[Direct answer]It cannot be generalized, but the risks are high. Contracts for purchasing policy-based housing such as affordable housing under someone else's name are generally deemed invalid. In judicial practice, those who purchase ordinary commercial housing under someone else's name to evade purchase restrictions are often regarded as violating the public interests protected by housing regulation policies, and such contracts may be deemed invalid or the transfer requests may not be supported. Contracts disguised as sales but actually used to obtain loans under someone else's name are considered fraudulent agreements under Article 146 of the Civil Code of the People's Republic of China and are therefore invalid. After the contract is deemed invalid, the house should generally be restored to the original owner's name, and the actual investors can only claim the return of their investments and compensation for losses separately. It is recommended to consult as soon as possible if involved in such disputesLegal services for real estate transactions and construction projectsOr throughBeijing Henglue Law FirmEvaluate the path to protect rights.

1. Problem background and typical scenarios

In cities with purchase restrictions, it's not uncommon to buy a house under someone else's name: some people don't have the qualifications to purchase a house, so they buy it under the name of a qualified relative or friend; some people borrow someone else's name to apply for a mortgage in order to avoid the loan quota restrictions and secure a lower down payment; some companies borrow their employees' names to sign sales contracts and obtain funds; and some people buy public housing or resettlement housing under someone else's name to enjoy price discounts. These arrangements go smoothly when housing prices are stable, but once housing prices rise, the nominal owner reneges on the deal, or the nominal owner gets involved in debt disputes or marital changes, there will be fierce disputes over who the house actually belongs to and whether the contract under someone else's name is valid. The actual investors often face the dilemma of "paying the money but not owning the house".

II. Key points of contention

  • Determination of the validity of the contract: Whether it constitutes a collusive false representation, whether it violates public order and good customs or damages the public interest of society, directly determines whether the contract is valid or invalid, and the scope of restitution and compensation after the contract is invalidated.
  • The path to establishing the actual investors' rights: Under the nominal relationship, investors only enjoy the right to claim debts rather than property rights. Whether they can request to confirm ownership or assist in the transfer of ownership is subject to multiple restrictions, including eligibility for purchasing a house, the nature of the house, and the current registration status.
  • The disposal risk of the nominal person: If the house is registered under the nominal person's name, and the nominal person sells or mortgages it without authorization, and the third party constitutes a bona fide acquisition, the investor can only pursue legal action against the nominal person but not against the house; when the nominal person is in debt, the house may also be sealed up and executed by the court.

III. Professional analysis by Henglue Lawyers

Many cases of buying houses under someone else's name handled by Henglue Lawyers precisely correspond to three typical situations. **Situation 1: Pretending to be a sale while actually being a loan scheme** A company borrowed funds from its affiliated company to meet its capital needs. To do this, it used the name of employee Wang *who had continuously paid social insurance for five years* to sign a contract for the sale of a pre-owned house, "selling" the company-owned property for over 7.33 million yuan. Both the down payment and the 4.4 million yuan mortgage loan were actually circulated within the company system. Afterward, Wang refused to cooperate with the transfer of ownership and the company sued to invalidate the contract. The first-instance court dismissed the case due to insufficient evidence. Henglue Lawyers represented the company in the second-instance trial, reconstructing the evidence chain from aspects such as the flow of funds, the holder of property certificates, and the entity responsible for paying property management fees. The court ruled that the "sale" was a collusive sham agreement between the parties, invalidated the contract, and restored the property registration to the company's name. **Situation 2: Confirming ownership of a house purchased under someone else's name within the family** Ms. Liu obtained relocation housing qualifications in 1996 and, in 2005, purchased a housing unit through the housing reform program under her mother's name for considerations such as heating reimbursements. A written "Agreement on Relocation Housing" signed by both parties clarified that the house actually belonged to Ms. Liu. After her mother's death, other heirs claimed the property as inheritance, and the first-instance court ruled that the house should be divided among them. Henglue Lawyers submitted the written agreement and financing vouchers in the second-instance trial that closely matched the purchase amount and timing, overturning the first-instance inheritance judgment and subsequently suing for contract disputes. The court confirmed the existence of the borrow-under-someone-else's name relationship and ordered the transfer of ownership. **Situation 3: Evading purchase restrictions and conflicting with established ownership rights** Ms. Wang, who did not meet purchase eligibility requirements, purchased a house under her daughter's name. Later, in the divorce litigation of her daughter, the house was confirmed as marital property and divided. The borrow-under-someone-else's name agreement could not be executed, and although the court confirmed its termination, the investor's request for a refund of the substantial discounted amount was denied. A comparison of the three cases reveals that written borrow-under-someone-else's name agreements and financing vouchers are crucial for confirming ownership rights, while borrow-under-someone-else's name schemes to evade purchase restrictions may even jeopardize the validity of the contract itself. For cases involving company financing and equity arrangements, legal advice should be sought from professionals.Business and contract dispute resolution services for enterprisesThe team collaboratively assesses compliance risks.

