Perspective | Article-by-Article Interpretation of the Supreme People's Court's Interpretation on the Application of Law in Cases of Litigation over Execution Objections


Published:

2025-07-25

On July 23, 2025, the Supreme People's Court issued the "Interpretation of the Supreme People's Court on the Application of Laws in the Trial of Cases of Objections to Enforcement" (hereinafter referred to as the "Interpretation"), which came into effect on July 24, 2025. The Interpretation consists of 23 articles, the core of which is to standardize the trial procedures and substantive judgment rules for "objections to enforcement" cases, protect the legitimate rights and interests of third parties, and prevent parties from evading enforcement through false litigation. An objection to enforcement is a lawsuit in which a third party (outsider) claims substantive rights to the subject matter of enforcement during the process of enforcement, thereby requesting the exclusion of enforcement. Involving complex conflicts of interests such as the realization of creditors' rights, the determination of the scope of the property of the debtor, and the protection of the property of outsiders, it has always been a difficult point in enforcement practice. The Interpretation, in conjunction with the Civil Code, the Civil Procedure Law, the Enterprise Bankruptcy Law, and other current laws and regulations, provides detailed provisions for difficult issues in judicial practice, which is of great significance for unifying judicial standards, coordinating the connection between trial and enforcement, and curbing false litigation. This article will interpret and analyze the 23 provisions of the Interpretation one by one, and analyze the practical points of key clauses.

Introduction


 

On July 23, 2025, the Supreme People's Court issued the "Interpretation of the Supreme People's Court on the Application of Laws in Hearing Cases of Objections to Enforcement" (hereinafter referred to as the "Interpretation"), which came into effect on July 24, 2025. Interpretation The Interpretation, consisting of 23 articles, focuses on standardizing the trial procedures and substantive judgment rules for "objections to enforcement" cases, protecting the legitimate rights and interests of third parties, and preventing parties from evading enforcement through false litigation. An objection to enforcement is a lawsuit in which a third party (outsider) claims substantive rights to the subject matter of enforcement during the process of enforcement, thereby requesting the exclusion of enforcement. Involving complex conflicts of interests such as creditor's rights realization, determination of the scope of the property of the debtor, and protection of the property of outsiders, it has always been a difficult point in enforcement practice. The Interpretation, in conjunction with the Civil Code, the Civil Procedure Law, the Enterprise Bankruptcy Law, and other current laws and regulations, provides detailed provisions for difficult issues in judicial practice, which is of great significance for unifying judicial standards, coordinating the connection between trial and enforcement, and curbing false litigation. This article will interpret and analyze the 23 provisions of the Interpretation one by one, and analyze the practical points of key clauses.


 

Table of Contents


 

Article 1: Jurisdiction and Filing Deadline for Objections to Enforcement

Article 2: Determination of Defendant and Concurrent Trial in Cases with Multiple Rounds of Property Seizure

Article 3: Effect of Judgment—Lifting Enforcement Measures When Supporting the Rights and Interests of Outsiders

Article 4: Concurrent Trial and Determination of Defendant in Confirmation Requests

Article 5: Concurrent Trial of Requests for Return of Property, Payment, etc.

Article 6: Relief for Outsider's Rights and Interests in Cases of Continued Enforcement

Article 7: Litigation Handling After the Conclusion of Enforcement Procedures

Article 8: Litigation Coordination in Cases of Retrial of Enforcement Basis

Article 9: Litigation Handling When the Debtor Enters Bankruptcy Proceedings

Article 10: Handling of Cases When Erroneous Judgments are Corrected Through Judicial Supervision Procedures

Article 11: Special Protection of the Rights and Interests of Consumers of Commercial Housing (Exclusion of Priority Creditor Enforcement)

Article 12: Protection of Homebuyers in Cases of Pre-sale Payments for Commercial Housing and Contract Termination

Article 13: Exclusion of Enforcement for Debt Repayment by General Real Estate Purchasers

Article 14: Exclusion of Enforcement of General Creditors by General Real Estate Purchasers

Article 15: Exclusion of Enforcement of Real Estate Debt Offset Agreements (Preventing False Debt Offset)

Article 16: Determination of Circumstances Where Transfer Has Not Occurred "Not Due to the Outsider's Own Reasons"

Article 17: Objection to Enforcement by Construction Contractors Using Housing to Offset Engineering Payments

Article 18: Protection of Objection to Enforcement of Confiscated and Compensated Property Rights

Article 19: Protection of Objection to Enforcement by Purchasers with Pre-registration

Article 20: Leasehold Rights and "No Rent" Enforcement Lawsuits

Article 21: Legal Liability for False Litigation Hindering Enforcement

Article 22: Handling of Objections to Enforcement Filed by the Applicant for Enforcement

Article 23: Effective Date

Conclusion


 

Article 1: Jurisdiction and Filing Deadline for Objections to Enforcement


 

Original Text: "In accordance with Article 238 of the Civil Procedure Law, if an outsider raises an objection to enforcement regarding the subject matter of enforcement during the enforcement process, the people's court responsible for enforcing the subject matter of enforcement at the time the objection is raised shall review and handle it; if the outsider or the party is dissatisfied with the ruling on the objection to enforcement, they may file a lawsuit regarding the objection to enforcement with the enforcement court that made the ruling within fifteen days from the date of service of the ruling, and the people's court shall accept it."


 

Original Text: "If an outsider fails to raise an objection within the time limit stipulated in Article 6 of the Supreme People's Court's "Several Provisions on People's Courts Handling Cases of Objections to Enforcement and Reconsideration," and the people's court rules that the objection is not accepted, they may legally claim their rights from the applicant for enforcement, the respondent, etc."


 

Interpretation and Analysis: This article clarifies the jurisdiction and acceptance conditions for lawsuits regarding objections to enforcement: (1) Jurisdiction: In principle, the court responsible for enforcing the subject matter at the time the objection to enforcement is raised has jurisdiction. This provision refines the principle of the Interpretation of the Civil Procedure Law (lawsuits regarding objections to enforcement are filed with the enforcement court), solving the uncertainty caused by designated enforcement, upgraded enforcement, and cross-enforcement in practice. For example, if multiple courts have taken enforcement measures against the same property (such as waiting for seizure), the court actually responsible for enforcing the property at the time the objection is raised has jurisdiction, which helps avoid disputes between parties over jurisdiction. This provision facilitates the coordination and cooperation between trial and enforcement and reduces procedural disputes caused by jurisdictional objections. (2) Filing Deadline: If an outsider or a party is dissatisfied with the ruling on the objection to enforcement, they may file a lawsuit regarding the objection to enforcement with the enforcement court that made the ruling within 15 days from the date of service of the ruling. This deadline is consistent with the provisions of Article 238 of the Civil Procedure Law, ensuring that parties exercise their right to sue in a timely manner. In the objection to enforcement procedure, the enforcement court first reviews the outsider's objection and makes a ruling; if the ruling rejects the objection or the party is dissatisfied with the ruling, they may file a lawsuit within 15 days, and the court will substantively hear the dispute through the lawsuit procedure. It should be noted that if an outsider fails to raise an objection to enforcement within the time limit required by Article 6 of the Supreme Court's "Provisions on Objections to Enforcement and Reconsideration," and the enforcement court rules that the objection is not accepted, the outsider may still claim rights from the applicant for enforcement and the respondent through another lawsuit. In other words, even if the deadline for objections in the enforcement procedure is missed, the outsider can still file a general civil lawsuit to claim substantive rights, and will not lose the opportunity for relief due to procedural delays. This provision reflects the protection of the civil rights of outsiders, avoiding the loss of substantive rights due to procedural deadlines.


 

By clarifying the jurisdiction and filing deadline, this article reduces disputes caused by unclear jurisdiction in practice. Once an outsider files a lawsuit with the competent court in accordance with the regulations, the court should accept it. This facilitates lawsuits regarding objections to enforcement and urges interested parties to claim their rights within the statutory time limit, ensuring the smooth connection between enforcement procedures and litigation procedures.


 

Article 2: Determination of Defendant and Concurrent Trial in Cases with Multiple Rounds of Property Seizure


 

Original Text: "In the preservation of property and enforcement of monetary debt disputes, if the subject matter of enforcement is subject to waiting for seizure, seizure, or freezing, and an outsider files a lawsuit regarding an objection to enforcement, the applicant for preservation or enforcement who first seized the property and enjoys priority repayment rights such as secured property rights shall be the defendant, and other known applicants for preservation or enforcement waiting for seizure shall be the third party."


 

Interpretation and Analysis: This provision addresses situations where the same property is subject to multiple seizures. It sets rules for determining the defendants and third parties in an execution objection lawsuit, aiming to comprehensively resolve related disputes. Specifically, if a property has multiple seizures (including preservation seizures and execution seizures): when a third party files a lawsuit, the applicant for preservation or execution who first seized the property should be named as the defendant; if there are creditors with priority rights, such as secured creditors, in these seizures, then such priority creditors should also be named as defendants. In addition to the defendants, other applicants for execution or preservation who have subsequently seized the property should be included as third parties in the lawsuit. This means that all known creditors with execution measures on the same property should be included in the litigation process. Through this design, the court can centrally hear the claims of all relevant parties in one case, avoiding conflicting judgments caused by different creditors suing in different courts.


 

Practical Significance: In the past, when encountering "multiple seizures of one property," third parties often had to face multiple execution cases and might even have to file multiple lawsuits, increasing the burden and potentially leading to contradictory judgments. Article 2 of the Interpretation, by clarifying the scope of defendants and third parties, achieves a "comprehensive resolution" of disputes over multiple seizures of the same execution subject matter. This avoids multiple lawsuits by parties, conflicting judgments, and derivative disputes, improves judicial efficiency, and reduces the burden on parties. At the same time, this also helps prevent malicious collusion: if a third party and the debtor or a creditor maliciously collude to attempt to preserve property through an objection lawsuit, other creditors, as third parties, can raise objections, thereby curbing attempts at false litigation.


 

It should be noted that the "execution of monetary debt disputes" referred to in this article mainly refers to execution where the subject matter is monetary payment, which may involve multiple creditors competing for execution of the same property. This provision ensures that the procedural rights of each creditor are protected and facilitates the court's one-time judgment on whether the third party's rights to the property can exclude all executions. In practice, relevant parties should be listed according to this article to avoid omitting necessary participants in the lawsuit.


 

Article 3: Effect of Judgment—Lifting Enforcement Measures When Supporting the Rights and Interests of Outsiders


 

Original Text: "If a third party has civil rights sufficient to exclude enforcement execution regarding the subject matter of execution, and the people's court rules that the subject matter of execution shall not be executed, it shall simultaneously rule to lift the execution measures and specify the case numbers of the relevant seizure, detention, and freezing rulings. The third party may request the relevant execution court to lift the execution measures with the effective judgment."


