[Direct answer]Whether the lessee can vacate the property depends on the timing of the lease agreement and the seizure or mortgage. If the lease agreement is signed after the seizure or mortgage, according to the reverse interpretation of Article 405 of the Civil Code (effective January 1, 2021), the lease relationship cannot prevail over the registered mortgage rights and prior seizures. The buyer may apply to the enforcement court to remove the lease and conduct a forced eviction after the auction; If a legally valid written lease contract was signed and the lessee actually occupied and used the property before the seizure, according to Article 31 of the "Regulations of the Supreme People's Court on Several Issues Concerning the Handling of Execution Objections and Review Cases by the People's Courts" (effective May 5, 2015), the lessee may request to prevent the transfer of possession during the lease term. In this case, Article 725 of the Civil Code applies, which states that "the sale does not terminate the lease". The buyer must continue to fulfill the lease agreement and collect the rent until the lease expires. Action guidance: Before bidding, obtain the time of the seizure ruling, the signing time of the lease agreement, and evidence of possession; If the property has been auctioned and is subject to the lease agreement, apply to the enforcement court as soon as possible to review the authenticity of the lease and claim eviction. For more information on the enforcement process, please refer to the relevant provisions.Creditor-debtor relations and enforcement case services.

I. Problem Background and Typical Scenarios

The "auction with lease" is a high-risk area in the foreclosure property market. Typical scenarios include: the debtor signs a long-term lease with relatives or friends for ten or twenty years to resist enforcement, and pays the rent in full or at a price significantly lower than the market price; the auction announcement states "auction with lease, the court is not responsible for eviction", but after the buyer wins the bid, it is difficult to determine the authenticity of the lease relationship; the actual lessee claims that the sale does not break the lease and refuses to move out; the house is mortgaged to the bank and then a lease is signed, and the lease "surfaces" when the mortgage right is realized; and the lease is genuine, but the buyer mistakenly believes that it can be terminated and recovered for self-occupation at any time. The most worrying issues for buyers include: whether the lease is genuine or not, whether it can be forcibly evicted, and whether it's worth buying at a loss.

II. Key points of contention

  • The dispute over the chronology of events: The signing time of the lease contract and the time of seizure and mortgage determine whether the lease contract can resist enforcement; backdated contracts and falsified time records are the core objects of review.
  • The dispute over possession: Even if a lease agreement is signed before the property is sealed off, it is difficult to prevent the transfer of possession if there is only a contract but no actual possession and use. Evidence of possession, such as renovations, utility payments, and property records, becomes crucial in such cases.
  • The dispute over the validity of the lease agreement: If the rent is obviously too low, the lease is for a single long-term period, or the lease involving a family relationship is suspected of malicious collusion to harm the interests of the enforcement creditor, the party may claim that the lease is invalid or should be removed; the validity of the actual lease is also subject to a maximum term of 20 years.

III. Professional analysis by Henglue Lawyers

Henglue Law Firm's experience in handling eviction cases of foreclosed properties is to "break through the lease contract with a timeline". The first step is to identify the reference time: retrieve the attachment order and the attachment registration time from the executing court, check the signing date of the lease contract, the filing status, and the rent payment vouchers. Most fake leases cannot withstand cross-checking on the timeline. The second step is to review the possession: verify on-site whether there are people actually living and using the property, retrieve the property fees, water, electricity and gas payment records, decoration contracts, and neighbor testimonies. For leases without possession traces before attachment, it is difficult to prevent the transfer according to Article 31 of the Regulations on Objections and Reconsideration of Enforcement. The third step is to claim removal or invalidation: for backdated and false leases, apply to the executing court to review and remove them before auction. For serious false litigation clues, they can be transferred for handling. For leases with obviously unreasonable rents and malicious collusion, claim the invalidation of the contract separately. The fourth step is to distinguish the eviction path: for leases that have been removed, apply to the court for a forced eviction notice after eviction; for genuine prior leases, evaluate the cost-benefit of "holding and collecting rent with the lease in place" and "terminating the lease due to breach of contract or expiration". For large-scale enforcement cases, coordinated efforts can be made with other parties.Creditor-debtor relations and enforcement case servicesThe team formulates a comprehensive plan. The most effective risk control during the bidding stage is still due diligence beforehand. The relevant due diligence points can be combined withReal estate sales and construction project servicesVerify each item one by one.

IV. Practical Suggestions and Legal Basis

At the legal basis level: Article 405 of the Civil Code (effective January 1, 2021) stipulates that if the mortgaged property has been leased and the possession of it has been transferred before the establishment of the mortgage right, the original lease relationship shall not be affected by the mortgage right; conversely, a lease established after the mortgage shall not be enforceable against the mortgage right; Article 725 stipulates that if the ownership of the leased property changes during the lease term, the effectiveness of the lease contract shall not be affected, which means that the principle of "the sale does not affect the lease" only applies to genuine and prior-possessed leases; Article 705 stipulates that the lease term shall not exceed 20 years, and the exceeding part shall be invalid. Article 31 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Handling of Execution Objections and Review Cases by People's Courts" (effective May 5, 2015) clearly stipulates that the lessee shall satisfy two conditions to prevent the transfer of possession, namely, the signing of a legal and effective written lease contract before the seizure and the actual possession and use of the leased property. In the execution process, the court may remove the leases established after the seizure or the leases that affect the realization of the prior-established security rights and auction the properties after removing the lessee by force through public announcement. At the practical advice level: Before bidding, obtain all information about the property rights, mortgages, seizures, and leases, and inspect the property in person; if the announcement states "not responsible for eviction", first estimate the eviction costs before bidding; if there are lease obstacles after winning the bid, immediately apply to the execution court in writing to review the lease and submit an eviction application; if it is necessary to evaluate the time line of the case, you can visit the court's official website to obtain relevant information.Beijing Henglu Law FirmObtain support.