IV. Practical suggestions and legal basis

At the legal basis level: Article 146 of the Civil Code of the People's Republic of China (effective January 1, 2021) stipulates that civil legal acts performed by the actor and the counterparty with false expressions of intent are invalid, and the effectiveness of civil legal acts concealed by false expressions of intent shall be dealt with in accordance with relevant legal provisions; Article 153, which stipulates that civil legal acts that violate mandatory provisions of laws and administrative regulations or violate public order and good customs are invalid; Article 311, which stipulates the constituent elements of bona fide acquisition: when the nominal person disposes of the house without authorization, if the transferee acts in good faith, pays a reasonable price, and has registered it, the transferee may acquire ownership and the investor will have difficulty recovering the house; Article 157, which stipulates the rules for returning property and compensating for losses after the invalidation of civil legal acts. At the practical advice level: If it is necessary to use a nominal person, it is necessary to sign a written loan agreement, stating the ownership of the investment, the reasons for registration, and the transfer arrangements; retain the transfer receipts of the full investment, the deed tax invoices, the property water and electricity payment records, and the actual residence proof; pay attention to changes in their own eligibility to purchase a house, and transfer ownership to "official status" as soon as possible after qualifying; if the nominal person disposes of the house without authorization or is involved in litigation for debts, immediately assert rights and apply for preservation measures.

5. Henglu Law Firm's Advice

The essence of buying a house under someone else's name is "holding one's own assets in someone else's name". The risks focus on three aspects: validity, disposition, and qualification. If the validity aspect fails, the policy evasion and loan fraud arrangements may be rejected in their entirety; if the disposition aspect fails, the registered name may become the other party's disposition right at any time; if the qualification aspect fails, even if one wins the ownership confirmation lawsuit, the transfer of ownership will still be impossible. No matter how complete the written agreement and investment certificates are, it's not as safe as registering the property under one's own name as soon as possible after obtaining the qualification. If it's really necessary to buy a house under someone else's name, the breach of contract liability and transfer arrangements should be written into the agreement and recorded throughout the entire process. This case is handled by Beijing Henglu Law Firm.Li YonghuiThe attorney (practice certificate number: 11101199611955812, subject to the certificate issued by the judicial administrative organ) acts as the agent.

Q1: After the contract for purchasing a house under someone else's name is deemed invalid, how should the house and the money be handled?

After the contract becomes invalid, according to Article 157 of the Civil Code of the People's Republic of China, the property obtained by the actor through such act shall be returned; if it cannot be returned or there is no need to return it, the actor shall make compensation in the form of a discounted price; the party at fault shall compensate the other party for the losses suffered thereby, and if both parties are at fault, each shall bear corresponding responsibilities. In the context of buying a house under someone else's name, the house is usually restored to the nominal owner's name, and the actual investor can claim the return of the purchase price and corresponding interest, and claim compensation for losses such as the appreciation of the house according to the degree of fault of both parties. Since the determination of fault often points to "both parties knowing that they are evading policies", the investor's claim for compensation may be discounted, which is also the biggest hidden cost of evading purchase restrictions by buying a house under someone else's name.