 

Interpretation and Analysis: This article stipulates the enforcement effect of the judgment in an execution objection lawsuit: when the court confirms after trial that the third party has substantive rights sufficient to exclude enforcement execution regarding the subject matter of execution, the judgment should clearly state that the subject matter shall not be enforced, and simultaneously lift the corresponding execution measures such as seizure, detention, and freezing. In other words, the winning third party not only obtains the judgment of "no execution" of the subject matter in the main text of the judgment, but should also obtain relief in the judgment to lift the seizure and other specific execution measures. This provision has important practical value: in the past, some courts, when a third party won the case, only ruled "not to execute the subject matter," but did not clarify the steps to lift the seizure, resulting in the third party still having to apply to the execution court to lift the seizure, increasing the procedure unnecessarily. Now, the Interpretation requires the court to directly specify the lifting of the seizure ruling, etc., in the judgment and inform the third party that they can request the execution court to handle the lifting of the measures with the effective judgment. In this way, the true right holder can quickly get rid of the trouble caused by erroneous execution measures and promptly restore their right to dispose of their property.


 

In short, Article 3 reflects the requirements of "determining the facts and ending the dispute" and substantive dispute resolution, that is, while confirming the rights of the third party, it also resolves the issue of execution measures, preventing the third party from being hampered by execution measures after winning the case, resolving both substantive rights and the lifting of execution measures through one lawsuit procedure, and avoiding the situation of "case closed but matter unresolved."


 

Article 4: Concurrent Trial and Determination of Defendant in Confirmation Requests


 

Original Text: "If a third party initiates an execution objection lawsuit and, in accordance with Article 234 of the Civil Code, etc., makes a claim for confirmation of ownership of the subject matter of execution, the debtor shall be the defendant."


 

Interpretation and Analysis: This article allows third parties to concurrently file a request for confirmation of ownership of the subject matter of execution (confirmation lawsuit) in an execution objection lawsuit, and clarifies that the defendant in such a request should be the debtor. This mainly involves the situation stipulated in Article 234 of the Civil Code: if there is a dispute over ownership, interested parties may request confirmation of rights. In an execution objection lawsuit, if a third party claims ownership of the subject matter of execution, it is often necessary to confirm the ownership of the subject matter to thoroughly resolve the dispute. In past practice, due to the lack of clear provisions, many courts did not accept or handle the concurrent confirmation requests of third parties in the judgment, resulting in third parties having to file separate lawsuits to confirm ownership, increasing the burden of litigation.


 

This article provides a solution: when a third party claims ownership of the subject matter based on relevant provisions of the Civil Code, the issue of ownership confirmation can be resolved concurrently in the objection lawsuit. Listing the debtor as the defendant is in line with the general principle of ownership disputes—because the debtor is the person who nominally enjoys the rights to the subject matter, and the confirmation of ownership must be borne by the defendant. This setting ensures that the effect of the judgment can reach the person who truly needs to vacate or cooperate with the transfer (the debtor), ensuring that the judgment confirming ownership is enforceable.


 

Practical Operation: When a third party makes a claim for confirmation of ownership, it needs to provide relevant legal basis (such as relevant articles of the Property Law chapter of the Civil Code) and evidence to prove its ownership of the subject matter. When reviewing the case, the court will review the claim for confirmation of ownership together with the claim for exclusion of execution. If it is determined that the third party is indeed the owner of the subject matter, it will, according to this article, rule to confirm its ownership and, according to Article 3, simultaneously lift the execution measures, thus resolving substantive rights and execution relief simultaneously. This avoids the previous cumbersome process where third parties had to file separate lawsuits for "confirmation of ownership," and also prevents some parties from using cross-jurisdictional confirmation lawsuits to resist execution (for example, the previous situation where a third party sued in a court in another jurisdiction to confirm that the house belonged to them, and then requested the execution court to stop execution of the house after obtaining the judgment). The provision of Article 4 effectively plugs the procedural loopholes, requiring that related confirmation disputes be resolved concurrently in the execution objection lawsuit, preventing "procedural idling."


 

It should be noted that if a third party makes a claim for confirmation of ownership, in addition to listing the debtor as the defendant, the applicant for execution in the original execution case usually participates in the lawsuit as a third party (because they have an interest in the result of the confirmation of ownership). Through this arrangement, the interests of all parties can be balanced, ensuring that the ownership dispute and the execution objection claim are resolved uniformly, truly achieving the goal of "case closed, matter resolved."


 

Article 5: Concurrent Trial of Requests for Return of Property, Payment, etc.


 

Original Text: "If a third party initiates an execution objection lawsuit and makes a claim for return of property, return of payment, delivery of the subject matter, or handling of transfer registration procedures, etc., against the debtor, etc., as defendants, the people's court may hear the case concurrently; if the law stipulates that it is inappropriate to hear the case concurrently, separate cases should be filed."


 

Interpretation and Analysis: This article further expands the scope of claims that can be jointly tried in an objection to execution lawsuit. In addition to confirmation claims, if a third party also asserts payment claims (such as requesting the judgment debtor to return specific property, return the amount already paid, deliver the subject matter, or handle property transfer registration, etc.), the court can try them together. Only when the law has special provisions that deem it inappropriate to combine them, should the payment claim be filed separately from the objection lawsuit. This provision responds to practical needs. In the past, third parties often did not simply request "suspension of execution," but may also raise related civil claims, for example: a third party claims that their purchased house has been seized, and in addition to requesting the exclusion of execution, they also request that the judgment debtor be ordered to assist in handling the property transfer registration. Previously, due to the lack of system connection, many courts either did not accept such related claims, or even if they did, they did not clearly handle them in the judgment of the objection lawsuit, resulting in the third party needing to file another lawsuit for execution, delivery, and transfer procedures after winning the case. This approach is obviously inconvenient for the parties and is not conducive to dispute resolution. Article 5 of the "Interpretation" is designed to solve this problem. It embodies the concept of "resolving disputes together": any payment claims related to the subject matter of execution, as long as the law does not explicitly prohibit the combination, can be resolved in the objection lawsuit. This includes requests against the judgment debtor (such as requesting delivery or transfer), and requests against the applicant for execution (such as requesting the return of execution funds). Joint trial can prevent procedural idling and avoid repeated litigation by third parties. Of course, if the law stipulates that a certain type of request must be filed separately, it should still be filed separately. For example, special procedures such as creditor's claim declaration and objection to the execution distribution plan stipulated in the Bankruptcy Law may not be suitable for handling in an objection lawsuit. However, there is no obstacle to separating general claims for the return of property, return of payment, delivery of subject matter, and handling of registration obligations, so they should be tried together as much as possible to achieve the goal of resolving disputes in a single lawsuit.


 

This article, together with the aforementioned Article 4, constitutes a refinement of the mechanism for the "comprehensive substantive resolution" of related claims. This also reminds us that when handling such cases in practice, we should make full use of these two provisions to raise all relevant requests of the third party in one case as much as possible, avoiding subsequent lawsuits. We should also pay attention to screening whether the law prohibits the combination and choose the appropriate litigation channels according to the law.


 

Article 6: Relief for Outsider's Rights and Interests in Cases of Continued Enforcement


 

Original text of the article: "During the trial of a third party's objection to execution lawsuit, if the applicant for execution requests the people's court to continue execution and provide corresponding guarantees, the people's court responsible for trying the objection to execution lawsuit shall rule on whether to allow it. If the executing court continues execution according to law, the third party's objection to execution lawsuit shall be handled according to the following circumstances:

(1) If the third party does not enjoy civil rights sufficient to exclude compulsory execution with respect to the subject matter of execution, the lawsuit request shall be dismissed;

(2) If the third party enjoys civil rights sufficient to exclude compulsory execution with respect to the subject matter of execution, and the subject matter of execution is acquired by the applicant for execution through auction, debt offsetting, or other execution procedures, it shall be ruled that the subject matter of execution shall not be executed, and the relevant auction or debt offsetting ruling shall be revoked; if it has been delivered to the applicant for execution, the applicant for execution shall be ordered to return it at the same time, and if it refuses to return it, it shall be enforced;

(3) If the third party enjoys civil rights sufficient to exclude compulsory execution with respect to the subject matter of execution, and the subject matter of execution has been legally obtained by others through auction, sale, or other execution procedures, it shall be ruled that the proceeds from the disposal of the subject matter of execution shall not be executed, and the executing court shall pay the proceeds from the disposal to the third party; if the proceeds from the disposal have been paid to the applicant for execution or the remaining proceeds from the disposal have been returned to the judgment debtor, the applicant for execution and the judgment debtor shall be ordered to return them at the same time, and if they refuse to return them, they shall be enforced; if the executing court explains to the third party that the subject matter of execution has been legally obtained by others and the third party refuses to accept the proceeds from the disposal, the proceeds from the disposal shall be deposited, and the third party shall be informed that they can collect it at any time within five years from the date of deposit.


 

In the circumstances stipulated in subparagraphs (2) and (3) of the preceding paragraph, if the third party believes that the applicant for execution's request to continue execution is wrong and has caused losses to the third party, the third party may claim rights against the applicant for execution, execution guarantor, etc., according to law.


 

Interpretation and Analysis: This article is one of the key clauses of the "Interpretation," which details the different possible results and corresponding handling methods when execution continues during the trial of an objection lawsuit, and is of great significance to protecting the rights and interests of third parties and regulating execution behavior. The background is: when a third party files an objection lawsuit, execution should generally be suspended according to law, but the applicant for execution can apply for continued execution by providing a guarantee. If the court allows the execution to continue, it may lead to the subject matter of execution being sold or offset to others, while the outcome of the lawsuit later confirms that the third party wins the case. Article 6 is designed to provide remedies for this "execution first, then judgment" situation:

Approval and Guarantee of Continued Execution: After the filing of an objection to execution lawsuit, the execution procedure is generally suspended. However, if the applicant for execution is eager to realize the claim, it can request the court to continue execution and must provide corresponding guarantees. This article authorizes the court trying the objection lawsuit to rule on whether to allow continued execution. In this stage, the court will weigh the possible impact of continued execution on the third party and the urgent interests of the applicant. The provision of guarantees is mandatory, which is a safeguard measure for the potential losses of the third party, and will be used for compensation in case of execution errors.


