[Direct answer]Retrieving the deposit is only the minimum remedy. If the seller breaches the contract, he/she shall return the deposit in double according to Article 587 of the Civil Code (effective January 1, 2021); according to Article 588, if the deposit is insufficient to compensate for the losses, the party may continue to claim for the excess part; or according to Article 585, he/she may claim the agreed penalty, or according to Article 584, he/she may demand compensation for the actual losses and the price difference of the house, which shall be calculated according to the difference between the market price of similar houses at the time of breach of contract and the contract price, limited to what could be foreseen at the time of conclusion of the contract. Among the deposit, the penalty, and the compensation for losses, the party may choose the most favorable path, but they cannot be overlapped repeatedly. The evidence of breach of contract and the evidence of the price difference determine the validity of the claim. For more details, please refer to...Legal services for real estate transactions and construction projectsAndBeijing Henglue Law Firm.

I. Problem background and typical scenarios

During the phase of rising housing prices, sellers tend to breach their contracts most frequently: after signing the contract, they notice that the listing price in the same community has surged, so they would rather forfeit the deposit to sell the house at a higher price elsewhere; or they delay online signing and property transfer, raise the price unilaterally, or even sell the same house to two different buyers. At this point, buyers have often already paid the deposit or even part of the down payment, and have also incurred costs such as agency fees and appraisal fees. Their most pressing concerns are: in addition to refunding the deposit and doubling the deposit, can they also claim the housing price difference? Are expenses such as decoration, taxes, and agency fees considered losses? What standard should be used to calculate the price difference? The answers to these questions directly determine the amount of compensation and also decide how buyers choose between "wanting the house" and "wanting the money". Buyers who claim their rights properly may receive total compensation far exceeding the deposit amount; while those who claim their rights improperly may only recover the doubled deposit.

II. Key points of dispute

  • The choice and combination of three remedies: the penalty of the deposit (double refund), the agreed penalty for breach of contract, and the compensation for actual losses (including the price difference) cannot be superimposed repeatedly. According to Article 588, the deposit and the penalty for breach of contract can only be chosen one of them, but if the deposit is not enough to compensate for the losses, the claimant can claim for the excess part. The choice of path directly affects the total amount of compensation received.
  • Proof of the loss of the price difference: The court supports the price difference on the premise that there is an objective reference. The appraisal report and the transaction records in the same period and the same area are the main evidence. The part of the claim that is too high and unsubstantiated will be reduced.
  • Continue to perform the contract or opt for compensation: If the house has not been transferred or resold, the buyer can request the seller to continue to perform the contract; if the house has been resold to a bona fide third party or mortgaged, the buyer can only seek monetary compensation. Moreover, the buyer needs to prevent the seller from transferring other assets. After the judgment, the buyer can take legal action against the seller according to the law.Legal services for creditor-debtor disputes and enforcement casesApply for enforcement.

III. Professional analysis by Henglue Lawyers

恒略律师在处理卖家毁约纠纷中形成两条基本经验。其一，索赔路径要按「收益最大化、举证最可行」来测算：先算双倍定金与差价孰高，差价明显高于定金的，起诉时应以差价赔偿为主张核心，同时把双倍定金作为备选或并入诉请结构；约定违约金接近差价水平的直接按约定主张，避免法官依第585条调减带来二次举证。其二，程序动作要快：毁约苗头出现时立即书面催告并要求对方明确是否履行，随后申请查封涉案房屋，防止一房二卖后履约不能；对已将房屋过户给第三人的，核查第三人是否明知毁约事实、是否恶意串通，构成恶意串通损害他人利益的，可依《民法典》第154条主张后手买卖无效，为继续履行打开空间。一房二卖中先行合法占有、先行支付价款等事实会影响履行顺位的认定，买家应尽早整理付款、占有、网签的时间线，把主动权抓在自己手里，必要时与Legal services for real estate transactions and construction projectsThe team held a meeting to formulate a litigation plan.

IV. Practical suggestions and legal basis

Legal basis: Article 586 of the Civil Code (effective January 1, 2021) stipulates that the amount of the deposit shall not exceed 20% of the subject matter of the main contract, and the excess portion shall not produce the effect of a deposit; Article 587 stipulates that if the party receiving the deposit fails to perform the contract and thereby causes the contractual purpose to be unattainable, it shall return the deposit in double; Article 588 establishes the rule that either the deposit or the liquidated damages shall be applied, and if the deposit is insufficient to compensate for the losses, the party may continue to claim compensation; Article 584 determines that the scope of compensation includes the foreseeable benefits; Article 566 stipulates that after the contract is rescinded, the party may request restoration of the status quo and compensation for losses. Practical suggestions: - Immediately fix the written evidence of the seller's refusal to perform and send a reminder letter after breaching the contract; - Simultaneously apply for property preservation and seize the house; - Prepare the evidence of the price difference according to three standards: appraisal, transaction records, and listing price; - Include the paid down payment, taxes, agency fees, and decoration investment, etc. in the list of losses with supporting documents; - When suing, clarify the priority between continuing to perform the contract and claiming compensation for losses, and pay attention to the three-year statute of limitations (Article 188 of the Civil Code) to avoid delaying the rights and causing losses.

