[Direct answer]It can be claimed. The resumption of construction on a unfinished building does not necessarily exempt the developer from the breach of contract liability for late delivery of the house: For the period of delay that has already occurred before the resumption of construction, the buyer has the right to require the developer to bear breach of contract liabilities such as continued performance and compensation for losses in accordance with Article 577 of the Civil Code of the People's Republic of China. If the contract stipulates a breach of contract penalty for late delivery of the house, the buyer may claim according to the contract. After the resumption of construction, the delivery date that has been reconfirmed shall be the boundary for the next period of delay. If there is a further delay, the buyer may continue to claim cumulatively. If the stipulated breach of contract penalty is too low compared with the actual losses, the buyer may request the court to increase it in accordance with Article 585. If the developer still fails to deliver within a reasonable period after being urged to do so and meets the statutory conditions for rescission in Article 563, the buyer may also rescind the contract, demand the return of the purchase price and compensation for losses. The key is to keep evidence such as the notice of suspension of construction, the announcement of resumption of construction, and the letter of urgency, and be vigilant against the "waiver" clauses that the developer may require to sign. For protection solutions, please consult a professional lawyer.Legal services for corporate commercial and contract disputesTeam.

I. Problem Background and Typical Scenarios

After a real estate project is left unfinished, it is common for the government to set up special teams to coordinate, introduce substitute construction companies, or mobilize funds to revive the project. This has become a common approach to resolving risks in many parts of China in recent years. While the resumption of construction is welcome, the buyers' demands have not been automatically resolved: How should the breach of contract penalties be calculated during the suspension period? What if the new delivery date promised by the developer after resumption of construction is further delayed? More often, developers take the opportunity of resumption of construction to require buyers to sign supplementary agreements — waiving previous breach of contract penalties, extending the delivery period, and changing the delivery standards, pressuring buyers with the threat of "non-signature affecting delivery". Some projects are also accompanied by disputes over the supervision of pre-sale funds, mortgages of construction projects, and seizures. While buyers are looking forward to receiving their homes, they also worry that the breach of contract penalties and overdue interest will ultimately become "paper rights". This is not only a contractual issue for individual owners, but also often a collective rights protection issue.

II. Key points of dispute

  • The relationship between resuming work and breach of contract liability: Resuming work is a manifestation of continuing to perform the contract, but it does not mean an exemption from past breaches of contract; unless the buyer explicitly agrees, the breach of contract penalty for the existing overdue period can still be claimed.
  • The effect of the "Waiver Clause": If there are provisions in the resumption of work agreement that waive the breach of contract penalty and indefinitely postpone the delivery date, and if there are circumstances of manifest unfairness, taking advantage of others' distress, or coercion, the buyer may claim revocation or request non-support in accordance with the relevant provisions of the Civil Code of the People's Republic of China. However, it will be much more difficult to claim after signing the agreement, so it is necessary to be cautious before signing it.
  • The correspondence between the penalty and the losses: If the agreed penalty is too low, the party may request to increase it to the actual level of losses; if the developer claims a postponement due to epidemic prevention and control or force majeure, according to Article 590 of the Civil Code, he/she can only be exempt from liability for the corresponding period, and must notify the other party in time and provide proof.

III. Professional analysis by Henglue Law Firm

Henglue Law Firm's approach to handling disputes over commercial housing sales and similar contracts is "first define the framework, then calculate the details, and finally seek enforcement". **Define the framework**: First, review the calculation method of the breach of contract penalty for delayed delivery in the commercial housing sales contract (e.g., a few thousandths of a percent per day, based on the paid housing price), the termination clause, and the notice procedure to determine whether it is more advantageous to proceed with "continued performance + breach of contract penalty" or "termination + refund and compensation" at the current stage. For developers with tight cash flow, terminating the contract to recover the purchase price is often more practical than waiting for the breach of contract penalty. For those with the ability to resume construction and guaranteed supervision accounts, continued performance with a breach of contract penalty is more feasible. **Calculate the details**: Calculate the actual period of suspension and the number of days of delay, and exclude force majeure and policy-related extension periods that the developer can prove. Collect suspension notices, announcements from the housing and urban-rural development department, sales office announcements, and communication records with owners to determine the start and end dates of the delay. **Seek enforcement**: The greatest risk of unfinished projects is "winning the lawsuit but not getting the money". Therefore, before and after suing, investigate the developer's assets, presale fund supervision accounts, and construction project mortgages, apply for property preservation in a timely manner, and, if necessary, form a collective claim with other buyers to share the costs of investigation and litigation. For conflicts involving priority rights such as project payments and mortgages, consult with relevant parties to resolve them.Real estate sales and construction project servicesThe team collaborates to evaluate the order of compensation; and ensures the collection of funds after the judgment, which can be combined with other measures.Creditor-debtor relations and enforcement case servicesDevelop an implementation strategy.

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 contractual liabilities such as continuing performance, taking remedial measures, or compensating for losses; Article 585 stipulates the rules for judicial adjustment of the agreed penalty clause. If the agreed penalty is lower than the actual losses, the party may request the people's court or arbitration institution to increase it; Article 563 stipulates that if a party delays in performing its main obligations and fails to perform them within a reasonable period after being reminded, the other party may terminate the contract; Article 590 stipulates that if a party is unable to perform the contract due to force majeure, it may be exempted from liability in part or in whole according to the impact of force majeure, and shall notify the other party in a timely manner. Practical advice: Immediately organize the purchase contract, payment receipts, invoices, and reminder records; fix the written evidence of the suspension and resumption of work; have the resumption of work supplementary agreement reviewed by a lawyer before signing it; pay attention to the three-year statute of limitations for claiming penalties; and in group projects, unify the entrustment and strategies through the owners' representatives to avoid individual "accepting private settlements" weakening the overall bargaining power.