 

Scenario 1: The third party loses the case - If the judgment determines that the third party does not enjoy rights sufficient to exclude execution with respect to the subject matter, then the third party's objection lawsuit request is dismissed. In this case, the execution itself is justified, and the execution that was temporarily suspended or continued due to the guarantee can be completed according to the normal process. For the third party, their substantive rights are not established, and the execution measures and results remain valid. This scenario is equivalent to confirming that the execution behavior of the applicant for execution is legitimate, and the guarantee can be released.


 

Scenario 2: The third party wins the case, and the executed property is "obtained by the applicant for execution" - that is, the subject matter is obtained by the creditor himself through auction or debt offsetting during the execution process. For example, the seized property is auctioned and happens to be purchased by the applicant for execution, or the court rules during the execution process to offset the debt to the applicant for execution with the subject matter. In this case, the third party winning the case means that this execution should not have been carried out, so the judgment should prohibit the execution of the subject matter and revoke the relevant auction transaction ruling or debt offsetting ruling. If the subject matter has been actually delivered to the applicant for execution, the applicant for execution should also be ordered to return the subject matter; if it refuses to return it, the court shall enforce the return. In other words, the property already obtained by the creditor must be returned to the true owner. This ensures that the third party's substantive rights are ultimately realized. Of course, the relevant auction or debt offsetting is revoked, and the applicant for execution's claim returns to an unpaid state, which can be dealt with later.


 

Scenario Three: The third party wins the lawsuit, but the execution property is "acquired by a third party"—that is, during execution, the subject matter is acquired by another person (not the applicant for execution) through legal auction or sale. For example, the property is auctioned off and purchased and transferred by a third party. In this case, since the buyer is a bona fide third party and has legally acquired the subject matter, it is not advisable to directly reclaim the subject matter based on the principle of maintaining transaction security. Therefore, the judgment is: it is confirmed that the execution of the price corresponding to the subject matter is not allowed, and the execution court shall return the proceeds to the third party. That is, the proceeds from the auction are used to compensate the third party's losses, which is equivalent to converting the execution result into monetary compensation to the third party. If the auction proceeds have been paid to the applicant for execution or the remaining funds have been returned to the person subject to execution, the judgment requires the applicant for execution and the person subject to execution to return the corresponding funds to the third party; if they refuse to return the funds, the court shall enforce the return. In addition, if the third party still has objections to receiving money instead of reclaiming the subject matter and refuses to receive the payment, the court shall deposit the funds and inform the third party that they can collect them within five years. This actually gives the third party sufficient time to weigh the options, but from the perspective of the judgment, the third party's property cannot be returned, and can only be remedied in a monetary way, and its substantive rights are also protected. This strictly regulates the execution behavior, protects the safety of market transactions and the rights and interests of bona fide third parties, and at the same time achieves substantial relief for the third party through monetary compensation.


 

Subsequent right of recourse: In the above situations (two) and (three), the execution continues due to the request of the applicant for execution, resulting in damage to the rights and interests of the third party. In order to further punish the applicant for execution's reckless behavior, the last paragraph of this article stipulates that if the third party believes that the applicant for execution's request to continue execution is wrong and has caused losses to the third party, the third party may separately claim compensation from the applicant for execution or its guarantor. For example, in situation (two), the third party's property was wrongly auctioned to the applicant for execution and was forced to be returned. During this period, the value of the house depreciated or the third party's rights were otherwise damaged. The third party can sue the applicant for execution or the guarantor for compensation. This is equivalent to a constraint and deterrent against the applicant for execution's abuse of the right to apply for "continued execution"—if the guarantor pays compensation, the guarantor can claim the compensation from the applicant for execution. In practice, when the court decides whether to allow continued execution, it will also explain the consequences to the applicant for execution, prompting it to exercise its rights cautiously.


 

It can be seen that Article 6, through the above mechanism, while allowing creditors to provide guarantees for continued execution, has prepared a complete remedial plan for third parties who may win the lawsuit. No matter who obtains the executed property, the third party's rights and interests have corresponding implementation channels. This balances the conflict between the applicant for execution's timely compensation and the protection of the third party's property, and minimizes the risks under the "execution before trial" model. In addition, setting up recourse liability also prevents creditors from maliciously applying for continued execution and undermining the rights and interests of third parties.


 

Article 7: Litigation Handling After the Conclusion of Enforcement Procedures


 

Original text of the article: "During the trial of a third party's execution objection lawsuit or the review of a retrial application, if the execution case has been closed, the execution court has not disposed of the subject matter of execution, and the execution measures have been lifted, the people's court shall rule to terminate the lawsuit or terminate the review. The execution objection ruling made by the original execution court is invalid. The people's court may continue to hear or review the confirmation or payment requests made by the third party based on Articles 4 and 5 of this interpretation."


 

Interpretation and analysis: This article deals with a special situation: the execution procedure ends prematurely before the objection lawsuit is concluded. For example, the execution court may close the case due to reasons such as the creditor withdrawing the execution application or debt repayment, and has lifted the seizure of the subject property. At this time, it is meaningless to discuss "whether to exclude execution", because there is no execution action. This article stipulates that if the execution case has been closed and the subject matter has not been actually disposed of, and the execution measures have also been lifted, then there is no basis for trying the objection lawsuit, and the court should rule to terminate the lawsuit. At the same time, the execution objection ruling made by the original execution court also becomes invalid due to the loss of its basis.


 

However, in order to protect the legitimate rights and interests of the third party, the latter part of this article makes an exception: if the third party, when filing a lawsuit, simultaneously filed a request for confirmation of rights or a request for payment based on Article 4 or 5, and these requests still have independent significance even after the execution case is closed, then the court may continue to hear these requests. For example, the third party claims to have ownership of the property and requests confirmation of ownership. Although the execution has been lifted, the ownership dispute still exists, and the parties still have the interest to sue to confirm who is the owner; for example, the third party requests the person subject to execution to return the property or handle the transfer. Although the seizure is gone, the delivery obligation has not yet been fulfilled, and there is still a need for trial. For these situations, if all lawsuits are terminated in a blanket manner, requiring the third party to file a separate lawsuit is obviously unfair and violates the spirit of "case closure". Therefore, this article allows the execution dispute part to be terminated while retaining the lawsuit on the confirmation of rights and payment part, and continuing the trial until an effective judgment is made.


 

This provision reflects the flexibility and humanity of the judiciary: it prevents the court and the parties from wasting resources on "procedural idling" when there is no longer any dispute over execution, and it also prevents other reasonable claims already made by the third party from falling into a vacuum. In practice, if the execution is terminated, the court will first check whether the subject matter of execution has been actually disposed of and whether the third party still has independent claims that have not been resolved, and then make a corresponding decision. For the parties, they should pay attention to the progress of the execution procedure: if the execution is terminated, leading to the termination of the objection lawsuit, they should consider changing their approach in time, such as whether they need to continue to claim their rights through ordinary procedures after the confirmation ruling becomes invalid. However, with the guarantee of this article, as long as the third party has made relevant requests when filing a lawsuit, they can still continue to protect their rights in the original case without having to restart a new lawsuit.


 

Article 8: Litigation Coordination in Cases of Retrial of Enforcement Basis


 

Original text of the article: "During the trial of a third party's execution objection lawsuit or the review of a retrial application, if the people's court decides to retry the original judgment, ruling, etc., which serves as the basis for execution, and the subject matter of execution is property other than the disputed subject matter involved in the original judgment, ruling, etc., or the third party may have civil rights that are sufficient to exclude the priority right of repayment such as the right of secured property, the third party's execution objection lawsuit may continue to be tried or reviewed; if it cannot be determined that the third party has civil rights sufficient to exclude compulsory execution, the third party's execution objection lawsuit shall be suspended."


 

Interpretation and analysis: The purpose of this article is to regulate how to handle execution objection lawsuits when the original basis for execution enters the retrial procedure, and how to connect with the retrial procedure. The situation is relatively complex, and the key is to distinguish between two different situations:

Circumstances where the trial can continue: When the original judgment/ruling is decided to be retried, but the subject matter of execution is not the subject matter of the original case dispute, or the rights claimed by the third party involve excluding the priority right of secured property, etc., then the objection lawsuit can continue. This means that the retrial does not affect the trial of the objection lawsuit. A typical example is: the original judgment executes a certain property of the person subject to execution, but this property is not the subject matter of the original dispute. In this case, even if the original case is retried, the dispute over whether the third party has the right to this property can still be tried independently without waiting for the retrial result. In addition, if the third party may have rights sufficient to exclude the priority right of repayment such as the right of secured property over the subject matter of execution, for example, the third party claims ownership of the mortgaged property or other rights sufficient to take precedence over the mortgage right, then even if the original case is retried, its dispute with the third party can still be handled.


 

Circumstances warranting the suspension of proceedings: In the context of retrial, if "it cannot be determined that the third party has civil rights sufficient to exclude enforcement," the objection suit should be suspended. This is similar to a protective suspension: perhaps because the retrial result of the original case will affect the basis of the third party's rights, it is difficult to judge the third party's rights at present; or the rights claimed by the third party are highly related to the substantive issues handled by the original judgment, and cannot be confirmed before the original case is determined. At this time, the hearing of the objection suit is suspended, and a decision will be made to continue or terminate after the retrial result is clear.


 

In summary, Article 8, in principle, tends not to interrupt the hearing of the objection suit ("should continue in principle"), unless it is absolutely necessary to suspend it. This conforms to the balance of efficiency and justice: if the third party's rights are not closely related to the original case, there is no need to delay the third party's remedy due to the retrial of the original case; only when the two are closely related and cannot be separated, should it be temporarily suspended to avoid contradictions.


 

Article 9: Litigation Handling When the Debtor Enters Bankruptcy Proceedings


 

Original text: "During the trial of an execution objection suit or the review of a retrial application, if the people's court rules to accept the debtor's bankruptcy case, the execution objection suit should be suspended or the review should be suspended. After the administrator takes over the debtor's property, the execution objection suit can continue to be tried or reviewed."


 

Interpretation and analysis: This article addresses how to deal with execution objection suits when the debtor enters bankruptcy proceedings. According to the provisions of the Enterprise Bankruptcy Law, once the people's court accepts a bankruptcy application, various civil enforcement procedures against the debtor should be suspended, and the preservation and enforcement measures already taken generally need to be lifted, so that the bankruptcy procedure can uniformly handle debt repayment. Therefore, when the execution objection suit has not yet been concluded and the debtor enters bankruptcy proceedings:

The court should rule to suspend the hearing of the objection suit. This is because the bankruptcy procedure takes over the right to dispose of the debtor's property, and continuing to hear the execution objection suit after the acceptance of bankruptcy may conflict with the bankruptcy procedure. For example, the judgment of the execution objection suit may affect the determination and distribution of bankruptcy property, so it needs to be temporarily suspended.


