[Direct answer]In the Beijing area, if the seller conceals the fact that the house has been mortgaged and still sells it, the buyer may, in accordance with the provisions on fraud in Article 148 of the Civil Code of the People's Republic of China, request the people's court or arbitration institution to rescind the contract and demand the return of the paid house price and compensation for losses; if the buyer still wishes to continue to perform the contract, he may also require the seller to remove the mortgage and handle the transfer of ownership in accordance with the contract and bear the liability for breach of contract. The key point is to prove that the seller knew about the existence of the mortgage but intentionally concealed it, and that this concealment affected your intention to enter into the contract. Before purchasing the house, it is necessary to check the real estate registration book and the online signing status. For more details, please refer to the following link:Real estate sales and construction project services.

I. Problem background and typical scenarios

In second-hand housing transactions, sellers concealing mortgages is a frequent dispute. Typical scenarios include: the house still has a bank mortgage that has not been settled but is not disclosed to the buyer, and the buyer only finds out when transferring ownership that the house has been sealed up or registered as a mortgage; the seller delays by saying "I will pay it off soon", but in fact is unable to remove the mortgage; and multiple mortgages and private mortgages are not disclosed, resulting in the inability to complete online signing or transfer of ownership. Many buyers trust verbal promises and pay a deposit without checking the registration book, only to find themselves in a dilemma of losing both money and the house. Although the second-hand housing market in Beijing is active and mortgage and seizure information can be checked through the real estate registration system, some sellers still take advantage of the information gap to conceal the truth. For transactions involving the safety of funds, it is necessary to take corresponding measures to protect the interests of buyers.Creditor-debtor relations and enforcement case servicesFor matters involving contractual texts, you may refer to the following for reference:Business and contract dispute services for enterprises.

II. Key points of contention

There are three main points of contention. First, whether it constitutes fraud: if the seller knows about the mortgage but intentionally fails to disclose it, and the mortgage affects the buyer's ability to enter into a contract or transfer ownership, it is likely to be deemed fraudulent; if the buyer knew or should have known about it, it would be difficult to establish fraud. Second, the choice of remedies: whether to rescind the contract and refund the payment, or to continue with the performance and request the removal of the mortgage. Third, the scope of losses: whether the buyer can claim back the paid housing price, taxes, agency fees, and reasonable interest. The controversy also lies in whether the mortgage substantially hinders the transfer of ownership. In cases involving overlapping seizures, the parties can discuss the matter together.Financial capital and cross-border services involving foreign countriesUnderstand asset verification; for matters related to transaction security, you can refer to the relevant documents for further information.Special services and other case services.

III. Professional analysis by Henglue Law Firm

Based on the practical experience of handling housing sales cases in our firm, the key to winning or losing a mortgage dispute lies in the "disclosure obligation" and "evidence preservation". Many buyers only verbally ask the sellers if there are any mortgages, but fail to keep the responses, making it difficult to prove the seller's concealment in litigation. Henglu Lawyers usually suggest the following: Before signing the contract, the buyer should independently or entrust others to check the real estate registration book and include the mortgage and seizure status in the disclosure clause of the contract; use fund supervision for payment, and stipulate that removing the mortgage is a precondition for transferring ownership; and immediately send a letter to fix the facts of the breach of contract after discovering the concealment. According to Articles 148 and 157 of the Civil Code of the People's Republic of China, after the seller is rescinded for fraud, the seller shall return the property and compensate the buyer for the loss of trust; if the buyer chooses to continue the performance, the buyer may claim that the seller remove the mortgage and bear the liability for breach of contract. It is advisable to organize evidence as early as possible, as delaying may lead to the house being seized and executed by other creditors, increasing the difficulty of recovering the payment. If professional judgment is needed, assistance can be sought from professionals.Personal injury and medical dispute servicesSpecial support for real estate other than residential properties.

IV. Practical suggestions and legal basis

The core basis is Article 148 (fraud can be revoked), Article 157 (revocation consequences: return of property and compensation for losses), Article 500 (contractual fault), Article 595 and Article 598 (sales contract and seller's warranty for defects in rights) of the Civil Code of the People's Republic of China (effective from January 1, 2021); Article 38 of the Urban Real Estate Management Law of the People's Republic of China (amended on August 26, 2019) regarding the prohibition of transferring real estate that has been sealed up or restricted. Practical suggestions: check the registration book and online signing before purchasing a house; specify mortgage disclosure, time limit for removing the mortgage, and consequences of breach of contract in the contract; use fund supervision for payment; if any concealment is found, send a letter in time and preserve evidence, and choose to revoke the contract or continue to perform it. For cases involving fund supervision, it can be combined with other relevant provisions.Creditor-debtor relations and enforcement case servicesAdvance.

