[Direct answer]If the seller breaches the contract and raises the price, the buyer does not necessarily have to accept the return of the deposit and leave it at that. If the contract is valid, the buyer has fulfilled his payment obligation in accordance with the contract, and the house has not been sold or transferred to a bona fide third party, the buyer may, in accordance with Articles 577 and 580 of the Civil Code of the People's Republic of China, sue to require the seller to continue to perform the contract, order the seller to assist in handling the transfer registration, and, if the seller refuses to cooperate after the judgment takes effect, the buyer may apply for compulsory execution to complete the transfer directly; at the same time, the buyer may claim damages for breach of contract, and if the seller maliciously breaches the contract and sells the house to another party, the buyer may also claim the loss of the price difference. It is advisable to sue as soon as possible and apply for property preservation and seizure of the house at the same time. For details, please refer to the following link:Legal services for real estate transactions and construction projectsAndBeijing Henglu Law Firm.

I. Problem Background and Typical Scenarios

In second-hand housing transactions, sellers often increase the price and breach the contract during periods of rapid house price increases or before the implementation of favorable policies such as school districts and planning. Typical scenarios include: sellers explicitly demanding a price increase, refusing to sign the online contract or transfer the ownership without making up the price difference; avoiding meeting with buyers, refusing to accept the final payment, and creating the illusion that the buyer is in breach of contract; delaying negotiations with buyers while selling the house at a higher price to others and transferring ownership first; claiming that the contract is invalid or ineffective due to reasons such as the spouse's disapproval or the co-owner's failure to sign. At this point, buyers have often already paid the deposit, down payment, or even most of the purchase price. Whether to insist on obtaining the property, whether to force the transfer of ownership, and how to calculate the breach of contract penalty and price difference are the three core decision-making issues, and the answers all depend on the contract's validity, the possibility of performance, and the preparation of evidence.

II. Key points of contention

  • Continue to perform or terminate the compensation: The prerequisite for forced transfer of ownership are that the contract is valid and its performance is possible. If the house has been sold and transferred to a bona fide third party, the claimant can only seek compensation. The timing of choosing between the two paths directly affects the size of the loss.
  • Penalty and compensation for losses: The proof of the penalty standard stipulated in the contract and the actual loss of price difference, as well as the application of the penalty for the deposit, determine how much money you can ultimately recover. If the claim is improper, it will be rejected or reduced by the court.
  • The risk of the house being sold separately or sealed up: During the litigation period, if the seller disposes of the house again or it is sealed up due to his own debts, the buyer needs to lock in the subject matter through measures such as preservation and pre-registration. After the judgment, the buyer can also force the transfer of ownership through the enforcement process. For more details, please refer to the relevant provisions of the Civil Procedure Law of the People's Republic of China.Legal services for creditor-debtor relations and enforcement cases.

III. Professional analysis by Henglue Law Firm

In a case handled by Henglue Law Firm, Li * purchased a house owned by Wang * in 2008. After paying a down payment of 400,000 yuan and moving in, the parties agreed in the contract to cooperate in the transfer of ownership and obtain a notarized certificate after the property rights certificate was issued. However, after the property rights certificate was issued in 2021, the parties failed to complete the transfer of ownership. Li * sued Wang * and his wife, demanding that they assist in the transfer of ownership and pay a breach of contract penalty of 80,000 yuan. Wang *'s attorney, representing him, argued that Wang * had agreed to the transfer of ownership from the outset and had already handed over the original property rights certificate. The court ruled that the contract was legally valid and both parties had agreed to the transfer of ownership, ordering Wang * and his wife to assist in the transfer within seven days. However, the court did not support the request for a breach of contract penalty, as the contract did not specify a transfer deadline and Wang * had not explicitly refused to transfer ownership. This case shows that: In cases where buyers sue to force the transfer of ownership, the key lies in the validity of the contract and the feasibility of performance; whether the breach of contract penalty can be supported depends on the contractual provisions and the actual breach of contract. Even if the transfer of ownership is supported, the breach of contract penalty may fail due to a lack of contractual provisions or evidence of breach of contract. In another case, the court ordered the seller to pay a breach of contract penalty of 100,000 yuan for failing to remove his household registration within the agreed time limit, highlighting the direct impact of the design of breach of contract clauses on the effectiveness of remedies. In litigation, lawyers typically verify the ownership status of the house first to prevent the seller from reselling the house during the trial, and then build a complete chain of evidence around payment receipts, reminder records, and communication evidence.

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 if a party fails to perform its contractual obligations or performs them in a manner inconsistent with the contract, it shall bear such breach of contract liabilities as continuing performance, taking remedial measures, or compensating for losses; Article 580 specifically provides that if a party fails to perform a non-monetary obligation, the other party may request performance, except in circumstances where performance is legally or factually impossible; Article 585 stipulates that the liquidated damages shall be determined by the agreement, and if the agreed liquidated damages are lower than the actual losses, the party may request an increase; Articles 586 and 587 stipulate the penalty for a deposit, where the party receiving the deposit fails to perform its obligations, it shall return the deposit in double; Article 588 stipulates that only one of the liquidated damages and the deposit can be applied. Practical suggestions: First, retrieve the housing registration information to verify whether the house has been resold, mortgaged, or sealed up; send a letter of reminder and fix the evidence of the seller's breach of contract; apply for property preservation when suing; for the signed house, handle the pre-registration according to Article 221 of the Civil Code of the People's Republic of China to prevent it from being disposed of again; pay attention to the three-year statute of limitations to avoid delaying the exercise of rights.