 

After the bankruptcy administrator takes over the debtor's property, the objection suit can continue to be heard. This means that once the bankruptcy procedure stabilizes (the administrator has completed the takeover of the property), the execution objection suit still needs to continue to substantially determine whether the third party has the right to exclude enforcement of the relevant property. If the third party's claim is established, the property should not be included in the scope of bankruptcy property; if not, the third party can claim as a creditor in bankruptcy. In any case, this dispute must be resolved, otherwise the scope of bankruptcy property is uncertain, affecting bankruptcy liquidation.


 

From the perspective of procedural connection, this article is consistent with the spirit of the bankruptcy law: protecting the needs of creditors' fair repayment and the unified disposal of debtors' property. After the acceptance of bankruptcy, the original compulsory enforcement procedure gives way to the bankruptcy procedure (similar situations for personal debt settlement). Therefore, the execution objection suit, as an extension of the enforcement procedure, should also be suspended to avoid individual creditors or third-party actions from hindering overall liquidation. However, suspension does not mean that the third party's rights are waived, but that the objection suit will continue after the bankruptcy procedure is basically stable.


 

Article 10: Handling of Cases When Erroneous Judgments are Corrected Through Judicial Supervision Procedures


 

Original text: "In cases of execution objection suits by third parties, if the judicial supervision procedure finds that supporting the third party's exclusion of compulsory execution is indeed wrong, and the people's court determines that the third party does not have civil rights sufficient to exclude compulsory execution, and the judgment dismisses the third party's lawsuit, the original relevant enforcement court shall resume enforcement according to the original priority; if the subject matter of execution has been legally transferred to others, the people's court shall rule to revoke the original judgment and terminate the lawsuit, and the applicant for execution may legally claim rights from the debtor and the third party, etc."


 

Interpretation and analysis: This article addresses situations where the effective judgment of an objection suit is overturned in a retrial (judicial supervision procedure), and stipulates the corresponding follow-up handling measures. It can be summarized into two situations:


 

Situation 1: The original judgment supporting the third party's victory is corrected, and the property is still there—If the retrial determines that the original judgment was wrong, and the third party actually does not have the right to exclude enforcement, the judgment should be changed to dismiss the third party's claim. At this time, the execution that was previously suspended due to the third party's victory should be resumed, and the original enforcement court should continue to execute the property in the original order. In short, it returns to the state without the intervention of the objection suit, and the creditor can continue the execution. This provision ensures that the creditor's claim is ultimately realized and will not be permanently obstructed by a temporary wrong judgment.


 

Situation 2: The property has been transferred to a third party when the original judgment is corrected—If the retrial finds that the subject matter of execution has been legally transferred to others (for example, during the period when the original judgment supported the third party, the subject matter was disposed of by the third party or sold to others by the debtor, resulting in the inability to recover), the court will not rashly rule in the retrial that the applicant for execution can continue the execution (because the subject matter is no longer in the name of the debtor, and cannot be executed against a bona fide third party). The handling method in this case is: to rule to revoke the original judgment and terminate the objection suit. This means that the objection suit procedure is over, and no further substantive judgment will be made. However, for the benefit of the applicant for execution, this article further stipulates: the applicant for execution may legally claim rights from the debtor and the third party, etc. That is to say, the creditor can pursue liability through other legal channels, including requiring the original debtor to continue to perform the debt, or requiring compensation for losses from the third party (if the third party is at fault, such as maliciously colluding to transfer property), etc.


 

This design is logically rigorous: when the property has fallen into the hands of a third party due to a wrong judgment and cannot be returned, the applicant's compensation issue can only be resolved through another lawsuit, such as filing a claim for damages or a claim for rescission, etc. The Supreme Court also pointed out that this is to maintain the safety of market transactions, avoid changing orders and directly executing the transferred property, and causing new disputes. At the same time, it reserves the opportunity for the applicant for execution to claim compensation from the responsible party, trying to compensate for its losses.


 

It is worth noting that the "third party" here may refer to the third party in the original objection suit, or it may include other persons related to the property transfer (such as the actual recipient, but if they obtain it legally, they generally do not need to bear the responsibility for compensation). In practice, most cases will hold the original debtor accountable, because the final transfer of property is often done by the debtor; if the third party is malicious, it should also bear joint and several liability.


 

This article reflects the mechanism for correcting false lawsuits and erroneous judgments. Especially in cases where the third party obtains a victory through dishonest means, resulting in the transfer of property, the applicant for execution can use the correction and accountability of the judicial supervision procedure to combat the behavior of evading debts through false objection suits.


 

Article 11: Special Protection of the Rights and Interests of Consumers of Commercial Housing (Exclusion of Priority Creditor Enforcement)


 

Original text: "When the people's court enforces compulsory execution on newly built commercial houses registered in the name of a real estate development enterprise being executed, and a third party files an execution objection suit on the grounds that it is a consumer of commercial houses, requesting the exclusion of compulsory execution of the priority right to payment of construction project funds, mortgage rights, and general monetary claims, and can prove that its claim meets the following conditions at the same time, the people's court shall support it:

(1) Before the seizure, the third party has signed a legally valid written purchase and sale contract with the real estate development enterprise, etc.;

(2) Before the seizure, the third party has paid the full price, or has paid part of the price as agreed in the contract and has paid the remaining price to the people's court for execution before the conclusion of the first-instance court debate;

(3) The purchased commercial housing is used to meet the needs of family life.


 

If a third party sues the person subject to execution to handle the transfer registration of the ownership of the commercial housing, and meets the provisions of the preceding paragraph, the people's court shall support it in accordance with the law.


 

If the people's court dismisses the lawsuit of the third party, the remaining payment made by the third party for execution shall be returned in time.


 

Interpretation and Analysis: This article is a core clause that provides special protection for homebuyers, detailing the conditions under which homebuyers can exclude execution in the context of developer debt execution. It is considered a further concretization and expansion of the scope of existing judicial policies. The key points are as follows:

Applicable Premise: The subject of execution is newly built commercial housing registered under the name of a real estate development enterprise, that is, new properties under the name of the developer that have not yet been delivered or have not yet obtained certificates, which have been seized and executed by the court. If the third party claims to be a consumer (homebuyer) of the commercial housing and requests the exclusion of the execution of the property, all the conditions listed in this article must be met to obtain support.


 

Types of Execution Excluded: Three types of debt execution are specifically mentioned here: the priority right to receive payment for construction projects, mortgage rights, and general monetary debts. In other words, if the homebuyer meets the conditions, they can resist the execution of the above types of debts against the commercial housing. This significantly strengthens the position of the homebuyer, allowing them to even override the priority rights and mortgage rights of the contractor under certain conditions.


 

Conditions for Supporting the Exclusion of Execution (must be met simultaneously):


(1) Legal Contract in Advance: The homebuyer and the development enterprise have signed a legally valid written house purchase contract before the seizure. - This proves that the home purchase behavior is real and legal, and occurred before the seizure.


(2) Payment of Price: The full house price has been paid before the seizure; if only part of the house price has been paid, the remaining house price must be paid into the court's execution account after the seizure and before the conclusion of the first-instance court debate. - This requirement ensures that the homebuyer's obligation to pay the price has been fulfilled or is guaranteed, preventing anyone from only signing a contract without paying but claiming rights. In practice, some homebuyers make installment payments, and when the seizure occurs, the final payment is not due. This article gives them the opportunity to make up the payment during the litigation process, as long as it is paid before the end of the first-instance debate. This payment is actually equivalent to being deposited with the court, so that it can be handled according to the judgment (if the lawsuit is won, it will be returned to the homebuyer for transfer or payment to the developer; if the lawsuit is lost, it will be returned to the homebuyer).


(3) Self-Occupancy Nature: The purchased house is used to meet the needs of family life. - This limits the homebuyer to consumers who buy a house for self-occupancy, not investors or speculators. The purpose of this condition is to prevent friends or associates of the developer from transferring assets under the guise of buying a house, and also reflects the special protection policy tilted towards the right of residence.


 

Subsequent Support Measures: If the homebuyer meets the above conditions, the court's judgment should support their request, that is, the commercial housing should not be executed to repay the debts of others. At the same time, if the homebuyer sues the person subject to execution to handle the transfer registration of the ownership of the house, the court should also support it. This is linked to the mechanism of combined trial in Article 5: The homebuyer not only protects the house from being forcibly executed and auctioned, but can also request the developer to cooperate in transferring the property certificate to their name, so as to finally obtain full ownership.


 

Handling of Homebuyer's Loss: If the court dismisses the request of the homebuyer (third party), that is, it determines that the homebuyer does not meet the conditions and the house should participate in the execution, the remaining payment made by the homebuyer for execution after the seizure should be returned to the homebuyer in time. That is, the final payment previously deposited with the court by the homebuyer according to condition (2) should be returned. This ensures that the homebuyer will not lose the money already paid due to losing the lawsuit.


 

It can be seen that Article 11 reflects the judicial policy's preferential protection of the group of homebuyers with urgent needs. By granting them priority in the execution process, their legitimate rights and interests are protected to the greatest extent. For other creditors of the developer, this may weaken their share of compensation, but from the perspective of maintaining social stability and transaction security, this is a necessary trade-off. The Supreme Court also emphasized in a press release that this move "expands the scope of protection and protects the legitimate rights and interests of homebuyers with greater force."


 

Article 12: Protection of Homebuyers in Cases of Pre-sale Payments for Commercial Housing and Contract Termination


 

Original text of the article: "The executing court freezes the pre-sale fund supervision account of the real estate development enterprise subject to execution. The third party, on the grounds that it has paid the house purchase payment to the account and the house purchase contract has been terminated, files a lawsuit for objection to execution, requesting the exclusion of the forced execution of the corresponding house purchase payment and applying for its issuance. If the reason is established, the people's court shall support it.


 

The executing court enforces the execution of the building of the real estate development enterprise subject to execution and its construction land use right within the occupied range. If the commercial housing consumer who meets the provisions of the first item and the third item of the preceding article's first paragraph, due to the inability to deliver the house and the impossibility of actual delivery, resulting in the termination of the house purchase contract, files a lawsuit for objection to execution, requesting the exclusion of the corresponding forced execution in the proceeds from the disposal of the building and its construction land use right and applying for its issuance, the people's court shall support it."


