Perspective | After the termination of the commercial housing sales contract, does the developer have the right to request the lifting of the pre-judicial seizure of the property?
Published:
2024-11-14
Pre-foreclosure refers to a type of preliminary restrictive registration by the people's court on real estate that has not yet undergone ownership registration by the person being executed, but may be registered in the future.
1. The Nature of Pre-Preliminary Sealing
(1) The Concept of Pre-Preliminary Sealing
Pre-preliminary sealing refers to a type of preliminary restrictive registration conducted by the people's court on real estate that has not yet been registered in the name of the person subject to enforcement but may be registered in the future.
(2) Relevant Legal Provisions
According to Article 16 of the "Notice of the Supreme People's Court, the Ministry of Land and Resources, and the Ministry of Construction on Regulating the Assistance of People's Courts in Enforcement and the Management of Real Estate by Land and Resources Departments in Accordance with the Law," "Land and real estate management departments shall handle pre-preliminary sealing registration based on the assistance enforcement notice and the attached ruling from the people's court. If the land and housing rights are registered in the name of the person subject to enforcement during the pre-preliminary sealing period, the pre-preliminary sealing registration will automatically convert to a formal sealing registration, and the sealing period will start from the date of pre-preliminary sealing."
The reason for establishing the pre-preliminary sealing system is that the person subject to enforcement only has a limited or expected interest in the unregistered property rights or anticipated property rights, and whether they can become a complete or true rights holder is still in an uncertain state.
2. Whether the Legal Basis for Pre-Preliminary Sealing is Lost if the Sale Contract for Commercial Housing is Rescinded
According to Article 209 of the "Civil Code," "The establishment, change, transfer, and extinction of real estate property rights shall take effect upon legal registration; without registration, it shall not take effect, unless otherwise provided by law." Article 25 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Handling of Enforcement Objections and Reconsideration Cases by People's Courts" states: "For objections from third parties, the people's court shall determine whether they are rights holders according to the following standards: (1) For registered real estate, determine according to the real estate registration book; for unregistered buildings, structures, and their ancillary facilities, determine according to the land use right registration book, construction project planning permit, construction permit, and other relevant evidence."
Generally speaking, if the house involved in the case has only undergone online signing and filing, the ownership of the house in dispute has not been transferred, and the house has always been registered in the name of the developer, the ownership of the house should still belong to the developer.
In the case of Shaanxi Provincial High Court (2018) Sha Min Shen 1363: "The focus of the dispute in this case is whether the enforcement objection of Longhu Company is established. First, the ownership recorded in the real estate registration book submitted by Longhu Company is that of Longhu Company, which should be recognized as the owner of the house involved in the case, rather than Hu Yuxin. Li Zhongxiao's claim that the actual owner of the house involved in the case is Hu Yuxin has no factual or legal basis. Secondly, the 'Commercial Housing Sale Contract' signed between Longhu Company and Hu Yuxin has been ruled to be rescinded, and Hu Yuxin's right to request the delivery of the house and the right to transfer ownership registration based on a valid sales contract have been lost, and the legal basis for pre-preliminary sealing has also been lost. Longhu Company's enforcement objection has factual and legal basis, and the second-instance court determined that Longhu Company enjoys the ownership of the house involved in the case, which is sufficient to exclude compulsory enforcement and is not improper."
Therefore, if the sale contract for commercial housing has only undergone online signing and filing procedures, the developer still enjoys ownership of the house involved in the case based on the real estate property certificate, that is, property rights. According to the exclusive nature of property rights, property rights have inherent priority effectiveness. After the sale contract for commercial housing is rescinded, the buyer's expectation of property rights is extinguished, and the pre-preliminary sealing measures will not be able to convert into formal sealing.
3. Can the Developer Request the Lifting of the House's Pre-Preliminary Sealing and Exclude Compulsory Enforcement if They Fulfill the Obligation to Refund the Price?
(1) Supreme People's Court (2020) Supreme Court Min Shen 4211
The Supreme Court believes: "After the legitimate rescission of the commercial housing sale contract, the basis for the existence of the pre-preliminary sealing no longer exists, and the pre-preliminary sealing measures should be lifted. However, if the pre-preliminary sealing is directly lifted, it cannot fully protect the interests of the applicant for enforcement, and it will also render the function of the pre-preliminary sealing system ineffective. Therefore, the second-instance court believes that only when Aoyuan Company has refunded the price can the enforcement of creditor Yu Cai Company be excluded. If Aoyuan Company has not refunded the price, enforcement cannot be excluded. This determination aligns with the functional positioning of the pre-preliminary sealing system. After the commercial housing sale contract is rescinded, on the one hand, the person subject to enforcement, Wang Li, loses the expectation of property rights in the pre-preliminary sealed house, but on the other hand, she has obtained a claim against Aoyuan Company for the refund of the purchase price based on the rescission of the contract. The pre-preliminary sealing, as a property preservation measure, should transform the object of preservation into the claim that Wang Li has against Aoyuan Company. The original judgment determined that enforcement could not be excluded in the absence of Aoyuan Company refunding the price. Now, Aoyuan Company has proposed in the retrial application that it is willing to refund the remaining amount to Wang Li or, as required by the court, transfer the amount to the court for freezing. In this case, the court can lift the compulsory enforcement on the house involved in the case while enforcing that amount, and the above arrangement can be handled together in the enforcement procedure, and should not be resolved by initiating the retrial procedure of this case."
(2) Xiamen Siming District People's Court (2021) Min 0203 Min Chu 6311
The court believes: "This case is due to the enforcement measures taken against the disputed property in the private lending dispute between Wang Hongbing and Zhao Yuhui, so this case belongs to the enforcement of monetary claims. In the enforcement of monetary claims, if a third party raises an enforcement objection based on an effective ruling that determines a contract (such as a sales contract) aimed at transferring ownership to be invalid or should be rescinded, and then orders the return of the subject matter of enforcement to the third party, the third party enjoys a property right nature of the return claim, which can exclude the enforcement of monetary claims. However, in the case of invalid or rescinded bilateral contracts, both parties have mutual return obligations. If the third party has not returned the price, allowing them to exclude the enforcement of monetary claims will result in the applicant for enforcement being unable to enforce the property in the name of the person subject to enforcement, nor the price that should be returned to the person subject to enforcement, which is obviously unfair. To balance the interests of all parties, enforcement can only be excluded when the third party has already returned the price."
Therefore, in the case where the developer has rescinded the commercial housing sale contract and has refunded the price, they have the effect of excluding the prior sealing, but should be careful to retain the court's assistance enforcement notice and the payment proof.
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