Zhongcheng Qingtai, real estate perspective: through the signing of commercial housing sales contract and the way of online signing of the guarantee constitutes a concession and guarantee?

Presentation of 1. issues

A concession and security is an atypical security in which the debtor or a third party transfers the subject matter to the creditor for the performance of the secured obligation, and in the event of non-performance of the obligation, the creditor may pay the subject matter. The Civil Code does not provide for a system of cession and security, but because of its advantages of flexible financing, low transaction costs and low possibility of third parties hindering the realization of claims, cession and security has always played an important role in security practice. For example, in order to finance, the developer provides guarantee for the loan by signing a contract for the sale of commercial housing, and agrees to take the commercial housing as the subject matter of the guarantee, but does not actually transfer the ownership of the commercial housing (without transferring the ownership), but transfers the right of expectation of real right, and transfers the ownership of the commercial housing to the name of the creditor when the debtor cannot fulfill the repayment obligation, does this agreement constitute a transfer and guarantee? What is its legal effect?

2. view of judicial adjudication

(I) Qingdao Intermediate People's Court of Shandong Province (2020) Lu 02 Min Zhong No. 13970

Dong Lining and Yihua Real Estate Company signed the contract for the sale of commercial housing involved in the case and signed it online, but the contract was signed on the basis of the loan agreement, with the purpose of guaranteeing the performance of the debt. At the same time, the loan agreement stipulates that Yihua Real Estate Company will repurchase the commercial housing involved in the case within a certain period of time, and will pay the return of the purchase price to Dong Lining in one lump sum, before the commercial housing sales contract can be terminated. The commercial housing sales contract is essentially a guarantee for private lending, and is a debt-for-debt agreement reached before the expiration of the debt performance period. The "Provisions on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases" before the amendment shall be applied to handle this case.

In this case, the court did not consider the guarantee by signing a contract for the sale of commercial housing as a concession guarantee, but dealt with it in accordance with article 23 of the Private Lending Regulations, which some called "post-concession guarantee" (described below).

Concession and Guarantee in (II) Private Lending-Case III of Five Typical Cases of Private Lending Disputes Released by Beijing First Intermediate Court in 2015

Li signed a loan contract with Company A, agreeing that Li would lend money to Company A. On the same day, company a and Li mou signed four more commercial housing sales contracts. in the contract, it was agreed that if company a did not repay the loan when it was due, Li mou could request to transfer the four front houses in a certain district to Li mou's name according to the housing sales contract. On the second day of signing the contract, both parties went to the Housing Authority to register the presale of the commercial housing involved. Later, Li sued to the court with Company A as the defendant, demanding to confirm the validity of the commercial housing sales contract, and transfer the commercial housing involved in the case to Li's name. The court found that the commercial housing sales contract had the nature of the liquid clause and was invalid, and finally rejected Li's claim.

In this case, the court also did not recognize the guarantee by signing a contract for the sale of commercial housing as a concession and guarantee, and the agreement to transfer the house in the event of the debtor's failure to perform the debt has no legal effect.

3. the views of our lawyers

(I) guarantee only by signing a contract for the sale of commercial housing is not a "typical concession and guarantee"

The creditor and the debtor signed a contract for the sale of commercial housing to guarantee, but did not handle the transfer, does not belong to the "typical transfer and security" (security title transfer and security), but belongs to another type of transfer and security, also known as "post-transfer and security". Refers to the performance of a debt secured by the conclusion of a contract of sale and purchase, and if the debtor fails to pay off the debt and then handles the transfer of ownership of the property, the situation is of this type, in order to avoid the "conflict between the concession and the security and the property law" and the variation. The term "typical assignment of security" means that the debtor or a third party agrees with the creditor that, in order to secure the performance of the obligation, the debtor or a third party transfers ownership of its property to the creditor in order to secure the performance of the obligation. Therefore, in the case of only signing a contract for the sale of commercial housing without the transfer of ownership, it does not meet the constituent elements of the "typical concession and guarantee.

In addition, according to Article 71 of the Jiumin minutes, if the debtor or a third party enters into a contract with the creditor and agrees to transfer the property to the creditor in form, the debtor pays off the debt when due, the creditor returns the property to the debtor or the third party, the debtor fails to pay off the debt when due, and the creditor can auction, sell or repay the creditor's rights at a discount, The people's court shall determine that the contract is valid. If the contract stipulates that the debtor fails to pay off the debts when due and the property belongs to the creditor, the people's court shall find that part of the agreement invalid, but it shall not affect the validity of other parts of the contract.