5. Henglue Law Firm's Reminder

The core of protecting rights against unfinished buildings is not whether to claim, but how to claim effectively. After the resumption of work, buyers should avoid two things: first, being carried away by the good news of resumption and signing a supplementary agreement to waive the breach of contract penalty on the spot; second, focusing only on winning the lawsuit without paying attention to the developer's repayment ability and preservation opportunities. It is recommended to prioritize the three goals of "receiving the house", "breach of contract penalty", and "fund safety", and then choose the path of continuing performance or termination; keep written evidence throughout the process and maintain information exchange with other owners. Henglue Law Firm has accumulated practical experience in handling disputes over contracts for the sale of commercial housing and construction projects, including the extension of the construction period, the adjustment of the breach of contract penalty, and the enforcement and implementation of the contract. Specific case solutions can be provided upon request.Beijing Henglu Law FirmMake an appointment for an evaluation. If you are facing similar problems with your property, it is recommended that you consult a professional lawyer as soon as possible, bringing along your contract and payment materials. This case is handled by Beijing Henglu Law Firm.Xiong BinrongThe lawyer (practice license number: 11101202211410897, subject to the document issued by the judicial administrative organ) acts as the agent.

Q1: Can we still claim the breach of contract penalty during the suspension of work before resuming work?

Yes. The developer's breach of contract for late delivery of the house continues to exist from the agreed delivery date. Resuming construction constitutes a continuation of the performance of the contract and does not exempt the developer from past breach of contract liabilities; unless the buyer explicitly waives them in the supplementary agreement, the breach of contract penalty for late delivery during the suspension of construction can still be claimed in accordance with Article 577 of the Civil Code of the People's Republic of China. The calculation is based on the standard specified in the contract (usually a certain percentage of the paid housing price accumulated on a daily basis) multiplied by the actual number of days of delay, and the force majeure period that the developer can prove and has notified is deducted. Before making a claim, check the contract terms and the evidence of the start and end of the delay. If necessary, send a letter of reminder and keep the proof of delivery, which will lay a good foundation for subsequent negotiations or litigation.

Q2: The developer asked us to sign an agreement stating that "we will not hold them accountable after resuming work". Can we sign it?

Be cautious. Once such an agreement is signed, previous claims for breach of contract may be deemed to have been settled. To overturn this decision later, it is necessary to prove the existence of revocable circumstances such as fraud, coercion, taking advantage of someone's distress, or manifestly unfair terms, which is very difficult to provide evidence for. Before signing, you should focus on reviewing three points: whether there is implicit pressure to take possession of the property as a condition, whether the consideration for waiving the breach of contract penalty is reasonable, and whether the delivery deadline and standards have been unilaterally extended or reduced. It is recommended to have a lawyer review the supplementary agreement to strive to remove the breach of contract penalty from the scope of waiver, or to exchange a reduction or exemption of part of the breach of contract penalty for a fixed delivery date, the obligation to handle the property rights certificate, and guarantee measures, rather than unconditionally waiving it. This will avoid exchanging substantive rights for verbal promises.

Q3: What is the general standard for calculating the penalty for late delivery of the house?

First, the contract shall be executed in accordance with its provisions. The sales contract for commercial housing usually stipulates that the compensation shall be calculated based on the paid purchase price, with a certain percentage accrued daily. Some contracts stipulate a fixed amount or tiered standards. Where the contract does not stipulate or the stipulations are unclear, the buyer may claim damages for the delay in delivery of the house by referring to the rental standards of similar houses in the same area. According to Article 585 of the Civil Code of the People's Republic of China, if the agreed penalty is lower than the actual losses, the buyer may request the court to increase it; if it is excessively higher than the losses, the developer may also request a reasonable reduction. The buyer should keep actual loss evidence such as the rental contract and rental payment receipts to support the adjustment of the penalty, and should not claim the amount based solely on oral estimates.

Q4: There are many owners of unfinished buildings. How can they protect their rights collectively?

The group-based rights protection process can be divided into four steps: 1. **Unify organization**: Elect owners' representatives and establish a mechanism for information sharing and decision-making to avoid conflicting statements. 2. **Unify evidence collection**: Collectively gather documents such as suspension notices, government coordination documents, fund supervision clues, and reminder records. 3. **Unify legal representation**: Have representatives sign a collective power of attorney with law firms or individually hire the same legal team, adopting a representative litigation approach to share costs and improve efficiency. 4. **Unify strategies**: First, send collective letters of demand and report pre-sale fund issues to housing and financial regulatory authorities. Then, evaluate the timing of litigation and asset preservation. It is crucial to avoid individual acceptance of compensation packages, as this weakens the overall negotiating position. Internal agreements should also be formalized in writing, clearly defining cost-sharing and authorization scopes.

Q5: If the developer doesn't have the money, can the court enforce the judgment even if the developer wins the lawsuit?

There are practical difficulties, but they are not insurmountable. At the execution level, attention can be paid to several types of property clues: funds corresponding to the project in the pre-sale fund supervision account, unsold housing units and parking spaces, construction projects in progress, and the developer's external creditor's rights and receivables; when disposing of construction projects, attention should be paid to the priority right of compensation for the construction project price and the order of rights such as the buyer's rights. Applying for property preservation during the litigation stage and seizing assets such as unsold housing units can significantly increase the probability of recovering payments; if the project has entered the reorganization or pre-reorganization procedure, buyers should also pay attention to the special arrangements for creditor's rights declaration and buyer's rights declaration. It is recommended to investigate the asset situation before suing and determine the litigation strategy of "continuing performance" or "rescinding the refund" after assessing the feasibility of execution.

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 limits.Business and commercial legal services·Attorney Xiong Binrong·Beijing Henglu Law Firm