Zhongcheng Qingtai, real estate perspective: reasonable profit or return of the difference-whether the buyer can claim the difference between the actual decoration value and the agreed decoration value to the developer.

Brief of the case

On March 31, 2017, Wu Mou (the buyer) and A real estate company (the seller) signed a commercial housing sales contract and supplementary agreement, agreeing that Wu Mou would purchase the house developed by A company in jinniu district, Chengdu, with the decoration level of "simple decoration". According to the interior construction area, the unit price of the commercial house is 20721.26 yuan per square meter, and the total price is 2253851 yuan. Article (III) decoration and equipment standards: the commercial house uses qualified building materials, components and equipment, and the product quality of the materials used for installation, decoration and decoration meets the national mandatory standards and the standards agreed by both parties; if it does not meet the preceding standards, Wu has the right to require Company A to replace and repair it in time. Wu wrote at the end of the contract "I have known and agreed with the decoration level, facilities and equipment grade and decoration standards of the commercial house purchased". Annex VI of the commercial housing decoration materials and ancillary facilities are listed, and agreed delivery of commercial housing does not meet the decoration standards agreed in this annex, in accordance with the contract of Article 20, paragraph (III).

focus of controversy

Wu asked A real estate company compensation case involving the actual decoration value of the house and the agreed decoration value of the difference between the claim can be established.

court decision

The court believes that according to the agreement of Article 4 "basic situation of commercial housing" and Article 8 "pricing method and price" in the commercial housing sales contract, and the agreement of Article 8 "entrusted decoration agreement" that "the decoration cost under this agreement has been included in the total price of the house paid by Wu to company a, and Wu does not need to pay separately, it can be proved that the total purchase price of the house involved is calculated according to the floor area of the house, and the total purchase price is not separately priced or split for the decoration part, and the decoration service is not provided by Company A outside the blank house. Since the commercial housing itself is a trading commodity, the sales must include the developer's available profit. The decoration value agreed in the contract should be the developer's comprehensive trading market supply and demand, value law, profit space and other factors. The agreement reached through voluntary and equal negotiation between the two parties is not a simple accumulation of the materials and construction value of each individual project in the house decoration. In this case, Company A sells a hardcover house, and the decoration price is included in the total purchase price. Company A, as the seller, enjoys the right of independent pricing according to market factors, and Wu, as the buyer, enjoys the right of independent choice. Therefore, both parties agree on the decoration standard of the house involved in the case, it should be based on the meaning of the agreement on the total price of the fine decoration of the house involved in the case based on the "Agreement on Decoration and Related Standards" in Annex 6 of the contract, rather than the decoration project cost calculated based on the decoration standards agreed in Annex 6 of the contract. Regardless of whether there is an agreement on the specific amount of the decoration standard in the "Commercial Housing Sales Contract", and whether the contract filing information contains the Ming and Qing water price and the decoration transaction price respectively, the buyer requires the seller to refund the difference between the actual decoration project cost of the house and the agreed decoration transaction price, which lacks factual and legal basis.

judicial viewpoint

1. The commercial housing itself belongs to the trading commodity, and the profit of the developer must be included in the sale process. The decoration value agreed in the contract is formed by the developer on the basis of voluntary and equal consultation between the two parties by integrating various factors such as the supply and demand relationship, value law, profit space and so on in the trading market. It is not a simple accumulation of the materials and construction value of each individual project in the house decoration, the value of decoration should not be judged according to the decoration cost after identification.

2. If the seller sells a house that is decorated, the decoration price shall be included in the total purchase price for the price. As the seller enjoys the right of independent pricing according to market factors, and the buyer enjoys the right of independent choice. Therefore, the agreement between the two parties on the decoration standard of the house involved in the case shall be based on the intention of reaching an agreement on the total decoration price of the house involved in the contract.

3. The decoration value of the house and the total price of the house are not divisible. If the two parties have agreed on the decoration standard of the house through the relevant decoration agreement, the decoration standard shall be regarded as clear.

4. When the house delivered by the seller conforms to the agreement, and both parties have made a predictive and exclusive agreement on the possible difference between the decoration standard and the actual delivery, the buyer requires the seller to return it on the grounds that there is a difference between the actual decoration project cost of the house and the agreed decoration transaction price, which lacks factual and legal basis.

Related Cases

Case Source: Zong Yali v. Suzhou Crown Real Estate Co., Ltd. Dispute over Commercial Housing presale Contract-Suzhou Wuzhong District People's Court-Civil Judgment-(2016) Su 0506 Min Chu No. 3925

Court judgment: in the contract signed by both parties, the defendant included the decoration price in the total price of the house, which is similar to the unit price of the house sales. although the contract is expressed as "decoration price", 3000 yuan/square meter does not refer to the cost of house decoration nor does it only refer to the decoration price including decoration materials and decoration labor, but the sales price of house decoration, at a minimum, it also includes tax fees, management costs, profits and other pricing factors that should be considered. Thirdly, the appraisal report and adjustment issued by Zhongrun Company, an appraisal institution, show that the current decoration cost of the house involved is 2077.89 yuan per square meter on average, which is quite different from the 3000 yuan per square meter agreed in the contract. The total house price paid by the plaintiff is also in line with the market price at that time, and the plaintiff has no objection to this. Therefore, there is no situation that the overall house price is abnormally high due to the agreed decoration price. Finally, the defendant, as a developer, has the right to make independent decisions based on market price changes, and has independent pricing power on the house price and decoration sales price without violating the price policy. The defendant sold the hardcover house, the defendant in the house through the hardcover way "packaging" sale of the premise, in the buyer to include the decoration price of the total house price to accept the case, in the decoration sales price of the pricing composition can determine a reasonable profit.