5. Henglu Law Firm's Reminder

"Returning the deposit" and "compensating for the price difference" are two different matters. In most cases of breach of contract, the price difference is the main issue. The amount of compensation depends on three variables: how the contract terms are written, how the evidence of breach of contract is fixed, and how the price difference is proven, rather than relying on the seller's verbal promise of compensation. During periods when housing prices are rising, it is particularly important to file a lawsuit and apply for a seizure order as soon as possible. If the seller breaches the contract, sells the same property to two different buyers, or raises the price unilaterally, it is recommended to bring the contract and payment receipts as soon as possible and seek legal help through legal channels.Beijing Henglu Law FirmMake an appointment for an interview, calculate the optimal combination of the down payment, the breach of contract penalty, and the price difference, and include every claimable loss in the lawsuit.

Q1: There's only one character difference between "deposit" and "booking fee", so how much is the compensation difference between the two?

The difference is significant. The deposit has a guarantee nature. If the recipient breaches the contract, the penalty clause of the deposit stipulated in Article 587 of the Civil Code shall apply, and the deposit shall be refunded in double. However, the earnest money and intention deposit are usually regarded as advance payments, and the original amount shall be refunded in principle, without applying the double refund. At the same time, according to Article 586, the amount of the deposit shall not exceed 20% of the subject matter of the main contract. The excess part shall not produce the effect of the deposit and shall only be treated as advance payment. When signing the contract, it is necessary to confirm that the receipt and the contract state the words "deposit", and to verify whether the amount is within the limit of 20%. If it has been signed as "earnest money", the claim for compensation should be transferred to the breach of contract penalty or actual loss, and attention should be paid to collecting evidence of the other party's breach of contract.

Q2: In addition to the double deposit, can I also claim the housing price difference? How is it calculated?

Yes. According to Article 588 of the Civil Code, if the deposit is insufficient to compensate for the losses caused by the breach of contract, the party may request compensation for the losses exceeding the amount of the deposit; the difference in price losses fall under the category of "expectable benefits" as defined in Article 584, and the calculation basis is generally the difference between the market price of similar houses in the same area and the contract price at the time of breach of contract. The methods of proof include entrusting professional institutions to evaluate, providing transaction records and listing evidence of similar houses in the same district or the same area at the same time. The court will determine the difference in price based on the evidence that can be supported. Claims for unrealistically high amounts will not only fail to be supported, but will also increase the burden of litigation fees accordingly. The amount of the evaluation and claim should be reasonable and focus on the provable losses.

Q3: Can I get back the paid down payment, taxes, and agency fees all at once?

Yes. According to Article 566 of the Civil Code, after the contract is rescinded, the party that has performed the contract may request to restore the status quo ante, and the down payment already paid shall be refunded; the stamp duty, maintenance fund, agency fees, and appraisal fees paid to perform the contract, which are actual losses caused by the breach of contract, may be claimed for compensation with receipts. The court usually supports such claims on a case-by-case basis. It is necessary to list these expenses separately from the loss of the house price difference to avoid having the overall claim reduced; if the claim is for continued performance rather than rescission of the contract, the paid amount will be converted into part of the purchase price, so there will be no issue of refund. Instead, the party may claim damages for breach of contract during the overdue transfer period.

Q4: The seller sold the house to a third party at a high price. What should I do?

First, check the status of the third party: If the house has not been transferred yet, you can sue the seller to require them to continue to perform the contract and apply for seizure, so as to lock in the subject matter before the transfer; if the transfer has already been completed but the third party colludes with the seller to harm your interests, you can claim that the subsequent sales contract is invalid according to Article 154 of the Civil Code and recover the house; if the third party constitutes a bona fide acquisition, the house cannot be recovered, and you can instead claim compensation for the price difference, double deposit or breach of contract. At the same time, verify the seller's other assets and apply for preservation to prepare for the enforcement after winning the lawsuit, so as to avoid winning the lawsuit but not being able to get the money; the factual evidence of the sale of the same house to two buyers (such as the online signing time and payment receipts) should be fixed as soon as possible.

Q5: How long does it take to litigate such cases? And approximately how much does it cost?

In terms of time, according to Article 152 of the Civil Procedure Law of the People's Republic of China (amended in 2023 and implemented on January 1, 2024), cases applying the ordinary procedure shall be concluded within six months from the date of filing. Cases with clear facts and simple rights and obligations relationships can apply the summary procedure for faster adjudication; for cases involving price difference appraisal, the appraisal period will be appropriately postponed before making a judgment. In terms of fees, litigation fees shall be paid in installments according to the amount of the dispute. For cases claiming price differences, the amount of the dispute is higher and the fees will increase accordingly. Application for preservation of evidence shall be subject to separate calculation of preservation fees and guarantee fees, and attorneys' fees shall be paid in accordance with the contract of entrustment. Determining the amount of the claim reasonably and providing all evidence at once is the key to controlling costs and reducing the litigation period.

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 real estate transactions·Beijing Henglue Law Firm