: Is the portion of the deposit exceeding 20% of the total purchase price still valid according to the subscription agreement?

The excess amount shall not have the effect of a deposit. According to Article 586 Paragraph 2 of the Civil Code, the amount of the deposit shall be agreed upon by the parties, but it shall not exceed 20% of the subject matter of the main contract. The excess amount shall not have the effect of a deposit, and the buyer may request the return of the excess amount paid. For example, if the house price is 3 million yuan and the agreed deposit is 900,000 yuan, only 600,000 yuan shall be subject to the penalty for breach of contract, and the remaining 300,000 yuan shall be treated as a prepayment and shall be returned. In addition, if individual developers collect high amounts under the guise of "e-commerce fees" or "group-buying fees", but in fact these fees have the nature of a deposit or a surcharge without corresponding services, the buyer may also claim the return of the fees. Buyers should check the subject of the payment and the issuance of invoices, and keep all payment receipts as the basis for future claims.

Q5: If I just paid the money and got a receipt, but didn't sign the subscription agreement, does the deposit relationship still exist?

The deposit contract is a practical contract. According to Article 586 of the Civil Code, it is established upon the actual delivery of the deposit. That is to say, even if the purchase agreement has not been signed yet, as long as both parties reach an agreement on the purchase of the house, the price, etc., and the payment has been actually made, and the receipt states "deposit", the deposit guarantee relationship can be deemed to have been established. Conversely, if the receipt does not state "deposit" or the parties have disputes over the nature of the payment, the buyer's claim to apply the deposit penalty will lack written support. The court will comprehensively determine the matter based on the chat records, sales promises, and the purpose of the payment. Therefore, when making the payment, it is necessary to require the issuance of a receipt indicating the words "deposit", the house number, and the amount, and to confirm the purchase arrangements at the same time; if there are only oral promises, the risks will be significantly higher.

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 Henglue Law Firm