[Direct answer]If the seller breaches the contract and refuses to sell the house, the buyer first has the right to choose to demand the seller to perform the contract: if the contract is valid, the buyer has paid the purchase price in accordance with the contract, the house has not been sold to a bona fide third party, and there are no obstacles to performance such as mortgages that have not been lifted or seizures, the buyer may, in accordance with Articles 577 and 580 of the Civil Code of the People's Republic of China, request the court to order the seller to assist in handling the transfer of ownership. After the judgment, the buyer may enforce the judgment by force; if the buyer is unwilling to continue to purchase or perform the contract is no longer possible, the buyer may, in accordance with Article 563, rescind the contract and, in accordance with Article 584, claim damages such as breach of contract penalties or the difference in the value of the house. The buyer can only choose one of the two paths to exercise their rights. Regardless of which path is chosen, the buyer should file a lawsuit and apply for property preservation as soon as possible. For more details, please refer to the following link:Legal services for real estate transactions and construction projectsAndBeijing Henglue Law Firm.

1. Problem background and typical scenarios

High-frequency scenarios of sellers breaching contracts and refusing to sell properties include: the seller demanding a price increase or terminating the contract after the price of the property has risen following the signing of the contract; the seller reneging on the deal on the grounds of family opposition or the co-owners' refusal to consent; the seller only agreeing to refund the deposit in double and ending the matter there; the seller delaying online registration and transfer of ownership while secretly contacting other buyers. Most buyers have already paid the deposit, down payment, or even the full purchase price. Whether to continue demanding the property not only affects the success of the transaction, but also relates to the safety of their funds and the opportunity cost. In practice, buyers often face a dilemma: they fear that suing to enforce the contract will take too long, and they also worry that the compensation after terminating the contract will be far from enough to cover the losses caused by the rising price of the property. There is no standard answer to this choice. It is necessary to make a decision as soon as possible after verifying the current status of the property, the contract terms, and the evidence. The earlier the decision is made, the more proactive it will be.

II. Key points of contention

  • The feasibility of continuing performance: The ownership status of the house determines everything—if the house has been sold and transferred, the mortgage has not been lifted, or the house has been sealed up, it is legally or factually impossible to continue performance. In this case, the parties can only turn to seeking compensation or initiating litigation. Before initiating litigation, it is necessary to conduct a title search and verification first.
  • The connection between termination and compensation: If there is a fundamental breach of contract, the party may terminate the contract. After the termination, the party may claim damages for breach of contract or losses including the price difference. However, the party may only choose to apply either the penalty for breach of contract or the penalty for deposit, and the structure of the claim may affect the final amount of compensation.
  • Proof of the scope of the losses: The price difference resulting from the increase in housing prices needs to be supported by an appraisal report or real transaction evidence. Claims that are insufficient or excessive will affect the court's acceptance of the case. This can be combined with other evidence to strengthen the credibility of the claim.Legal services for corporate commercial and contract disputesReview the contract terms and evidence.

III. Professional analysis by Henglue Lawyers

The choice of whether to continue performance or to rescind the contract depends on whether performance can achieve the contractual purpose. In a case handled by Henglue Law Firm, Wang * purchased a commercial housing unit in a certain residential area. The developer failed to deliver the property on time for nearly nine months. Instead of rescinding the contract, Wang * insisted on demanding continued delivery and claiming breach of contract damages. After entrusting lawyers from Beijing Henglue Law Firm to sue, the court ruled that the pandemic had become a normal situation before the contract was signed and did not constitute force majeure. The grace period should be strictly applied according to the contract, and the developer was ordered to pay the full breach of contract damages of 118,366.12 yuan at the rate of 0.01% of the contract amount per day—this shows that when insisting on continuing performance, claiming breach of contract damages according to the contract can gain support without needing to prove actual losses. In contrast, in another case, the developer suspended construction for a long time and failed to deliver the property for many years. The court ruled that this constituted a fundamental breach of contract and ordered the rescission of the purchase contract and the loan contract, the return of the down payment and the principal and interest already paid, and the compensation of breach of contract damages of 50,000 yuan. A comparison of the two cases shows that when performance is still possible, it is preferable to claim continued performance and impose breach of contract damages; when fundamental breach of contract results in the failure of the contractual purpose, it is more beneficial to decisively rescind the contract to stop losses.

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 the forms of assuming breach of contract liability include continued performance; Article 580 stipulates exceptions to the right to request continued performance of non-monetary obligations, such as legal or factual inability to perform; Article 563 lists statutory grounds for termination, including a party's delay in performing the main obligation and failure to perform within a reasonable period after being urged, delay in performing the obligation, or other breach of contract that results in the failure to achieve the contractual purpose; Article 584 stipulates that the amount of compensation for losses shall be equivalent to the losses caused by the breach of contract, including the benefits that could have been obtained after the performance of the contract; Article 585 regulates the penalty for breach of contract and its judicial adjustment; Articles 586, 587, and 588 regulate the application of the penalty for breach of contract and the choice between the penalty and the deposit. Practical suggestions: Before suing, first check the status of the housing registration and online signing; send a written reminder to the seller and retain the delivery certificate, which is both a last chance for the seller to perform the contract and a preliminary action for claiming termination later; when suing, clearly state whether to continue performance or seek compensation for termination, and simultaneously apply for the seizure of the house; if claiming the loss of the price difference, apply for an evaluation of the market value of the house and retain the transaction information of the same period and location as a reference.

