Zhongcheng Qingtai. Real estate perspective: punitive damages in the sale of commercial housing.
Published:
2020-11-06
Brief of the case
On May 18, 2013, Peng and Company A signed a Subscription Agreement for a Building, agreeing that Peng would purchase a shop with a floor area of about 130 square meters on the first floor of a building developed and constructed by Company A at a total price of 2730000 yuan. When signing the agreement, Company A only verbally informed Peng that the house he purchased could not be signed online for the time being, and Peng paid the house price in full three times, company A has been asked to sign the contract online many times, but Company A has not done so for a long time. Peng found that Company A had sold the shop it bought to others as early as September 2012, and had gone through the formalities of signing the contract online. In order to protect his legitimate rights and interests, Peng sued to the court, requesting to cancel the signing of the "Subscription Agreement for a Building" with Company A, immediately return the paid house purchase price of 2730000 yuan and interest, and bear the compensation liability of double the paid house purchase price.
focus of controversy
The main issues in dispute in this case are: whether Peng's request to cancel the "Subscription Agreement for a Building" and whether Company A should return the paid purchase price and interest and bear double the paid purchase price.
court decision
The courts of first instance, second instance and retrial all held that: from the content of the subscription agreement signed by both parties in this case, the subscription agreement of a certain building has the main contents with substantive characteristics stipulated in the administrative measures for the sale of commercial housing, and company a has collected the purchase price, so the agreement should be recognized as the "commercial housing sales contract". Company A and Peng signed the "Subscription Agreement" and received the full amount of the house price. Although they verbally informed Peng that they could not sign the house online, they concealed the fact that the house had signed a commercial housing sales contract with others and was connected to the grid. And when the lawsuit occurred, the house purchased by Peng was registered under the name of a third person, which caused Peng to be unable to obtain the house. The purpose of the contract could not be realized due to objective obstacles, which seriously violated Peng's legitimate rights and interests. Article 9 of the interpretation of the Supreme People's Court on Several Issues concerning the application of law in the trial of commercial housing sales contract disputes stipulates that when the seller enters into a commercial housing sales contract, it deliberately conceals the fact that the house sold has been sold to a third party, resulting in the invalidation or cancellation of the contract, the buyer may request the return of the paid house purchase price and interest, compensation for losses, and may request the seller to bear the compensation liability of no more than twice the paid house purchase price. According to the above judicial interpretation, Peng may request the termination of the contract and may request Company A to bear the corresponding legal liability in accordance with the above provisions. According to the fact of company a's breach of contract, the degree of fault, the interest on the purchase price borne by company a, and the fact that company a has informed Peng mou that it cannot sign online when signing the agreement, it is comprehensively determined that company a should bear 80% of the 2730000 yuan paid for the purchase price to Peng mou.
Case analysis
The situation in this case belongs to the act of selling several houses. When Company A signed the commercial housing sales contract, it deliberately concealed the fact that the house sold had been sold. Although the two sales contracts signed before and after were valid, when the seller delivered the house to the first buyer, the second buyer naturally could not obtain the house. In this case, there is both fraud by the seller and a breach of contract in which the purpose of the contract cannot be achieved due to the seller's inability to perform, so the buyer has the right to choose to request the cancellation of the contract or the termination of the contract, and the seller shall bear punitive damages.
Related Cases
1. Zhao Jianxia and Hebi Mingjun Real Estate Co., Ltd. Civil Ruling Letter on Retrial Review and Trial Supervision of Commercial Housing Sales Contract Disputes-(2020) Yu Min Shen No. 2006
The court held that Zhao Jianxia and Mingjun Company signed the "Mingjun Oriental Subscription Agreement", which agreed that Zhao Jianxia would purchase the house involved. On the same day, Zhao Jianxia paid 130000 yuan in advance to Mingjun Company, but the two sides have not signed a formal commercial housing sales contract. Later Mingjun Company sold the house to others. According to Article 8 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Commercial Housing Sales Contract Disputes", Zhao Jianxia has the right to propose to terminate the contract and require Mingjun Company to return the paid purchase price and interest and compensate for losses.
2. Qingyuan Huixiang Real Estate Co., Ltd. and Qingyuan Zhongnan Real Estate Co., Ltd. Civil Judgment for Retrial of Disputes over Housing Sales Contracts-(2018) Yuemin Zai No. 376
The court held that after the signing of the "commercial housing sales contract" involved in the case, Huixiang company, as the seller, mortgaged the shop involved to the bank without informing Zhongnan company, and could not deliver the shop to Zhongnan company, which violated the agreement of the contract and led to the failure to realize the purpose of the commercial housing sales contract. therefore, the original retrial judgment rescinded the "commercial housing sales contract" signed by Zhongnan company and Huixiang company. After the termination of the contract, Huixiang Company shall return 867875 yuan and interest paid by Zhongnan Company (the interest shall be calculated according to the same loan interest rate of the People's Bank of China for the same period from the date of receipt on September 4, 2008). ...... According to the above-mentioned laws and regulations, Huixiang Company shall not only compensate Zhongnan Company for the losses, but also bear the liability of not more than double the purchase price paid.
3. Xinjiang Jingbei Real Estate Development Co., Ltd. and Zhang Qixiang and Zhang Hua Commercial Housing presale Contract Dispute Retrial Review and Trial Supervision Civil Ruling Letter-(2019) Xinmin Shen No. 304
The court held that according to the facts found out in the original trial, Jingbei Company did not obtain the commercial housing presale license certificate, which was the fundamental reason for the invalidity of the "Commercial Housing presale Contract. Jingbei Company claimed that Zhang and Zhang Hua entered into a contract with Jingbei Company knowing that Jingbei Company had not obtained the commercial housing presale license certificate and did not provide evidence to prove it. The original judgment ruled that Jingbei Company was correct in bearing the liability for compensation. ...... The original trial ordered Jingbei Company to return the paid house purchase price and interest, and bear the liability for compensation of double the paid house purchase price, which is not improper.
4. Hengrun Industrial Co., Ltd. and Zhang Yicheng Commercial Housing Sales Contract Dispute Second Instance Civil Judgment-(2015) Xinmin Yi Zhong Zi No. 378
The court held that after Hengrun Company and Zhang Yicheng signed the "Commercial Housing Sales Contract", Zhang Yicheng paid Hengrun Company 1.5 million yuan for the purchase of the house as agreed, but Hengrun Company did not fulfill the contractual obligation to deliver the house as agreed, and when selling the house involved, it deliberately concealed the fact that the house sold had been mortgaged. After the house was released, it still failed to fulfill the obligation to deliver the house in time, without informing Zhang Yicheng, the house involved in the case was mortgaged to a third party again, resulting in Zhang Yicheng's inability to obtain the house and the purpose of the contract could not be realized. ...... Accordingly, based on the fact that Hengrun Company mortgaged the house involved in the case to a third party before and after signing the contract and led to the termination of the contract, the original court ruled that it was liable for double the payment of the house purchase, which was not improper.
Summary
In order to punish the illegal acts of malicious breach of contract and fraud such as the sale of one house and two houses by developers in the field of commercial housing sales, the Supreme People's Court issued the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Commercial Housing Sales Contract Disputes in 2003, which introduced punitive The compensation system clearly stipulates five specific situations in which punitive damages are applicable, moreover, it is stipulated that under the premise that the contract for the sale of commercial housing is confirmed to be invalid or revoked or terminated under these five circumstances, the buyer can request the seller to bear no more than double the compensation liability of the purchase price paid.
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