[Direct answer]Yes. In the transaction of second-hand houses, if the other party breaches the contract, the party in compliance with the contract may, in accordance with the Civil Code of the People's Republic of China, claim for the other party to continue to perform the contract, take remedial measures, or compensate for losses. The scope of claims typically includes the penalty for the deposit, the agreed-upon breach of contract penalty, the loss of the difference in house prices, the paid intermediary fees and taxes, the interest on the use of funds, and the appraisal and loan-related fees incurred for the transaction; if no breach of contract penalty is agreed upon, the party may claim for actual losses plus the benefits that could be obtained after the contract is performed. It should be noted that the deposit shall not exceed 20% of the subject matter of the main contract, and the agreed breach of contract penalty that is excessively high compared with the losses may be appropriately reduced. The claim for losses should be raised within the three-year statute of limitations and supported by evidence.

I. Problem background and typical scenarios

The transaction chain of second-hand houses is long and involves many steps, from signing the sales contract, paying the deposit, to handling online registration, loan approval, releasing the mortgage, transferring ownership, and taking possession of the house. Any problem in any of these steps may lead to a breach of contract. Typical scenarios include: the seller refuses to transfer ownership after signing the contract due to rising house prices; the buyer fails to obtain loan approval and is unable to make payments on time; one party delays the handling of online registration, releasing the mortgage, or transferring ownership procedures; the house has rights defects such as being mortgaged, sealed up, or the co-owners or heirs not agreeing to the sale. What the party fulfilling the contract really cares about are usually three things: whether they can still take possession of the house; how much money they can get back if they don't take possession of the house; and how to calculate and prove their losses.

II. Key points of contention

First, whether to continue performance or terminate the compensation. If there are no obstacles to the transfer of the house and the buyer is willing to make up the payment, the party may request to continue performance and claim the breach of contract penalty for delay in performance; if the house has been sold to others or cannot be transferred due to seizure or mortgage, the contractual purpose cannot be achieved, and the party can only turn to termination and compensation. Second, how to define the scope of losses. Direct losses include actual expenses such as the paid purchase price, intermediary service fees, taxes, and appraisal fees; indirect losses mainly include the loss of the house price difference and the interest on the occupied funds, which are deemed as potential benefits. These losses typically need to be supported by the market transaction price, online signing price, or appraisal conclusion of similar houses in the same area. Third, whether the deposit and the breach of contract penalty can be claimed simultaneously. The two have different natures, and one of them is generally applicable. If the deposit is insufficient to compensate for the actual losses, the party may claim separately. Fourth, whether the breach of contract penalty can be adjusted. If the agreed breach of contract penalty is excessively high compared to the actual losses, the breaching party often requests a reduction. The court will comprehensively evaluate the degree of contract performance, the fault of the parties, the expected benefits, and the actual losses to make a judgment.

III. Professional analysis by Henglue Law Firm

In disputes involving breach of contract damages, the difficulty often lies not in whether there are losses, but in the extent to which the losses can be proven. A housing renovation contract dispute handled by Beijing Henglu Law Firm illustrates this point well: On October 19, 2020, the client, Wei * , signed a "Decoration Engineering Construction Contract" and a quotation list with a decoration company, agreeing that the company would undertake the renovation of his house on a turnkey basis, with a total cost of 150,000 yuan and a construction period of 65 days. The contract stipulated that the company would pay a breach of contract penalty of 0.1% of the total contract amount for each day of delay. Wei * paid 100,000 yuan and 40,000 yuan in succession, but the company failed to fulfill its obligations regarding design, quality, and construction period as agreed. As of August 1, 2022, there were still multiple quality issues such as hollow walls, uneven plaster lines, and uneven floor tiles throughout the house that had not been redone. The construction period was delayed, resulting in rental losses. After unsuccessful negotiations, Wei * sued the company in court, demanding the return of the renovation payment, payment of repair costs, compensation for rental losses, and breach of contract penalties.

The focus of this case lies in three aspects: whether the funds corresponding to the unfulfilled obligations should be returned; whether the plaintiff's claim for the repair fees on behalf of the defendant can be fully supported; and how the liquidated damages should be determined. The defendant failed to appear in court after being summoned by a subpoena, and the court conducted the trial in absentia in accordance with the law. Beijing Henglue Law FirmSu BenkaiThe attorney (practice license number: 11101202110375397, subject to the document issued by the judicial administrative organ) believes that the contract and quotation signed by the parties reflect their true intentions and are legally valid and enforceable. The contractor should fully perform its obligations. If the contractor fails to perform the construction according to the contract, the corresponding unperformed payments should be refunded, and the contractor should bear the responsibility for repairs and breach of contract. The court accepted this opinion and ruled that the defendant should refund the decoration fee of 52,477 yuan and pay the breach of contract penalty of 20,000 yuan; as for the repair fee on behalf of the plaintiff, since the plaintiff neither applied for a quality appraisal nor actually carried out the repair, the court did not separately support it, but determined it together with the breach of contract penalty within the scope of the penalty.

This approach to handling disputes also provides a reference for breaches of contract in the second-hand housing market: First, the claim for damages must be supported by corresponding evidence. Expenses that have not actually occurred or lack appraisal support are difficult to obtain compensation for separately; Second, the claim for repayment of funds and breach of contract compensation can be pursued concurrently, but the nature of the funds must be distinguished; Third, the amount of the breach of contract penalty is determined by the court based on the performance of the contract, actual losses, and unpaid amounts. When making a claim, it is more effective to provide a calculation basis than to make a general statement. This applies to all disputes involving breaches of contract in the second-hand housing market.Real estate transactions and construction projectsFor the calculation of the breach of contract losses, it is recommended to complete the corresponding organization of the loss list and the evidence catalogue before suing.