5. Henglu Law Firm's Reminder

When the seller breaches the contract and raises the price, the buyer should decide as soon as possible after verifying the ownership of the house and their own payment and performance of the contract: If the buyer insists on taking possession of the house, they should sue and preserve the evidence as soon as possible. Even if the seller refuses to cooperate after the judgment takes effect, the transfer of ownership can be completed through compulsory enforcement without the seller's presence. If the buyer accepts the termination of the contract, they should provide sufficient evidence regarding the loss of the price difference and the breach of contract penalty. This case is handled by Beijing Henglu Law Firm.Xiong BinrongThe attorney (practice license number: 11101202211410897, subject to the document issued by the judicial administrative organ) acts as the agent. Regardless of which path is chosen, time is of utmost importance. Once the house is acquired by a bona fide third party, no matter how perfect the plan is, it will be impossible to recover the house itself.

Q1: The seller requires an additional fee before agreeing to transfer the ownership. Can I sue to force the transfer of ownership?

Yes. After the house purchase contract signed by both parties is legally established and effective, the seller has the obligation to assist in handling the transfer of ownership registration. If the seller refuses to perform the obligation on the grounds of price increase, it constitutes a breach of contract. If the buyer has paid the purchase price in accordance with the contract and there are no performance obstacles such as the house being mortgaged, unsold, or transferred to another buyer, the buyer may, in accordance with Articles 577 and 580 of the Civil Code of the People's Republic of China, request the seller to continue to perform the contract and assist in the transfer of ownership. The court will generally support this request. If the seller refuses to cooperate after the judgment, the buyer may apply for compulsory enforcement. Before suing, it is recommended to first verify the ownership status of the house and apply for property preservation to prevent the seller from reselling the house during the litigation and causing the inability to perform the contract.

Q2: What are the requirements for suing to force a transfer of ownership?

There are mainly four points: First, the sales contract is legally established and effective, and the contracting parties are qualified, with true intentions of contracting and no invalid circumstances; Second, the buyer has fulfilled the main payment obligations according to the contract, or is willing to pay the balance at the same time when the judgment is made; Third, the house has the possibility of performance, and has not been sold to a bona fide third party. The mortgage has been lifted or can be lifted, and has not been sealed up to the point where it cannot be disposed of; Fourth, there are no policy obstacles. For example, if the buyer does not have the qualification to purchase a house, it will directly affect the transfer of ownership. If all the conditions are met, the court usually rules that the seller shall assist in completing the transfer of ownership within a specified period; If the seller fails to perform within the time limit, the buyer may apply for compulsory enforcement, and the court shall issue a notice of assistance in enforcement to the real estate registration authority to complete the registration.

Q3: During the litigation process, the seller transferred and registered the house to a third party. What should I do in this situation?

Immediately verify whether the transaction time and the third party's intention are in good faith. If the third party, knowing that the seller has already sold the house, still colludes with the seller to conduct the transaction in bad faith, the third party may, in accordance with Article 154 of the Civil Code of the People's Republic of China, claim that the collusion is invalid and request to confirm the invalidity of the third party's contract and recover the house; if the third party purchases the house in good faith, pays a reasonable consideration, and has completed the transfer of ownership, the house cannot be recovered, and the buyer may rescind the contract and claim compensation such as breach of contract damages and the difference in the house price. Prevention is always better than remedying the situation after the fact: applying for the seizure of the house during the lawsuit or registering a pre-registration notice in accordance with Article 221 of the Civil Code can both prevent the seller from disposing of the house again during the litigation process.

Q4: Can I both request the transfer of ownership and demand the payment of the breach of contract penalty?

Claims can be made concurrently. According to Article 85, Paragraph 3 of the Civil Code of the People's Republic of China, if the parties agree on a penalty for delayed performance, the party in breach shall pay the penalty and still perform the obligation. Therefore, in the case of delayed transfer of ownership, the party in breach can claim both the penalty for delayed performance and the penalty for delayed performance simultaneously; but if the seller breaches the contract fundamentally and causes the contract to be terminated, the penalty for breach of contract and the penalty for the deposit can only be applied according to Article 88 of the Civil Code. When claiming the penalty for breach of contract, the claim shall be based on the contract. If the contractually agreed penalty is too low, the party may request an increase based on the actual losses. The evidence of the price difference, payment receipts, and reminder records shall be submitted together to form a proof system that corroborates the losses and the breach of contract.

Q5: How long does it usually take to litigate a forced transfer case?

Depending on the complexity of the case and the dispute: for cases with clear facts and minor disputes, summary procedures can be applied, and the case is generally concluded within three months; for cases applying ordinary procedures, it is generally concluded within six months; for cases where the other party appeals, there is a second-instance procedure, and the period will be extended accordingly. After the judgment takes effect, if the seller refuses to cooperate, the buyer can apply for compulsory enforcement within the statutory time limit. The court can issue a notice of assistance in enforcement to the real estate registration authority to handle the transfer of ownership, usually without the seller's presence. Adding pre-appeal evidence collection, preservation and other procedures, the overall period is often measured in months. Therefore, if any signs of the seller's breach of contract are detected, it is necessary to sue and take preservation measures as soon as possible to avoid being passive in the face of delay.

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