5. Henglu Law Firm's Reminder

After the seller breaches the contract, time often favors the seller: the longer the delay, the higher the probability of the house being sold to others, mortgaged, or sealed up, and the fewer choices the buyer has. Therefore, the first step is always to verify the current status of the house and apply for preservation, and the second step is to decide whether to continue to perform the contract or to seek compensation. This case is handled by Beijing Henglu Law Firm.Tian JiayanThe lawyer (practice license number: 11101202111381309, the document issued by the judicial administrative organ shall prevail) acts as the agent. Regardless of which path is taken, it is recommended to entrust a lawyer to first evaluate the contract's validity, the possibility of performance, and the scope of losses, in order to avoid making hasty decisions and missing the preservation window when the information is incomplete.

Q1: The seller said they're only willing to refund the deposit in double, can I refuse and request them to continue to fulfill the contract?

Yes. Double refund of the deposit is one of the seller's responsibilities in the event of a breach of contract, but it's not the only option for the buyer, nor is it a way for the seller to "purchase" the consequences of a breach of contract unilaterally. According to Article 577 of the Civil Code of the People's Republic of China, the buyer has the right to demand that the contract be performed; as long as the house has not been sold to another party or there are no obstacles to performance, the court will generally support ordering the seller to assist with the transfer of ownership. Of course, if the buyer no longer wants to purchase the house based on market judgments or their own needs, they can also choose to terminate the contract and claim the penalty for the deposit or other compensation. The specific decision should be weighed against the size of the price difference and the evidence situation, and they don't have to be guided by the seller's proposal.

Q2: The house has already been sold and transferred by the seller to another buyer. Can we still get the house back?

Generally, it is not possible. If a third party purchases the house in good faith, pays a reasonable consideration, and completes the registration, the ownership of the house has already been transferred. It is legally impossible for the buyer to require the seller to continue to perform the contract, so the buyer can only rescind the contract and claim compensation, including the return of the paid house price, interest, breach of contract penalties, or losses in the difference of the house price. If the buyer can prove that the seller colluded with the third party to harm his own interests, he may, in accordance with Article 154 of the Civil Code of the People's Republic of China, claim that the transaction is invalid and recover the house. To avoid being put in a passive position, once the buyer discovers any signs of the seller's breach of contract, he should immediately check the property registry and apply for a seizure order to lock up the subject matter before the second sale and transfer of ownership.

Q3: After the judgment to continue with the performance takes effect, what should the seller do if they still refuse to cooperate with the transfer of ownership?

There's no need to worry about the seller's passive resistance. The buyer can apply to the court for enforcement within the statutory time limit. During the enforcement process, the court will issue a notice of assistance in enforcement to the real estate registration authority. The registration authority will handle the transfer registration directly based on the effective judgment and the notice of assistance in enforcement, without requiring the seller to be present or sign additional documents. If the house is still occupied by the seller, the buyer can also apply for eviction and delivery simultaneously. It's important to note that there is a statutory time limit for applying for enforcement, and the application should be made promptly after the judgment takes effect. If the house is sealed up by other cases before enforcement, it will be handled in accordance with the order of the sealing-up, which is also the significance of preserving evidence as early as possible in the litigation stage.

Q4: If the contractually agreed upon penalty for breach of contract is too low to cover the losses from the increase in housing prices, what should I do?

You can request an increase. According to Article 85 of the Civil Code of the People's Republic of China, if the agreed penalty for breach of contract is lower than the actual losses caused, the party concerned may request the people's court or arbitration institution to increase it. The actual losses are usually determined by referring to the price difference of the house. When claiming, you should submit evaluation reports, transaction prices of the same district or the same area at the same period, and intermediary listing records, etc., to prove the difference between the contract price and the market price at the time of breach of contract. The court will comprehensively evaluate the performance of the contract, the degree of fault of the parties, and the expected benefits. Conversely, if the penalty for breach of contract is obviously excessively high compared with the actual losses, the seller may also request a reduction. Therefore, the amount claimed should be based on facts and have evidence to support it.

Q5: If the buyer has not paid the balance, can they claim to continue to perform the contract?

Generally, this is possible, but it depends on whether the conditions for performance are met. When the court orders continued performance, it usually requires the buyer to pay the remaining purchase price while the seller assists with the transfer of ownership, that is, both parties perform their obligations simultaneously. If the buyer lacks the ability to pay or refuses to pay the balance, the request for continued performance may be blocked. Therefore, before claiming continued performance, it is necessary to confirm that the buyer's loan approval, purchase eligibility, and funding arrangements are all in place. If necessary, the buyer should deposit the remaining purchase price or provide a guarantee in the litigation to demonstrate their sincerity and ability to perform the contract. This is important for obtaining a supportive court judgment and ensuring a smooth transfer of ownership in the future. It can also prevent the seller from counter-suing the buyer for breach of contract on the grounds that the buyer has not paid the balance.

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