5. Henglue Law Firm's Reminder

The key to winning or losing the lease dispute of a foreclosed property lies in the two words "time and possession", and both sets of evidence are in the hands of the court and the lessee. It's almost impossible to clarify the situation by negotiating with them in person. The best solution is to proceed with the enforcement process as soon as possible. Three reminders: First, don't be intimidated or misled by a lease with "20-year long-term rent and extremely low rent". The traces of backdating (contract paper, payment records, and missing registration) are often clearly verifiable. Second, the annotation in the bidding announcement that "there is a lease and no eviction" doesn't mean that the lease is necessarily valid. There's still room for removal. Before bidding, please consult a lawyer to assess the worst-case scenario. Third, the "private eviction" such as changing locks, cutting off water and electricity by the buyer is likely to trigger a counter-claim for infringement. It's not advisable to adopt such measures. If the actual lease has been sealed before the sale, then we should face up to the rule that the lease prevails over the sale. Instead, we should design a plan for rent income and termination arrangements. For special cases, we can seek professional advice.Special services and other case servicesMake an appointment for an assessment.

Q1: Are the leases in foreclosed properties genuine? Can I still request the tenants to vacate the property after I win the auction?

It should be handled in chronological order. If the lease agreement is signed after the house is sealed up or mortgaged, it cannot be used to oppose prior rights according to the counter-rule in Article 405 of the Civil Code. The tenant can apply to the execution court for review and remove the lease after forced eviction; if a legally valid written lease contract has been signed and the tenant actually occupies and uses the property before the seizure, according to Article 31 of the Regulations on Review of Execution Objections, the tenant can prevent the transfer of possession during the lease term, and the buyer must bear the consequences of the lease remaining in effect after the sale. Therefore, the first step is to fix the time evidence of the seizure, mortgage, and lease, rather than directly confronting the tenant. After clarifying the timeline, decide whether to follow the execution path of removing the lease or accept the leased state and make other arrangements.

Q2: How to determine whether the lease agreement on a foreclosed property is forged or backdated?

Cross-checks can be conducted from five aspects: 1. **Timing**: Check whether the lease agreement was signed around the sensitive period before or after the seizure, and whether there are obvious signs of backdated signing. 2. **Occupancy**: Verify whether the tenant paid utility bills and property fees before the seizure, and whether there are renovation or actual living traces. Lease agreements without occupancy records may have questionable validity. 3. **Rent**: Check whether the rent is significantly lower than the market price and whether it is paid in full for several months at once. Such arrangements are often used to resist enforcement. 4. **Parties**: Determine whether the lessor and lessee have a family or business relationship. 5. **Recordkeeping and bank transactions**: Check for missing lease registrations and inconsistent bank transactions corresponding to the claimed "high rent". If a fraudulent lease agreement is discovered, the court may initiate an ex officio review. In cases involving suspected fraudulent litigation, the party may request referral to other authorities for further investigation.

Q3: If I buy a foreclosed property with a lease, who should collect the rent?

It depends on whether the lease is ultimately maintained. If the lease is removed by the court and then auctioned, the rent shall belong to the buyer from the date of delivery; if the original lease is maintained, according to Article 725 of the Civil Code, the sale and purchase shall not affect the lease, and the lessee shall continue to use the house according to the original lease. The buyer, as the new lessor, shall continue to collect the rent under the lease and shall not have the right to require the lessee to move out in advance or increase the rent. In practice, attention should be paid to checking the remaining lease term, rent level and payment method: if the remaining lease term is long and the rent is significantly lower than the market rate, the buyer's actual use cost will increase significantly, which is also the reason why the lease must be included in the pricing consideration before bidding. If the lessee sublets or defaults on the rent during the lease term, the buyer may claim rights according to the terms of the lease.

Q4: What due diligence should be conducted before bidding to avoid falling into the trap of the lease agreement?

There are at least four steps to follow: First, check the rights encumbrance and retrieve the real estate registration information to confirm the time and priority of the mortgage and seizure; Second, check the lease information by verifying whether the lease exists, the signing time and rent level through auction announcements, on-site postings, and interviews with property owners and neighbors. For properties advertised as "with a lease", it is especially important to request the lease contract; Third, check the possession status by visiting the property in person to confirm whether it is vacant or occupied. Vacant properties are less likely to have leases "added in" at a later date; Fourth, read the terms of the announcement, focusing on whether the court is responsible for eviction, how the lease will be handled, and who will bear the tax and fees. After comprehensively estimating the holding costs in the worst-case scenario, bid accordingly. If necessary, hire a lawyer to issue a due diligence opinion, which is much more cost-effective than remedying the situation after the auction.

Q5: After placing the order, the other party refuses to move out. What procedures do I need to follow to apply for forced eviction?

Under the premise that the lease agreement has been determined to be unenforceable or has been removed: First, submit a written eviction application to the enforcement court, attaching the auction completion confirmation, the property ownership certificate, and the lease review materials. Second, the court issues an eviction notice to the debtor or occupant, ordering them to vacate the premises within a specified period. Third, if the occupant fails to vacate within the time limit, the court may enforce the eviction by listing the property and removing it to a designated location. The resulting costs shall be borne by the party who refuses to comply. The key to the entire process is to first legally remove the lease obstacles, then apply for forced eviction. Applying for eviction directly without going through the review process is often rejected. If the occupant raises an enforcement objection during the review stage, the objection shall be handled in accordance with the objection review procedures. During this period, it is advisable to have a lawyer follow up to avoid procedural delays and delay the move-in.

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