Real estate perspective: "to the house debt" buyers, can exclude the mortgagee's enforcement.

On November 14, 2019, the Supreme People's Court issued the Minutes of the National Court's Civil and Commercial Trial Work Conference (the "Minutes"), which affirmed that the rights of consumers of commercial housing who delivered all or most of the money took precedence over the mortgage rights of the mortgagee. However, there is no clear stipulation on whether the right of the buyer of "house against debt" takes precedence over the mortgage right of the mortgagee, and whether the enforcement of the mortgagee can be excluded. With the increasing phenomenon and form of house against debt, the phenomenon of covering the purpose of guarantee in the form of "house against debt" generally occurs. Whether the buyer of "house against debt" can exclude the enforcement of the mortgagee will be an unavoidable topic, this paper will combine the existing cases to analyze and discuss the problem.

Case 1: The sale of commercial housing, in fact, after the transfer and security, can not fight the mortgagee's enforcement.

Case No.:(2018) Supreme Fa Min Shen No. 4403

Basic case

After (2016) Sichuan 03 civil judgment No. 7 at the beginning of the people's Republic of China, Ziyin Real Estate paid 66.75 million yuan for the project to the provincial 11th Construction Department, and the provincial 11th Construction Department has the right to claim the mortgage right of the project real estate. Factor Yin real estate did not comply with the judgment, the provincial eleven construction department to apply to the court for enforcement. And Yan believes that he and Ziyin Real Estate Company signed the "Commercial Housing Sales Contract" and "Supplementary Agreement" on the disputed house, and at the same time handled the advance notice registration. Yan has obtained the corresponding property rights, and the Provincial Eleventh Construction Division No right to claim the priority of mortgage compensation. After examination, the court found that the real legal relationship between Yan and Ziyin real estate is a private lending relationship, and the purpose of signing the "commercial housing sales contract" is to guarantee the performance of the loan contract.

court decision

This case has gone through the first instance, the second instance, and the retrial. Finally, the Supreme People's Court issued (2018) the Supreme Law Minshen No. 4403 Civil Ruling, which determined that "the purpose of the advance notice registration system is to guarantee the acquisition of house ownership by going through the advance notice registration procedures. Purchasers for the purpose of realizing ownership in the future. In this case, although the advance notice registration, but Yan has not yet obtained the ownership of the house involved. In the" commercial housing sales contract "and" supplementary agreement "hidden the real purpose is to provide security for the loan, if the Ziyin real estate company overdue repayment Yan a can be based on the right to claim the right to claim the right to the house, but can not be blocked but the province 11 construction division of the implementation of the house."

Case 2: After the two parties negotiate the termination of the loan contract relationship, sign the commercial housing sales contract, the loan into the purchase of money, should confirm the commercial housing sales contract relationship between the two parties, but whether it can resist the execution of the mortgagee, is open to question.

Case No.:(2015) Min Yi Zhong Zi No. 180 (Guidance Case No. 27)

Basic case

Yanhai Company defaulted on the principal and interest of Tang, Liu, Ma and Wang's loans totaling 361398017.78 yuan, which Yanhai Company failed to repay when due. After reconciliation and consensus between the two parties, the commercial housing sales contract was re-signed, and it was agreed that Yanhai Company would sell the house under its name to four people.

court decision

Before the signing of the commercial housing sales contract in dispute in this case, there was indeed a loan contract relationship between Yanhai company and Tang four people, and the loan contract was not fulfilled. Both parties signed the corresponding commercial housing presale contract and handled the advance notice registration of the pre purchase commercial housing. However, the commercial housing sales contract that the two parties sued was in the case of Yanhai Company's failure to repay the principal and interest of the loan, after renegotiation and reconciliation, the loan contract relationship was transformed into the commercial housing sales contract relationship, the loan principal and interest was converted into the paid purchase price, and the rights and obligations such as the delivery of the house, the final payment, and the liability for breach of contract were agreed. In civil trading activities, changes in the meaning of the parties shall be permitted, unless prohibited by special provisions of law. Respect for the subsequent formation of the parties to change the nature of the legal relationship is the meaning of the implementation of the principle of freedom of contract.

legal analysis

(I) the legal nature of "house-to-house debt".

1. The essence is the transfer clause, resulting in the non-occurrence of the legal effect of the mortgage, can not be against the mortgagee's enforcement.

Article 401 of the the People's Republic of China Civil Code (hereinafter referred to as the "Civil Code") "If the mortgagee agrees with the mortgagee that the mortgaged property shall be owned by the creditor when the debtor fails to perform the debt due before the expiration of the debt performance period, the mortgaged property shall only be paid in priority in accordance with the law."

According to the above provisions, the developer and the buyer (creditor) of "paying off the debt with the house" agree that "if the developer fails to perform the due debt, the relevant property shall be owned by the creditor". The agreement can not have the legal effect of paying off the debt with the house. Even if the advance notice registration has been handled, the buyer (creditor) of "paying off the debt with the house" does not enjoy the right of expectation, It cannot obtain the ownership of the property involved, it is also unable to counter the enforcement of the mortgagee, and the buyer who "pays the debt with the house" can only enjoy the right of priority compensation for the property involved.

2. The essence is "post-assignment and security", which does not have a right of expectation in rem and cannot be enforced against the mortgagee.