 

Interpretation and Analysis: This article still focuses on commercial housing consumers, but deals with the issue of consumer relief in the case of house purchase payments and contract termination, which can be regarded as a supplement and refinement of Article 11. In practice, there are two typical situations:


 

Situation 1: House purchase payment in the pre-sale fund supervision account: According to real estate supervision regulations, pre-sale payments for commercial housing are usually deposited into a government-designated supervision account for project construction. When the developer is burdened with debt, the court may freeze the funds in this account for execution. However, some homebuyers, due to various reasons (such as unfinished projects), have terminated the contract with the developer and hope to return the house purchase payment. The first paragraph of this article stipulates: If the homebuyer has paid the house purchase payment into the pre-sale supervision account and the contract has been terminated, and they file an objection lawsuit requesting the exclusion of the execution of this house purchase payment and the return of the payment to themselves, as long as the reason is established, the court should support it. This means that the house purchase payment is not considered as general property that can be executed by the developer, but is considered as payment that should be returned to the homebuyer and is not included in the repayment of other debts of the developer. This is crucial for homebuyers: it ensures that their right to return the house and refund is prioritized over the developer's creditors.


 

Situation 2: Inability to deliver the house, contract termination, and homebuyer requests priority compensation from the proceeds: If the executing court seizes and auctions the unsold buildings and land use rights under the name of the developer, and the homebuyer who meets the conditions of items 1 and 3 of Article 11 (that is, signed a contract and the house is for self-occupancy) has terminated the contract due to the inability to deliver the house, the homebuyer can file an objection lawsuit requesting that a corresponding share be allocated and returned to them from the proceeds from the disposal of the building and land. In simple terms, it is to allow the homebuyer to retrieve their paid house purchase payment from the proceeds of the auction of the developer's assets (because the house cannot be obtained, only the money can be returned). The latter part of this article clearly states that the court should support such a request.


 

Both scenarios essentially protect the homebuyer's right to a refund. The difference is that in the first scenario, the money is still in the escrow account, directly excluding the freeze and returning it to the homebuyer; in the second scenario, the value of the house is reflected through the sale, and it needs to be paid to the homebuyer from the proceeds of the sale. These two provisions fill the gaps in previous judicial interpretations and provide protection for the interests of homebuyers who return their homes. The second scenario, in particular, is very realistic: if a real estate project is unfinished, the house can never be delivered, and a large number of homebuyers terminate the contract and demand payment. When the developer is insolvent, the proceeds from the sale of its remaining assets are often insufficient to repay all debts. Before this provision, homebuyers may be forced to participate in the distribution as ordinary creditors, often receiving little money. This provision grants priority repayment rights to qualified homebuyers (contracts signed before seizure, for self-occupation), positioning them as secured creditors, greatly enhancing the strength of refund protection. It should be noted that the second paragraph of this article mentions that homebuyers must meet the provisions of the first item and the third item of the first paragraph of the preceding article, namely, that a legal sales contract was signed before the seizure and the house is for family residential needs. These conditions are consistent with the requirements of Article 11. This is to prevent developers and non-self-occupied investors from colluding to obtain priority rights. Similarly, the contract has been terminated is also a prerequisite to ensure that the buying and selling relationship between the homebuyer and the developer ends, and the homebuyer is requesting a refund rather than a house, so as to avoid overlapping rights.


 

Article 13: Exclusion of Enforcement for Debt Repayment by General Real Estate Purchasers


 

Original text of the article: "When the People's Court enforces compulsory execution on real estate registered under the name of the person subject to execution, and a third party claims to be the buyer of the real estate and files a lawsuit for objection to execution, requesting the exclusion of the compulsory execution of the priority right to payment of construction project funds, mortgage rights, and general monetary claims, and if the third party has signed a legally valid written sales contract with the person subject to execution and the payment delivered to the execution court before the conclusion of the first-instance court debate is sufficient to repay the corresponding principal claim on behalf of the person subject to execution, the People's Court shall support it."


 

If the third party who meets the requirements of the preceding paragraph files a lawsuit requesting the mortgagee to handle the cancellation registration of the mortgage right on a case-by-case basis, the People's Court shall support it.


 

If the People's Court rules that execution is not allowed according to the first paragraph of this article, the applicant for execution may apply to have the payment delivered by the third party in accordance with the first paragraph of this article replace the person subject to execution in repaying the corresponding debt.


 

If the People's Court dismisses the lawsuit of the third party, the payment delivered to the execution shall be returned promptly."


 

Interpretation and analysis: This article stipulates a system for general real estate buyers to repay debts to retain the subject matter and exclude execution. The key points are as follows:

Applicable scenarios: The subject of execution is real estate registered under the name of the person subject to execution (not limited to commercial housing, it can be any property or land, etc.), and the third party claims to be the buyer of the real estate, meaning that they have a sales contract relationship with the person subject to execution but have not yet obtained the property right. This is similar to the situation in Article 14, but this article targets the special situation where the buyer is willing and able to repay the debt, so it can exclude not only the execution of ordinary claims, but also the execution of priority claims such as the priority right to construction project funds and mortgage rights.


 

Conditions for supporting the exclusion of execution (must be met simultaneously):


(1) Prior legal sales contract: The third party and the person subject to execution have previously signed a legally valid written sales contract, establishing a buying and selling relationship (there is no requirement for the time to be before the seizure, but usually the contract is before the seizure, otherwise it is difficult to say that it is a bona fide buyer).


(2) Compensation for the principal claim: The third party must deliver a sum of money sufficient to repay the corresponding principal claim to the execution court before the conclusion of the first-instance court debate. The "principal claim" here refers to the claim on which the applicant for execution is based in the execution, or the claim secured by the mortgage right, etc. In short, the buyer pays a sum of money to repay the debt owed to the applicant for execution on behalf of the person subject to execution. This money is handed over to the execution court for safekeeping, waiting for subsequent handling according to the judgment. If the buyer can do this, it shows his ability and willingness to perform the contract, and also provides a solution for debt repayment.


 

As long as these two points are met, the court can support the third party in excluding the execution of the real estate, including mortgage execution and construction fund priority execution. Compared with Article 14, which only targets general claims, this article grants the buyer the right to resist secured claims when repaying debts, which undoubtedly greatly protects the buyer's interests in purchasing a house.


 

Mortgage cancellation and payment replacement repayment: When the third party meets the conditions and wins the lawsuit:

If there is a mortgage on the real estate, the third party can request the court to order the mortgagee to handle the cancellation registration of the mortgage right on a case-by-case basis (for the property). The court should support this request, so that the buyer can obtain a mortgage-free property right. This ensures that the property right of the house obtained by the buyer is clean and free of mortgage burden. At the same time, since the judgment is that the real estate cannot be executed, how is the debt of the applicant for execution against the real estate realized? Paragraph 3 of this article stipulates that the applicant for execution may apply to have the payment delivered by the third party replace the person subject to execution in repaying the corresponding debt. In other words, the creditor receives the money paid by the buyer instead and gives up the execution of the property, which is equivalent to the debt being repaid. This is actually a natural result: the buyer "buys back the house with money", the creditor takes the money and leaves, and the house belongs to the buyer.


 

From a legal point of view, this reflects the principle of respecting contracts and supporting continued performance: in real estate transactions, if the buyer is willing to perform the contract and can eliminate obstacles to other property rights (such as mortgages), then the performance of the sales contract should be prioritized to achieve the efficiency of property transfer and the maintenance of contract validity. This is also in line with the spirit of the Civil Code, which encourages debt repayment and protects bona fide transactions.


 

It can be seen that this article takes into account the interests of all parties: the creditor is compensated according to the original contract, the buyer gets the property, and the debt of the person subject to execution is reduced. This is actually a win-win situation. In the current context of "difficulty in execution", such provisions also help to resolve disputes and avoid the many uncertainties of execution auctions.


 

Article 14: Exclusion of Enforcement of General Creditors by General Real Estate Purchasers


 

Original text of the article: "When the People's Court enforces compulsory execution on real estate registered under the name of the person subject to execution, and a third party claims to be the buyer of the real estate and files a lawsuit for objection to execution, requesting the exclusion of the compulsory execution of general monetary claims, and can prove that its claim meets the following conditions at the same time, the People's Court shall support it:

(1) Before the seizure, the third party has signed a legally valid written sales contract with the person subject to execution;

(2) Before the seizure, the third party has paid the full price, or has paid part of the price as agreed in the contract and has paid the remaining price to the people's court for execution before the conclusion of the first-instance court debate;

(3) Before the seizure, the third party has legally possessed the real estate;

(4) The transfer registration of the ownership of the real estate has not been handled due to reasons not attributable to the third party.


 

If the people's court dismisses the lawsuit of the third party, the remaining payment made by the third party for execution shall be returned in time.


 

Interpretation and analysis: This article is a protection rule for buyers (i.e., homebuyers or buyers) in general real estate transactions, targeting the situation of excluding the execution of ordinary claims. It continues and refines the standard of "buyer objection" in previous judicial practice. Its conditions are basically consistent with the previous provisions of Article 28 of the Supreme People's Court's "Several Provisions on Handling Cases of Objection to Execution and Review", but it is more clear and specific. The key points are as follows:

Applicable scenarios: The subject matter of execution is real estate under the name of the debtor, and the applicant's claim is a general monetary claim. A third party claims that they had already purchased the real estate but had not yet transferred the title, and now requests the exclusion of execution against it. In simpler terms, this is a typical case of "second-hand house sale without title transfer, seller owes debt and house is seized, buyer prevents execution."


 

Conditions to support the exclusion of execution (all must be met):


 

Prior contract: Before the seizure, the third party (buyer) had signed a legally valid written sales contract with the debtor (seller). - The prior establishment of the contract is the basis for protecting the buyer, proving that their right source is legitimate and precedes the enforcement measures.


 

Payment of price: Before the seizure, the third party has paid the full price; if the full payment was not made before the seizure, according to the contract, a partial payment has been made and the remaining amount is paid to the court's execution account after the seizure and before the conclusion of the first instance debate. - Similar to Article 13, it encourages buyers to make up the balance during the lawsuit. This prevents some buyers from only signing contracts without paying but wanting to protect the property. Only buyers who have truly fulfilled their payment obligations deserve protection.


 

Actual possession: Before the seizure, the third party has legally possessed the real estate. - Possession is a key condition here, indicating that the buyer has actually controlled and used the property. The fact of possession is usually regarded as a sign that the transaction is nearing completion and the seller has delivered the subject matter. It can effectively prevent forged transactions, because if there is only a contract and payment, but the house is still possessed by the seller, the authenticity of the transaction is questionable; while the buyer has already occupied and moved in, it basically rules out the possibility of disguise (of course, not absolutely, but it increases credibility).