According to the above-mentioned contract, the parties have completed the transfer of the publicity method of property rights changes to the creditor's name, and the debtor has not paid off the debts when due, and the creditor requests to confirm that the property belongs to it, the people's court will not support it, but the creditor requests to refer to the law on security rights. If the provisions of the People's Court gives priority to the auction, sale, or discount of property to repay its claims, the people's claims, the people's rights. The people's court shall also support the debtor's request for the auction, sale or discount of the property to repay the debts owed to the creditor under the contract due to the failure to pay off the debts due.

Article 71 of the Nine People's Minutes also makes it clear that the transfer of ownership of the property to the creditor's name is required for the transfer of security. Under the condition that only the commercial housing network is signed but not transferred, the ownership of the house has not been transferred, which does not conform to the provisions of the Nine People's Minutes on the constituent elements of the transfer and security, and does not belong to the "typical transfer and security" but to the "post-transfer and security".

The legal effect of the (II)'s guarantee ("concession and guarantee") only by signing a contract for the sale and purchase of commercial housing.

Regardless of the type of concession and security, the law does not explicitly provide for it, let alone list it as a statutory type of security. However, article 71 of the Ninth Minute (see above) provides that the concession and security have the corresponding effect in rem, and the creditor may request the auction, sale and discount of the property. As for the legal effect of "post-assignment and guarantee" through the signing of a contract for the sale and purchase of commercial housing, the Ninth Minute does not specify the legal effect, but because it does not meet the constituent elements of the assignment and guarantee, the provisions of the Ninth Minute on the assignment and guarantee should not be applied.

Although the "post-assignment and guarantee" is not a "typical assignment and guarantee" as stipulated in the Ninth Minute, it does not indicate that it does not have the corresponding legal effect. Article 23 of the newly revised Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (2021.1.1) (hereinafter referred to as the "Regulations on Private Lending") affirms that "post-assignment and guarantee" has certain real right effects under certain conditions.

Article 23 of the Regulations on Private Lending stipulates that if the parties take the conclusion of a contract of sale as a guarantee for the private lending contract, the borrower cannot repay the loan after the maturity of the loan, and the lender requests the performance of the contract of sale, 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.

After the judgment made in accordance with the legal relationship of private lending comes into effect, the borrower fails to perform the monetary debt determined by the effective judgment, and the lender may apply for the auction of the subject matter of the contract of sale in order to repay the debt. The borrower or lender shall have the right to claim return or compensation for the difference between the price of the auction proceeds and the principal and interest of the loan due.

In summary, in the legal relationship of private lending, the existence of "post-concession and guarantee", the lender in the borrower does not perform the effective judgment to determine the monetary debt, can apply for the auction of the subject matter of the contract has been repaid debt. That is to say, "post-assignment and security" only has a certain effect in rem under certain conditions, and this view is also adopted in the above-mentioned cases.

In addition, the "Nine People's Minutes" and "Private Lending Provisions" are affirmed by the liquidation type (disposition type) and security, that is, when the secured claim can not be realized, the creditor can not of course obtain the ownership of the subject matter, but must go through the liquidation procedure, on the subject matter discount, auction, sale of the proceeds of the price of priority payment. And negates the attribution type (fluid, flow-type) assignment and security, I .e., if the claim cannot be realized, the creditor cannot directly acquire ownership of the subject matter.

4. advice from our lawyers

In the case of a commercial housing guarantee, the first step should be to analyze whether it belongs to the transfer of security provided for in Article 71 of the Ninth Minute, that is, whether the ownership of the commercial housing has been formally transferred to the creditor's name (the transfer has been processed). If the conditions of the concession and security stipulated in the Ninth Minute are met, the creditor may request the auction, sale or discount of the commercial housing with reference to the provisions of the law on security interests, but cannot request confirmation that the commercial housing belongs to it. When drafting a contract of assignment and security, the text should also avoid the direct transfer of the agreed property ownership, otherwise it is invalid.

If you do not meet the above conditions of "typical concession and guarantee", but only sign the commercial housing sales contract or record online signing, and agree to perform the commercial housing sales contract to pay off the debt in the case of non-performance of the debt in the future, this agreement belongs to the so-called "post-concession and guarantee", which is understood and applied according to the Minutes of the National Civil and Commercial Trial Conference of the Court, it does not have the effect of priority compensation after the auction, sale or discount of commercial housing. However, the above-mentioned jurisprudence shows that if the borrower fails to perform the monetary debt determined by the effective judgment, the lender may apply to auction the subject matter of the contract of sale in order to repay the debt if the provisions of article 23 of the Private Lending Regulations are met.

In addition, in private lending, if the two parties sign a contract for the sale of commercial housing to guarantee, in order to avoid subsequent disputes between the two parties on the nature of the contract of sale, the contract of sale as a guarantee can be clearly agreed in the loan contract, or the purpose of the contract signed in the contract of sale to explain. Secondly, when the lender litigated, it should also file a lawsuit with the legal relationship of private lending in order to reduce unnecessary litigation costs.