Case Source: Fuli Nanjing Real Estate Development Co., Ltd. and Gao Xi and He Weichao Commercial Housing presale Contract Dispute-Nanjing Intermediate People's Court-Second Instance Civil Judgment-(2020) Su 01 Min Zhong No. 3674

The court judgment: 1. The decoration price information stated in the "Commercial Housing presale Plan" should be regarded as the refined decoration pricing method stated by the developer to the buyer; 2. The developer advertises the refined decoration house to the buyer in the form of a model house, and in the supplementary agreement, it is determined that "the content shown in the model room is not a part of the contract between the buyer and the seller" and other format clauses that exempt its obligations, this clause directly leads to the lack of authenticity of sales advertisements and promotional materials, which violates the provisions of the Regulations of Jiangsu Province on the Administration of Urban Real Estate Transactions (2018 Amendment). According to the provisions of Article 40 of the the People's Republic of China Contract Law, this standard clause shall be deemed invalid; 3. At the same time, according to the appraisal opinions issued by the appraisal institution, after deducting the taxes and fees that the decoration company should pay and the profits due, the difference between the unit price of fine decoration agreed in the contract and the unit price of decoration of the house actually delivered is calculated and used as the standard for compensation for the price difference of house decoration. The buyer requires to compensate for the loss of decoration according to the unit price of fine decoration expressed in the "Commercial Housing presale Plan", which is in line with the provisions of administrative regulations and also has the basis of the contract.

Summary

Considerations for the determination of agreed requirements for 1. decoration quality

1. The determination of the quality requirements of decoration agreed by the parties shall generally be determined according to the contents of written contracts such as commercial housing sales contract, decoration contract, decoration standard confirmation letter, supplementary agreement, etc.

2, can not be determined, combined with commercial housing sales materials such as advertising, model house settings, as well as housing decoration construction materials such as the list of decoration materials, decoration material prices and other contents of the comprehensive identification.

3. If the actual materials used for the decoration of the model house cannot be determined, the decoration construction materials of the model house, such as the decoration contract, construction drawings, material purchase contract, etc., can be used as the basis for determining the agreed requirements for the decoration quality.

Relationship between 2. decoration price and decoration quality requirements

1. The parties concerned specifically determine the decoration design, decoration construction, decoration materials and material prices, product models, manufacturers, quantity of materials and other agreements related to the decoration quality requirements. If the buyer claims to use the agreed decoration price, publicity decoration price or record decoration price as the basis for the decoration quality requirements, the price agreed in the contract does not refer to the cost or cost of the interior decoration of the house, it does not only refer to the sum of the prices of decoration equipment and materials, but the sales price of house decoration. According to all commodity trading practices including commercial housing, the sales price should at least include design, labor, taxes, fees, management costs, profits and other pricing factors that should be reasonably considered, and the most important factor to determine the final price of goods is the consensus of both parties, therefore, the buyer's request for the return of the price difference is not in line with commodity trading practices and lacks the corresponding legal basis.

2, the parties did not make a clear agreement on the decoration quality requirements, the buyer advocates the decoration price as the decoration quality requirements, in the judicial practice level of Jiangsu Province court, generally support the return of the price difference. That is, the purchase and sale contract agreed decoration price, based on the agreed decoration price.

3. the nuances of the Nanjing R & F case and the background case of this case

In the background case, as long as Company A builds and delivers the house according to the agreement of both parties, there will be no breach of contract. The court should not lower the transaction price, refund the transaction price, compensation and other issues from the perspective of the decoration price. Wu Mou appealed that whether the actual decoration standard of the house involved in the case meets the agreed decoration standard is a prerequisite for judging whether Company A should compensate for the decoration difference, if Wu Mou thinks that Company A has not delivered the house according to the decoration standard in Annex 6 of the contract, Company A may be required to perform according to the contract. However, even if Company A objectively establishes the fact that the equipment and materials used in the house decoration involved in the case do not conform to the agreement, this fact does not constitute the basis for Wu Mou to require Company A to return the decoration price difference after paying the total purchase price including the decoration price.

In the case of Nanjing R & F, R & F Company publicized the fine decoration house to the buyers in the form of model house at the sales site, and in the supplementary agreement signed with the buyer, it also determined that "the contents shown in the model room are not part of the contract between the buyer and the seller, and are not used as the basis for determining the rights and obligations of both parties" and other standard clauses to exempt the obligations of the buyer, this clause directly leads to the non-authenticity of R & F's sales advertisements and promotional materials at the commercial housing sales site, which violates the provisions of the current law. According to Article 40 of the the People's Republic of China Contract Law, the standard clause should be deemed invalid. The buyer has the right to require R & F Company to provide a fine decoration house consistent with the model house. In view of the fact that the current model house no longer exists and lacks a reference basis, the buyer requires compensation for decoration losses in accordance with the fine decoration unit price of 4500 yuan/m2 expressed in the Commercial Housing presale Plan, which conforms to the provisions of administrative regulations and has a contractual basis, which is accepted by the court.