 

Title transfer not completed due to reasons other than the buyer: The failure to transfer the property title is not due to the buyer's own reasons. - This means that the buyer has not intentionally delayed or negligently caused the failure to transfer the title, but there are objective reasons or reasons on the seller's side. This condition prevents buyers from delaying the transfer of title for dishonest purposes, in order to use the unchanged nominal ownership to transfer risks. Only bona fide buyers who are unable to transfer the title due to objective reasons can be protected.


 

If the above conditions are met, the court should rule in favor of the third party's objection and not execute the real estate to repay the debt owed by the debtor. In this way, the buyer will protect the property and will not be implicated by the seller's other debts.


 

Return of balance: If the third party's request is supported, the remaining payment made to the execution after the seizure will usually be transferred to the seller's creditor (there is no issue of return, because the execution is stopped, and the balance will be used for transfer or repayment to the seller). However, if the third party ultimately loses the lawsuit, the remaining payment made to the execution should be promptly returned to them (similar to the provisions of Articles 11 and 13).


 

It is worth noting that this article protects against general debt execution. If mortgages, priorities, etc., are involved, Article 13 or Article 17 should be used to resolve them (i.e., the buyer needs to repay the secured debt). Therefore, this article is mostly applicable to situations where the seller owes ordinary debts or is subject to ordinary effective judgment execution. In unsecured second-hand house transactions, this article is the main remedy for the buyer.


 

Article 15: Exclusion of Enforcement of Real Estate Debt Offset Agreements (Preventing False Debt Offset)


 

Original text: "When the People's Court enforces compulsory execution on real estate registered under the name of the debtor, and a third party files a lawsuit for objection to execution on the grounds that the debtor has compensated the third party with the real estate, requesting the exclusion of compulsory execution of general monetary claims, and can prove that its claim meets the following conditions, the People's Court shall support it:

(1) There is a real debtor-creditor relationship between the third party and the debtor, and the debt repayment period has expired, and the third party and the debtor have signed a legally valid agreement to compensate the debt with real estate before the seizure;

(2) There is evidence to prove that the debt compensation amount is basically equivalent to the actual value of the subject matter of execution at the time of debt compensation;

(3) The third party has legally possessed the real estate before the seizure;

(4) The transfer of ownership of the real estate has not been registered due to reasons other than the third party itself."


 

Interpretation and analysis: This article establishes rules for objections to execution in the case of real estate debt compensation. That is, the third party claims that the debtor owes them money, and both parties agree to compensate the debt with the house to the third party, thus requesting the exclusion of execution of the house by other creditors. Since the "compensation with house" agreement may be a real repayment or may be misused for malicious collusion to transfer property, this article sets strict conditions to achieve a balance between protecting real debt compensation and preventing false debt compensation. The conditions include:

Real debt and prior agreement: The third party must have a real and valid debtor-creditor relationship with the debtor, and the debt has matured and remains unpaid, and both parties have signed a legally valid real estate debt compensation agreement before the seizure. This shows that the debt compensation has an economic basis (there is indeed a debt), it is not created out of nothing, and the debt compensation agreement was concluded before the property was seized.


 

Debt compensation amount is equivalent to the value of the property: There needs to be evidence to prove that the debt compensation amount determined in the debt compensation agreement is basically equivalent to the actual market price of the real estate at the time of debt compensation. This is a very crucial point - if the so-called debt compensation only uses a small debt to exchange for a large property, it is obviously unreasonable and may be malicious transfer of property; conversely, if the debt compensation amount is close to the market value of the property, the transaction is fair and credible. This condition effectively screens out those "small to big" false debt compensation situations. The special emphasis on examining the authenticity of the debt compensation claim, the authenticity of the debt compensation intention, and the reasonableness of the debt compensation price refers to this. In practice, it often requires an assessment report, market price comparison, etc., to determine whether the value is equivalent.


 

Buyer possesses the property: Similar to Article 14, it requires that the third party has legally possessed the real estate before the seizure. Possession means that the debt compensation agreement has been partially performed (house delivery), increasing the credibility of the agreement.


 

Failure to transfer title is not the buyer's fault: The failure to transfer the title is not caused by the third party itself. As stated in Article 14, this is judged by the situations listed in Article 16, such as whether an application for transfer has been made, whether there are objective obstacles, etc.


 

If all the above conditions are met, the court should determine that the third party's debt compensation right to the property takes precedence over the general creditors of the debtor, and support its exclusion of general debt execution. This means that the property cannot be auctioned off by other creditors to repay debts, but should belong to the third party involved in the debt compensation.


 

Overall, Article 15 allows the performance and protection of real in-kind debt compensation agreements, while simultaneously curbing false debt compensation through strict conditions, balancing the needs of execution relief and combating debt evasion. For debtors and closely related creditors, in-kind debt compensation is no longer a safe haven for malicious avoidance of execution.


 

Article 16: Determination of Circumstances Where Transfer Has Not Occurred "Not Due to the Outsider's Own Reasons"


 

Original text: "Before the People's Court seizes, if one of the following situations is met, it can be determined as 'not due to reasons of the third party itself' in Articles 14 and 15 of this interpretation:

(1) The third party and the debtor have jointly submitted an application for transfer of ownership registration to the real estate registration agency;

(2) The third party has requested the judgment debtor to perform contractual obligations such as handling the ownership transfer registration procedures, or has filed a lawsuit or applied for arbitration with the judgment debtor due to the handling of the ownership transfer registration;

(3) The newly built commercial housing does not yet meet the conditions for initial registration;

(4) The online signing and filing of the sales contract has been completed;

(5) The judgment debtor, etc., notified the third party to handle the real estate ownership transfer registration, but the third party did not fail to handle it;

(6) Other situations not due to reasons attributable to the third party.


 

Interpretation and Analysis: This clause provides an illustrative explanation of the requirement of "failure to handle the transfer for reasons not attributable to the third party" appearing in Articles 14 and 15. It enumerates several situations that meet the requirements before the seizure, and it can be determined that the failure of the buyer to transfer is not caused by their subjective reasons, but rather has objective and justifiable reasons, thus satisfying the conditions of Articles 14 and 15. Specific situations include:

Both parties have jointly applied for transfer: The third party and the judgment debtor have jointly submitted an application for transfer to the real estate registration agency. This shows that both parties to the sale and purchase have actively fulfilled their obligations to transfer, and the failure to transfer may only be due to the fact that the registration agency has not yet completed the procedures.


 

The buyer has urged performance or filed a lawsuit: The third party has requested the judgment debtor to perform the transfer obligation, or has a dispute with the judgment debtor over the transfer issue and has resorted to court or arbitration for resolution. This shows that the buyer did not sit idly by and fail to transfer, but actively pursued the seller's responsibility, either urging the transfer or resolving it through litigation, thus delaying the transfer.


 

Newly built commercial housing does not meet the registration conditions: For newly built commercial housing, the developer may not have completed the initial registration or building completion acceptance, etc., objectively resulting in the lack of conditions for initial registration, and the buyer cannot transfer. This is obviously not something the buyer can control.


 

The sales contract has been online signed and filed: The sales contract has been online signed and filed with the real estate management department. Online signing and filing means that the official has recognized the transaction, and only the property rights registration needs to be handled. If the transfer has not yet been completed, it is usually due to factors in the registration procedures, not the buyer's reasons. Moreover, online signing often locks the house, preventing the seller from disposing of it at will, which is also a manifestation of the buyer fulfilling their preventive obligations.


 

The seller notified the transfer and the buyer did not delay: The judgment debtor, etc. (seller) notified the third party to handle the transfer, but the third party did not fail to handle it. That is to say, after receiving the notice that the transfer can be made, the buyer actively cooperated and did not passively delay. If the seller asks you to transfer and you don't go, that is your own reason; this clause refers to the opposite situation, that is, the buyer did not delay.


 

Other similar objective situations: Any other reasons attributable to reasons other than the buyer that lead to the failure to transfer can be included in the catch-all clause. For example, temporary changes in government purchase restriction policies, system failures in the registration department, etc., these are not things that the buyer can control.


 

If any of the above is met, it can be determined that the buyer's failure to transfer is not their fault, thus satisfying the requirements of Article 14(4) and Article 15(4).


 

Practical Significance: These situations almost cover the common objective reasons for failure to transfer, and are highly instructive. In the past, the judgment standards for "reasons not attributable to oneself" varied among different courts. The Interpretation unifies the judgment standard by positively listing them. For buyers, as long as they can prove that they meet one of them, the uncertainty in this requirement is eliminated. Article 16 also puts forward requirements for the buyer's behavior—requiring them to maintain diligence and good faith in the transaction. If the buyer's own negligence leads to a delay in the handling of property rights, their defense will be weakened.


 

Article 17: Objection to Enforcement by Construction Contractors Using Housing to Offset Engineering Payments


 

Original text of the article: "When the People's Court enforces compulsory execution on real estate registered in the name of the judgment debtor's contractor, a third party claims that it has agreed with the judgment debtor to offset the engineering debt with real estate, and files a lawsuit for objection to execution, requesting the exclusion of the enforcement of the mortgage right and general monetary claims, and can prove that its claim meets the following conditions at the same time, the People's Court shall support it:

(1) Based on the provisions of Article 807 of the Civil Code, the third party exercised the priority right to payment of construction project funds before the seizure, and signed a legally valid agreement with the judgment debtor's contractor to offset the value of the real estate;

(2) There is evidence to prove that the amount of debt offset is basically equivalent to the actual value of the subject matter of execution at the time of debt offset.


 

If the third party sues to request the judgment debtor to handle the real estate ownership transfer registration procedures and meets the provisions of the preceding paragraph, the People's Court shall support it according to law.


 

Interpretation and Analysis: This article specifically regulates the situation where a construction contractor offsets engineering payments with housing. The third party here is usually the contractor of the construction project, and the judgment debtor is the contractor. The construction party legally enjoys the priority right to payment of engineering project funds for the developer's development project (Article 807 of the Civil Code). When the contractor owes engineering payments, the construction party can be preferentially compensated for the value of the project. This article is based on this statutory right, allowing the construction party and the contractor to reach an agreement to offset the engineering payments with the real estate in the project, and under certain conditions, exclude the execution of other creditors on the real estate. The conditions are:

Exercise priority rights in time and sign an offset agreement: The third party (construction party) must have exercised the priority right to payment of construction project funds in accordance with Article 807 of the Civil Code before the seizure, and signed a legally valid agreement with the contractor to offset the value of the real estate. Article 807 stipulates that if the construction party is not compensated within a certain period after the completion and settlement of the project, it can be preferentially compensated. This requires the construction party to claim its rights in time. The signing of the offset agreement indicates that the contractor agrees to offset the debt with the house. Completing these actions before the seizure shows that the construction party did not suddenly make an agreement after the asset seizure, but rather had a basis for its claim of rights.