Article 23 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases" (hereinafter referred to as the "Private Lending Regulations") "The parties use the conclusion of a sales contract as a guarantee for the private lending contract. If the borrower cannot repay the loan and the lender requests to perform the sales contract, the people's court shall hear the case in accordance with the legal relationship of private lending. If the parties change their claims in accordance with the court hearing, the people's court shall grant permission.

The signing of a commercial housing sales contract as a guarantee for private lending is a post-concession guarantee, and the two parties have not established a real commercial housing sales contract relationship. In this case, the buyer of the "house for debt" is not a fault-free buyer. Enjoy the right to expect, and the advance notice registration for the guarantee is not enough to exclude the mortgagee's enforcement.

3. If the two parties terminate the loan relationship by consensus, the loan is converted into the purchase price, and the contract relationship for the sale of commercial housing is established, the contract relationship for the sale of commercial housing shall be established in accordance with the law.

If both parties to the loan contract terminate the loan contract relationship through negotiation, establish the commercial housing sales contract relationship, convert the principal and interest of the loan into the paid house purchase price and settle through reconciliation, it is not prohibited by Article 186 of the the People's Republic of China Property Law (now Article 401 of the Civil Code), and the purpose of concluding the commercial housing sales contract, nor does it fall under the "guarantee of a private lending contract" as stipulated in Article 23 of the Private Lending Regulations ". In the absence of the circumstances stipulated in Article 52 of the the People's Republic of China Contract Law, the contract for the sale of commercial housing has legal effect."

Under the above circumstances, the buyer of the "house against debt" is the legal buyer of the house, but whether it can resist the enforcement of the mortgagee still needs further discussion.

The legal basis for the (II) of "house-to-house debt" buyers as outsiders to file an objection to the execution of the subject matter.

Provisions in principle: "Provisions of the Supreme People's Court on Several Issues Concerning the Handling of Enforcement Objection and Reconsideration Cases by the People's Courts" (hereinafter referred to as "Provisions on Enforcement Objection and Reconsideration") Article 27 "The people's court will not support the exclusion of enforcement objections raised by outsiders, unless otherwise provided by law and judicial interpretation."

Exceptions: Article 126 of the Minutes of the National Court Civil and Commercial Trial Work Conference (hereinafter referred to as the "Minutes") clarifies that the rights of commercial housing consumers who have delivered all or most of the money have priority over the mortgage rights of the mortgagee. Therefore, if the mortgagee applies for the execution of commercial housing registered under the name of the real estate development enterprise but sold to consumers, the people's court shall support it according to law. The general home buyer does not have this priority and cannot exclude the execution of the mortgagee.

Prerequisites for the application of exceptional provisions: Article 29 of the Provisions on Execution Objection and Reconsideration "If the buyer raises an objection to the commercial housing registered in the name of the executed real estate development enterprise and meets the following circumstances and its rights can be excluded from execution, the people's court shall support it: (1) A legal and effective written sales contract has been signed before the people's court seals up; the commercial housing purchased by the (II) is for residential use and there is no other housing for residential use in the name of the buyer; the price paid by the (III) exceeds 50% of the total price agreed upon in the contract."

Through the above-mentioned legal provisions, "house-to-house debt" buyers can only exclude the mortgagee's enforcement if they have the following conditions:

1. After negotiating with the developer to terminate the loan contract, the buyer of the "house for debt" signed a commercial housing sales contract with the developer, and the loan was converted into the purchase price;

2. The buyer of the "house for debt" is the consumer of commercial housing, that is, the commercial housing purchased is used for living and there is no other housing for living in his name;

3. A legal and valid written sales contract has been signed before the seizure by the people's court;

4. The 50% that the price paid exceeds the total price agreed upon in the contract.

Summary

Generally, the buyer of "house against debt" can not resist the enforcement of the mortgagee, because the purpose of his behavior is to eliminate the existing creditor's rights and debts between the relevant parties through the house against the debt, and it is not to establish a real house buying and selling relationship. Even if the advance notice registration is handled, its real purpose is not to obtain the ownership of the real estate and does not enjoy the right of expectation, so it is not enough to exclude the enforcement of the mortgagee. However, in practice, the phenomenon of non-standard commercial housing presale is widespread. In order to protect consumers' right to survival, Article 126 of the minutes of the meeting makes an exception. In accordance with the provisions of Article 29 of the provisions of the provisions of the implementation objection and reconsideration, and the buyers who "repay the debt with the house" have the right to claim the enforcement against the mortgagee for the purpose of obtaining the ownership of the house. However, it should be noted that in order to ensure the priority of the mortgage, the provisions in the judicial application, the application of strict conditions, strictly prohibit the expansion of the scope of application.

Lawyer Advice

In the trial of cases of enforcement objection, entities and procedures are often intertwined, and various rights intersect, requiring equal emphasis on enforcement and trial, efficiency and fairness. Generally speaking, the right of survival is absolutely preferred, and the relevant cases of the Supreme People's Court are generally given the following priority: the right of property expectation of housing consumers, the mortgage of creditors, and the right of property expectation of the general buyer.

When signing the loan contract, it is recommended to carefully sign the relevant clauses of "house against debt" as the guarantee clause, because under normal circumstances, the court does not determine that the buyer of "house against debt" enjoys the right of expectation of real right, nor does it determine that it enjoys the right of priority over the mortgagee, so its application to exclude the enforcement of the mortgagee is generally not supported.