IV. Practical suggestions and legal basis

According to Articles 577, 584, and 585 of the Civil Code of the People's Republic of China (adopted on May 28, 2020 and implemented on January 1, 2021), 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; 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, but shall not exceed the losses foreseen or should have been foreseen by the breaching party at the time of contract conclusion; if the contractual penalty is excessively high compared to the actual losses, the people's court or arbitration institution may, upon the request of the party, reduce it appropriately. For the application of deposits, Articles 586 and 587 shall apply, and the amount of the deposit shall not exceed 20% of the subject matter of the main contract. It is recommended that the party in compliance proceed in the following order: First, immediately send a written notice to the breaching party after discovering the breach, clearly demanding the continuation of performance or the termination of the contract, and keeping the delivery certificate; Second, fix the evidence of the housing market price and, if necessary, entrust an appraisal institution to issue an appraisal opinion on the price difference; Third, fully preserve the sales contract, payment receipts, chat records, and tax invoices, and match the expenses with the corresponding items one by one.Contract disputesFirstly, the evidence list should be included in the contract; Secondly, the parties should clarify the scope of the contract's scope of application; Thirdly, the parties should clarify the rights and obligations of both parties in the contract; Fourthly, they should pay attention to the three-year statute of limitations, and the right of rescission should be exercised within one year from the date when the parties know or should have known the grounds for rescission.

5. Henglu Law Firm's Reminder

The core competitiveness of second-hand housing default disputes lies in evidence and time. In years with significant fluctuations in housing prices, the loss of the price difference can easily reach hundreds of thousands of yuan. Whether the market price can be preserved and fixed in time directly affects the final amount of compensation. When handling similar cases in the Beijing area, it is recommended to complete three tasks before suing: verify the ownership of the house and its mortgage and seizing status, determine whether it is feasible to continue the performance of the contract; estimate the actual benefits of continuing the performance of the contract and terminating the compensation; and, if the seller may sell the house elsewhere, apply for property preservation in time and, if eligible, register the pre-announcement of the second-hand house sale and purchase.

It's also worth noting that intermediary service fees, tax receipts, loan contracts, and renovation expenses are all components of the loss calculation. Don't overlook them just because the individual amounts are small. Apply for compensation promptly after the judgment is issuedEnforcementIt also affects the speed of cash collection. If the house is inherited or there are other co-owners, the contract should be completed first before signing the agreement.Inheritance and division of family propertyThe program stipulates that if the co-owners do not agree to the sale, it may directly lead to the failure of the contract to be fulfilled. For transactions where there is no possibility of continued performance, we should decisively shift to termination and compensation to avoid prolonged stalemates that may result in further losses. For more practical guidelines, please refer to the following document:Beijing Henglu Law FirmOfficial website.

VI. Frequently Asked Questions

Q1: If the seller of a second-hand house breaches the contract, can they sue to claim compensation for losses and get support from the court?

As long as the contract is legal and valid, and you can prove the other party's breach of contract and the amount of losses, there's a high chance of winning the case. However, the court usually won't fully support losses that haven't actually occurred or lack evaluation or appraisal evidence. If the penalty for breach of contract is excessively high compared to the actual losses, it may also be appropriately reduced. It is recommended to conduct a review of the losses and evidence before filing a lawsuit, and then determine the amount of the claim.

Q2: What evidence do I need to prepare to claim damages for breach of contract?

You need to prepare the sales contract and supplementary agreement, the deposit and payment receipts, the invoice for the intermediary service fees, the tax receipts, and the online signing and filing information; the evaluation opinion on the housing price difference to prove the losses or the similar transaction records in the same community; the reminder letters and delivery certificates; and the chat records, audio recordings, and call records to prove the other party's breach of contract. The time and amount of the evidence should correspond to each other.

Q3: What are the approximate fees for attorney fees and litigation costs?

The litigation fees are calculated according to the amount of the litigation subject and are prepaid by the plaintiff in advance. After the judgment, the losing party shall bear the fees in proportion; the property preservation requires the payment of separate preservation fees and the provision of guarantees. The attorney's fees are determined through consultation based on the subject of the dispute, the complexity of the case, and the stage of the litigation. A written power of attorney is usually signed to specify the charging method and amount. The expenses involved in appraisal and identification shall be paid separately according to the actual occurrence.

Q4: How long does it take from filing a lawsuit to receiving compensation?

The first-instance trial is usually concluded within three to six months, and cases applying the simplified procedure will be completed even faster. However, the overall process will be significantly prolonged if the case involves the evaluation of the housing price difference, the service of notices, or the other party's appeal. After the judgment takes effect, if the other party fails to perform voluntarily, it is necessary to apply for enforcement. The repayment time depends on the progress of property investigation and disposal, and it often takes more than half a year for real estate auctions.

Q5: What should I do first after discovering that the other party has breached the contract?

First, fix the evidence and send a written notice to the other party, clearly requiring them to continue to perform or terminate the contract, and keep the delivery receipt; at the same time, verify the ownership of the house and its status of mortgage and seizure, and determine whether it is feasible to continue to perform the contract. If there is a risk of the house being sold to another party, you should sue and apply for property preservation as soon as possible to avoid winning the judgment but being unable to enforce it.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

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 Su Benkai·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open 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. If a dispute arises, please consult a practicing lawyer in time.