 

The value of the offset property is equivalent to the debt: Similar to Article 15, evidence is needed to prove that the amount of debt in the offset agreement is basically equivalent to the actual value of the property at that time. This prevents the use of the name of engineering payments to obtain property far exceeding the value of the debt. This is also an important means of preventing fraud or benefit transfer. Usually, it is relatively easy to judge whether the amount of engineering payment debt and the market value of the property are close.


 

If these two points are met, the court should support the construction party's request and exclude the execution of the mortgage right and ordinary debt claims on the property. That is to say, even if the property has a mortgage from the bank, or other creditors of the developer want to execute, it cannot hinder the construction party from obtaining the property. The construction party's priority right to engineering payments is originally legally prior to the mortgage right (if claimed within the statutory time limit), this article implements this priority through the form of objection to execution, allowing the construction party to directly obtain the property as debt offset, without having to participate in auction distribution. In addition, if the construction party wins the lawsuit, it can naturally request the court to order the contractor to handle the property transfer registration, and the court should support it. In this way, the construction party can finally obtain the ownership of the property.


 

Practical Background: Construction companies often face the issue of developers delaying payment for completed projects. The law grants them priority in recovering project costs, allowing them to receive payment first from the auction of properties involved in the project. However, in practice, developers may offer existing or under-construction properties as debt repayment to the construction company, a more direct approach than the complex auction process. Previously, due to a lack of clear legal basis, if the construction company accepted the property and the developer's other creditors seized it, the construction company's rights might not be recognized. Article 17 of the Interpretation addresses this issue, confirming that the contractor's agreement to accept a reduced price as compensation is legally protected, provided it complies with Article 807 regarding timely assertion and fairness. This article is similar to Article 15 regarding "debt repayment with property," but focuses more on debt repayment in the context of the statutory priority rights of construction contractors, therefore not requiring the contractor to possess the property—note that this article does not list "possession" as a condition. This reflects special consideration for construction companies: they may be accepting under-construction properties as debt repayment, making "possession" impossible. Therefore, only the agreement and equivalent value are required. The construction company's lack of possession does not affect the protection, as its priority right has already been confirmed.


 

Limitations and Safeguards: The requirement to exercise priority rights and reach an agreement before seizure excludes situations where the developer only offers property to the construction company after being sued. If the developer signs an agreement only after being sued or seized by other creditors, it may be considered malicious debt evasion against other creditors. Agreements reached before seizure are credible and legally valid. The review of equivalent value is also crucial to prevent developers from transferring assets to closely related construction companies by inflating the amount of outstanding project payments. The Supreme Court's interpretation specifically advises courts to strictly examine the authenticity of the debt repayment claim and the reasonableness of the payment amount. In other words, judges will examine whether the project payment amount is genuine and not the result of collusion between the two parties to obtain property through false invoicing.


 

In summary, Article 17 strengthens the protection of the rights of construction contractors, maintains stability in the construction market, and prevents developers from maliciously delaying project payments. It also allows construction companies and developers to settle debts through non-cash means with judicial backing. This provides a solution to the problem of "difficulty in enforcing project payments." Of course, it requires construction companies to strictly follow legal procedures and not be negligent, otherwise they may lose priority protection.


 

Article 18: Protection of Objection to Enforcement of Confiscated and Compensated Property Rights


 

Original Text: "When the People's Court enforces compulsory execution on real estate registered under the name of the person subject to execution, and a third party files a lawsuit for objection to execution on the grounds that the real estate is used for property exchange in expropriation compensation, requesting the exclusion of the priority right of payment for construction projects, mortgage rights, and other claims for compulsory execution, and can prove that its claim meets the following conditions, the People's Court shall grant support:"

(1) Before the seizure, the third party has already signed an agreement of expropriation compensation with the housing expropriation department, housing expropriation implementation unit, etc., in accordance with the law;

(2) The location of the real estate used for expropriation compensation is clearly specified.


 

If the third party sues to request the judgment debtor to handle the real estate ownership transfer registration procedures and meets the provisions of the preceding paragraph, the People's Court shall support it according to law.


 

Interpretation and Analysis: This article aims to protect those who obtain replacement housing through housing expropriation (demolition) compensation, preventing their rightful resettlement housing from being executed by the creditors of the expropriating party. A common scenario: A developer undertakes an old city renovation project, the person subject to execution is the developer, and the third party is a resident whose property has been demolished. The developer promises resettlement housing to the resident ( property exchange ), but before the title of the resettlement housing is issued, the developer incurs debt, and the resettlement housing nominally registered under the developer's name is seized. The resident can use this article to prevent execution and ensure they receive the resettlement housing.


 

Conditions for Supporting the Exclusion of Execution:

Prior Signing of Expropriation Compensation Agreement: Before the seizure, the third party has already signed an expropriation compensation agreement with the housing expropriation authority or implementation unit (usually the government or a developer commissioned by the government). This agreement shows that the third party (the demolished resident) has the right to obtain resettlement housing in accordance with the law, and the time is locked before the seizure.


 

Clearly Specified Replacement Housing: The agreement clearly specifies the location and other specific information of the real estate used for property exchange. That is, the resettlement housing is not a general right, but a specific unit. Only by clearly pointing to a specific property can execution against that property be excluded; if only a house of the same area is agreed upon but not specified, it does not meet the conditions, because the unspecified property may be mixed with other properties of the developer, making it inconvenient for execution and protection.


 

If these two conditions are met, the court should support the third party and exclude compulsory execution against the real estate, including the exclusion of the priority right of payment for construction projects, mortgage rights, and other claims for execution. At the same time, if the third party requests the person subject to execution (developer) to transfer the title of the resettlement housing, the court should also support it.


 

Practical Significance: In government expropriation and demolition, the resettlement interests of the expropriated person are specially protected by law. Previous policies and cases have emphasized that demolition resettlement housing belongs to the expropriated person's property and should not be taken by the developer's creditors. This Interpretation clarifies this through judicial interpretation, further expanding the scope of protection, for example, even if there are mortgage holders on the developer's assets, they cannot oppose the demolition resettlement rights. As stated in the Supreme Court's press conference: "Property expropriated due to public interest needs, the civil rights of the expropriated person should be specially protected." This article reflects this idea.


 

Condition (2) requires the location of the resettlement housing to be clearly specified, which is mainly a technical issue: If the compensation agreement has already specified the specific room and building number, then that unit is equivalent to a specific item for the expropriated person, and the court can rule that it belongs to them and not be subject to execution. If the agreement has not yet specified a specific house, only stating that a house of the same area will be given in the future, then the third party can only claim compensation rights, and it is difficult to directly specify the property for protection during execution. Therefore, clarifying the resettlement housing as early as possible is a beneficial practice for the expropriated person in the expropriation process, and this also reminds the expropriation department: the resettlement rights should be made specific and substantive.


 

From a policy perspective, this article protects demolition resettlement housing to maintain public housing in public interest expropriation. If resettlement housing is also taken by creditors, it will undoubtedly cause social problems. The Supreme Court, through this interpretation, expresses its attitude: resettlement housing cannot be moved, even if creditors lose some, resettlement housing must be guaranteed for the expropriated person. This is consistent with the spirit of the "Expropriation Compensation Regulations" and other regulations.


 

Article 19: Protection of Objection to Enforcement by Purchasers with Pre-registration


 

Original Text: "When the People's Court enforces compulsory execution on real estate registered under the name of the person subject to execution, and a third party files a lawsuit for objection to execution on the grounds that a legally valid written sales contract has been signed with the person subject to execution before the seizure, and the payment has been made in accordance with the contract, and a legally valid pre-registration of real estate has been completed, requesting the suspension of disposal, and the facts are established, the People's Court shall grant support; if the conditions for property registration are met, and the third party requests the exclusion of compulsory execution, the People's Court shall grant support."


 

Interpretation and Analysis: This article focuses on the protection of the buyer under the pre-registration system. Pre-registration is a public notice of an "expectant right." According to Article 221 of the Civil Code, after the parties sign an agreement for the change of real estate property rights, they can apply for pre-registration to guarantee the future realization of property rights. During the existence and validity of the pre-registration, the disposal of the real estate without the consent of the pre-registered right holder does not have the effect of property rights. Article 19 incorporates this principle of property rights into the execution procedure.


 

Specifically:

Applicable Conditions: The third party (purchaser) needs to prove that before the seizure, they signed a legally valid house purchase contract with the debtor, paid the purchase price as agreed in the contract, and completed a legally valid pre-registration. These are the basic conditions for the establishment of pre-registration rights: genuine transaction, payment of price, completion of pre-registration, and continued validity.


 

Protection Scope: After meeting the above conditions: Request to Stop Disposal: If the real estate does not yet meet the conditions for property transfer (such as the house is not yet completed and delivered or has not yet met the registration conditions), the third party can at least request the court to stop the disposal of the property (i.e., suspend auction, sale, etc.). After the court reviews and confirms that the matter is established, it should support the request to stop the disposal and no longer dispose of the property. This is equivalent to acknowledging the effectiveness of pre-registration against execution: because the purchaser's pre-registration is prior, the execution disposal does not have property rights effect on it, so it should be suspended.


 

Request for Exclusion of Execution: If the real estate already meets the conditions for property registration (such as the house is completed and can be registered), the third party further requests the exclusion of forced execution against it, that is, to request the final confirmation that the house should be obtained by them, the court should also support it. At this time, a judgment will be made not to execute and allow the transfer to the third party, completing the final transfer of property rights.


 

In short, the purchaser with prior pre-registration enjoys priority protection of their rights during execution. First, prevent disposal, and when the conditions are ripe, completely exclude execution, allowing the purchaser to obtain the property rights.


 

Practical Significance: The pre-registration system guarantees the smooth implementation of real estate transactions. In the past, without pre-registration, if the purchaser signed a contract but did not transfer the property, and encountered execution, they could only rely on passive defense under Article 14. However, if the purchaser has pre-registered, then according to the principle of public notice and good faith of property rights, their expectant rights are binding on third parties. After the implementation of the Civil Code, the countervailing effect of pre-registration is clearer, and this article is the judicial confirmation and execution of this effect. In reality, this is particularly crucial for pre-sale projects of commercial housing: purchasers of pre-sale housing often pre-register first, and if the developer is executed by other creditors, pre-registration gives purchasers the confidence to claim their rights. The Supreme Court also points out that the purchase debt under pre-registration has certain property rights effect, while the application for execution of debt is only an ordinary debt, so the former should be given priority protection.