Q2: How can I prove that the house I bought under someone else's name actually belongs to me?

The key is to form a complete chain of evidence: First, evidence of the agreement to use another person's name. The written agreement to use another person's name is the most effective, and only oral agreements need to be supported by chat records and witness testimonies; Second, evidence of investment. Bank transfer receipts showing who paid the purchase price, deed tax, and maintenance fund, which are consistent with the purchase time and amount, are the most convincing; Third, evidence of possession and use. Decoration contracts, property water and electricity payment records, and actual living records; Fourth, the possession of ownership certificates. Who keeps the original real estate certificate and purchase contract. For family-internal borrowing of names, attention should also be paid to the parents' written statements or family agreements. Only when multiple types of evidence corroborate each other can the court determine that the borrowing of names exists, and then support the transfer of ownership or claims for compensation.

Q3: What should I do if the nominal buyer secretly sells or mortgages the house?

First, let's see whether the transferee constitutes bona fide acquisition: According to Article 311 of the Civil Code of the People's Republic of China, if the transferee acquires the property in good faith, pays a reasonable price, and has completed the registration, he/she shall acquire ownership of the house, and the investor cannot recover the house but can only seek compensation from the nominal owner; if the transferee knows the fact of using another person's name, acquires the property at a significantly low price, or fails to complete the registration, he/she may claim that the disposition act does not produce the effect of real rights and request the return of the house. If the house is mortgaged, it is also necessary to check whether the mortgagee is in good faith. Prevention is more important than remedy: Investors should try to keep the original house ownership certificates, or set high penalties for breach of contract in the agreement, and immediately apply for pre-litigation preservation upon discovering abnormal disposition to fix the rights status in advance.

Q4: After purchasing the house under someone else's name, I have now obtained the eligibility to buy a house. How can I transfer the ownership of the house to my own name?

Prior consultation: Sign a written confirmation agreement with the nominal owner to clarify the actual ownership of the house, and then jointly go to the real estate registration department to handle the transfer registration. This method involves the lowest tax and time costs. If the nominal owner refuses to cooperate, you can sue for assistance in handling the transfer based on the written agreement, investment certificates, and evidence of possession. The court will review the nominal ownership agreement and the investment facts, and if confirmed, it will order the nominal owner to assist in the transfer. Note two prerequisites: First, you must have local purchase qualifications at the time of transfer, otherwise even if you win the lawsuit, you will not be able to complete the registration. Second, the house must not have mortgage, seizure, or other rights encumbrances. It is recommended to handle the transfer as soon as possible after meeting the qualifications, as the longer the delay, the greater the uncertainty brought by the nominal owner's marital and debt changes.

Q5: Are buying a house under someone else's name and taking out a loan under someone else's name the same thing?

No, the legal evaluation might be completely different. When buying a house under someone else's name, there is usually a genuine purchase intention, but the registered owner and the actual investor are separated. The focus of the dispute is on property ownership and transfer of ownership. However, when obtaining a loan under someone else's name, the purpose is actually to obtain financing under the guise of a purchase and sale transaction, without any genuine intention to transfer ownership. For example, when a company uses an employee's name to sign a purchase and sale contract to obtain a mortgage loan, this constitutes a collusive fraudulent statement according to Article 146 of the Civil Code of the People's Republic of China. In this case, the purchase and sale contract is invalid, and the property should be restored to its original registration status. This may also lead to more serious regulatory and criminal risks such as loan fraud. In practice, the two types of transactions are often confused. Before asserting rights, it is necessary to clarify the nature of the transaction first, and then choose the appropriate path of property ownership confirmation, return of property, or compensation accordingly.

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·Attorney Li Yonghui·Beijing Henglue Law Firm