5. Henglu Law Firm's Reminder

Hiding the fact that the house is mortgaged doesn't mean it can't be bought, but the risks must be made "explicit". It is recommended to include the mortgage status, the obligation to remove the mortgage, and the amount of the breach of contract in the contract, rather than relying on the seller's verbal promises; make payments through fund supervision to avoid losing both the money and the house. If you discover the concealment, don't delay. The earlier you fix the evidence and claim to revoke or continue to perform the contract, the more likely you are to avoid the house being sealed and executed in another case. Never pay the full amount before removing the mortgage. If you need to clarify the disclosure obligations and remedies, you can consult a lawyer as soon as possible.

VI. Frequently Asked Questions

Q1: If the seller conceals the fact that the house is mortgaged, can I definitely get a refund and cancel the purchase?

If you can prove that the seller knew the house was mortgaged but deliberately concealed it, and this concealment was sufficient to affect your intention to enter into the contract, you can request to rescind the contract on the grounds of fraud according to Article 148 of the Civil Code. After the contract is rescinded, the seller shall return the paid purchase price and compensate for the loss of trust. At this time, you can return the house and get a refund. However, if you knew or should have known about the existence of the mortgage before signing the contract, or if the mortgage had been publicized in the registry but you did not check it, your claim of fraud may not be supported. Therefore, whether you can return the house depends on the seller's intentional concealment and your evidence. It is recommended that you actively check the registry and keep communication records before purchasing the house.

Q2: If I discover that the house has a hidden mortgage, what evidence do I need to prepare?

The core evidence includes: the results of the real estate registration inquiry and the online signing status, which prove the objective existence of the mortgage; the house purchase contract and the deposit and payment receipts, which prove the transaction and the amount paid; the communication records with the seller, WeChat messages or the witness of the intermediary, which prove that the other party did not disclose or promise that there was no mortgage; and the evidence that you were not aware of this. The evidence should be organized around the three aspects of "the existence of the mortgage—the seller's concealment—your being misled". The more complete the materials are, the more advantageous it will be for you to claim fraudulent rescission or breach of contract. For the paid housing price, you should also keep the funds supervision and transfer records, which will be helpful for claiming refunds.

Q3: How much will it cost in attorney's fees and litigation expenses to sue to conceal a mortgaged house?

The case acceptance fee shall be calculated in accordance with the "Measures for the Payment of Litigation Costs" based on the amount of the litigation request (such as the refund of the purchase price and the amount of compensation), which shall be borne by the losing party. If the subject matter is large, the fee will be correspondingly increased. The attorney's fee depends on whether it involves revocation, breach of contract, and enforcement. It is usually charged on a per-case basis or as a percentage of the subject matter. The specific charges shall be subject to the retainer contract and there is no uniform standard. For cases with clear evidence and only claiming a refund, the cost is relatively controllable; for cases requiring additional seizure of the creditor or appraisal, the workload will increase. It is recommended to clarify the scope of fees with the law firm before entrusting the case and to allocate the budget to mortgage disclosure and fraud evidence collection.

Q4: How long does it usually take to resolve a property dispute involving a concealed mortgage?

The first-instance ordinary procedure lasts six months, and the summary procedure lasts three months. House sales often apply the ordinary procedure due to issues such as mortgage registration inquiries and adding parties to the litigation. If the buyer chooses to rescind the contract and request a refund, the timeframe depends on the evidence and the other party's cooperation. If the house is sealed off in another case, it may also require waiting for enforcement coordination, which will prolong the process. Overall, cases with complete registration and communication evidence proceed faster, while those involving multiple creditor claims take longer to resolve. It is recommended to assert rights within one year after discovering concealment to avoid the house being disposed of by other creditors and becoming difficult to recover.

Q5: If I buy a house with a hidden mortgage, what should I do first?

It is recommended to follow four steps: First, immediately check the real estate registration book and online signing to confirm the mortgage details and whether there are any other seizures; Second, stop paying subsequent payments, and try to use fund supervision or preservation for the payments already made; Third, send a letter to the seller to require them to disclose and remove the mortgage within a specified period of time, and fix the facts of their concealment or breach of contract; Fourth, choose the path based on your demands - if you want to withdraw from the contract, request cancellation and refund compensation for fraud; if you want to continue the performance, claim that the seller should remove the mortgage and bear the breach of contract. Never pay the full amount before the mortgage is removed. If you need assistance, you can consult a lawyer as soon as possible to develop a plan.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm for specific cases.

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 limits. →Legal services for real estate transactions·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In the event of a dispute, please consult a practicing lawyer in time.