 

It can be seen that Article 19 improves the connection between execution procedures and the pre-announcement of property changes. By acknowledging the countervailing effect of pre-registration, it maximizes the protection of the expectant interests of bona fide purchasers from being damaged by later creditors. This is also conducive to improving transaction security and enhancing the confidence of homebuyers. For the court, after having explicit provisions, when encountering houses with pre-registration during execution, it should actively review and tend to suspend or reject disposal, avoiding illegal changes in property rights.


 

Article 20: Leasehold Rights and "No Rent" Enforcement Lawsuits


 

Original Text of the Article: "In the case of forced execution without rent auction, sale, etc., if a third party claims that they have signed a legally valid written lease contract with the debtor before the seizure and legally occupied and used the subject matter of execution, and have paid the rent as agreed in the contract, and files a suit for objection to execution, requesting the exclusion of the general creditor's forced execution without rent during the lease term, and the matter is established, the people's court should support it; if the third party meeting the above-mentioned conditions signed the lease contract and legally occupied and used the subject matter of execution before the establishment of the mortgage right, and requests the exclusion of the mortgage right's forced execution without rent during the lease term, the people's court should support it."


 

The applicant for execution may file a written objection to the forced execution in the case of auction, sale, etc., with rent. After the execution court makes an execution ruling, if the third party is dissatisfied, they may file a lawsuit with the execution court within fifteen days from the date of service of the ruling, and it shall be handled in accordance with the provisions of the preceding paragraph.


 

If the applicant for execution is dissatisfied with the execution ruling, they may file a lawsuit with the execution court within fifteen days from the date of service of the ruling, with the lessee and the debtor as defendants, requesting forced execution of the subject matter of execution without rent. The people's court, after hearing the case, shall handle it according to the following circumstances:

(1) If the lessee meets the provisions of paragraph 1 of this article, the lawsuit shall be dismissed;

(2) If the lessee does not meet the provisions of paragraph 1 of this article, the forced execution of the subject matter of execution without rent shall be permitted.


 

Interpretation and Analysis: Article 20 deals with the conflict between lease relationships and execution, especially regarding the remedies of lessees and creditors when "rent-free auction" (i.e., not subject to the original lease right, vacant delivery to the purchaser) is adopted during execution. It establishes a two-way litigation mechanism, protecting the continued lease rights of qualified lessees and allowing creditors to execute without being affected by the lease under specific circumstances. Main content:

Conditions for the lessee to file an objection suit: The lessee (third party) claims that their lease right should be protected, and needs to prove: ① Before the seizure, a legally valid written lease contract was signed with the debtor; ② Before the seizure, the subject matter was legally occupied and used (i.e., actually leased, moved in, or used); ③ Rent has been paid as agreed in the contract. This basically corresponds to the lessee protection conditions in the principle of "lease not broken by sale": lease first, rent payment, actual possession.


 

Execution against ordinary debts: During the lease term, the lessee may request the exclusion of "rent-free" execution against general debts, and the court should support it. That is, execution should consider the existence of the lease and should not ignore the lease and forcibly evict the lessee; the purchaser needs to continue to perform the lease until it expires.


 

Execution against mortgage rights: If the above-mentioned lease is established and the occupation and use are both prior to the establishment of the mortgage right (the lease is before the mortgage), the lessee may also request the exclusion of rent-free execution of the mortgage right during the lease term, and the court should also support it. This is linked to the exception regarding mortgages in the Property Law's "lease not broken by sale": leases made after the establishment of the mortgage right are not protected, while those made before are protected, and the new buyer must also continue the lease.


 

In other words, if the lessee meets the conditions, they have the right to continue to occupy and use the property during the lease term, and even if the property is executed and sold, the new buyer must wait until the lease expires before vacating the property. This protects the stable rights and interests of the lessee, especially in cases where the lease is prior to the mortgage.


 

Objection of the applicant for execution to "rent-included" execution: Sometimes, the execution court will decide to auction with rent. If the applicant for execution disagrees with the rent-included sale, because it may affect the transaction price, they can file a written objection, requesting the court to change to a rent-free sale. In this case, if the execution court still rules to execute in the original manner, if the lessee is dissatisfied with the execution ruling, they can file a lawsuit within 15 days, and the case will be heard according to the aforementioned standards. In fact, it is the lessee filing an objection suit, and the court will judge whether to protect their lease right based on whether they meet the conditions of paragraph 1. If the applicant for execution is dissatisfied with the result of the execution ruling (e.g., the court maintains rent-included execution), they can also sue the lessee and the debtor within 15 days, requesting rent-free execution. This is equivalent to the creditor actively filing a lawsuit to deprive the lease of its binding force.

Whether the lessee sues or the applicant for execution sues, the final court judgment will be based on the conditions of paragraph 1: If the lessee meets the lease protection conditions, the request for rent-free execution will be rejected, i.e., the lease will be maintained, and the execution must include rent; if the lessee does not meet the conditions, rent-free execution will be permitted. That is, the lease is not protected, and the lessee can be evicted, and the property can be auctioned vacant.


 

This two-way litigation design provides two avenues for entering litigation in rental disputes: whether the tenant initiates an objection lawsuit or the creditor initiates a lawsuit, it is ultimately resolved through a unified standard by the court. This avoids potential disputes from unilateral decisions in the execution process, instead allowing the substantive judgment to determine the validity of the lease, preventing disputes among the parties.


 

It is evident that Article 20, through substantive standards and litigation procedures, properly resolves lease conflicts during execution: leases that meet the conditions are not broken, otherwise they can be broken. This both maintains transaction stability and ensures execution efficiency and debt recovery. It provides clear expectations for participants in the rental and financial markets.


 

Article 21: Legal Liability for False Litigation Hindering Enforcement


 

Original text: "If an outsider colludes with the judgment debtor or judgment creditor in bad faith, forging evidence, or unilaterally fabricating basic facts of the case to obstruct lawful execution through an execution objection lawsuit, the people's court shall dismiss the lawsuit and impose a fine or detention according to the severity of the circumstances; if a criminal offense is suspected, the people's court shall transfer the criminal clues to the public security organs.


 

Litigation agents, witnesses, appraisers, and other litigation participants shall be subject to the provisions of the preceding paragraph.


 

If an outsider, etc., makes the execution subject unexecutable or reduces its value, causing losses to the judgment creditor through false litigation, etc., compensation shall be made according to law.


 

Interpretation and analysis: This article is an important clause in the "Interpretation" that clearly combats false litigation and maintains the order of execution. The content is divided into three layers:

Civil sanctions: If an outsider colludes with the judgment debtor or judgment creditor in bad faith, and files a false execution objection lawsuit by forging evidence or fabricating facts, with the purpose of obstructing normal execution, the court shall dismiss the lawsuit and impose a fine or judicial detention according to the severity of the circumstances. This is the power granted to the court by the Civil Procedure Law and judicial interpretation to punish the abuse of litigation. In the field of execution objections, due to the high incidence of false litigation, clearly stating that judges have the power to impose penalties in addition to judgments has a deterrent effect. The severity of the circumstances can be judged based on the degree of forgery and the extent of the impact, with a maximum fine or detention of 15 days.


 

Criminal referral: If the above-mentioned acts constitute a crime (the Criminal Law already has clauses such as "obstruction of testimony" and "false litigation"), the court must transfer the clues to the public security organs for criminal prosecution. In recent years, the amendment to the Criminal Law has added the "false litigation" crime, which may result in imprisonment for those who collude to fabricate civil lawsuits and seek illegal gains. Emphasizing referral through this article shows that serious cases will be investigated to the end.

Civil liability for compensation: If an outsider, etc., makes the execution subject unexecutable or reduces its value through false litigation, causing losses to the judgment creditor, compensation shall be made according to law. This is a way to pursue civil compensation. For example, due to false objections, execution is suspended for many years, property depreciates or is lost, and the creditor's interests are damaged, the outsider, etc., should compensate for the difference in losses. The "outsider, etc." here should include one or more colluding parties; regardless of whether it is an outsider, judgment debtor, or judgment creditor, as long as they engage in false litigation causing losses, they must compensate.


 

This article reflects the Supreme Court's zero-tolerance attitude towards false litigation. As the release notes point out: by strictly examining the authenticity of sales contracts, payments, claims, and the reasonableness of debt repayment prices, actively preventing false litigation, and at the same time specifically stipulating the legal liabilities for malicious collusion, forging evidence, and fabricating facts, all parties are bound by this. This article is a specific provision that strictly holds accountable false litigation that obstructs execution.


 

Article 22: Handling of Objections to Enforcement Filed by the Applicant for Enforcement


 

Original text: "If the judgment creditor files an execution objection lawsuit in accordance with the provisions of Article 238 of the Civil Procedure Law, the relevant provisions of this Interpretation shall be applied by reference."


 

Interpretation and analysis: According to Article 238 of the Civil Procedure Law and relevant judicial interpretations, the judgment creditor may also file an execution objection lawsuit under specific circumstances. For example, when the executing court upholds the execution objection of an outsider, if the judgment creditor is dissatisfied, they can sue the outsider and the judgment debtor to request confirmation of the executability of the subject matter. This is essentially a type of execution objection lawsuit, except that the plaintiff is the judgment creditor, standing in a position opposite to the outsider.


 

Such objection lawsuits filed by the judgment creditor in accordance with the law shall also be handled in accordance with the relevant provisions of this Interpretation. In other words, the execution objection lawsuits filed by the judgment creditor shall apply the same rules and conditions as those filed by outsiders in terms of trial standards.


 

Article 23: Effective Date


 

Original text: "This Interpretation shall come into force on July 24, 2025."


 

Interpretation and analysis: This article clarifies the effective date of this judicial interpretation. Regarding the scope of application, according to the general principles of the application of judicial interpretations: execution objection lawsuits newly accepted after the implementation shall apply this Interpretation; cases already accepted but not yet concluded before the implementation, if this Interpretation has new provisions that are beneficial to resolving disputes, they can be used as a reference for judgment. Cases that have already been finally adjudicated before the implementation are generally not retroactively applicable, unless they can be cited as a reference in the retrial procedure.


 

Conclusion


 

The Supreme People's Court's Interpretation on the Application of Laws in Hearing Execution Objection Lawsuits systematically sorts out and improves the procedural and substantive rules of execution objection lawsuits. From determining the court of jurisdiction and combining related requests, to the conditions for protecting various typical substantive rights, and to severely cracking down on false litigation, the content is comprehensive and targeted. The promulgation of this interpretation will elevate the judicial experience of execution objection lawsuits formed over the years into unified norms, helping to protect the rights of real right holders substantively and regulate the order of execution procedurally. From a practical perspective, this interpretation provides clear guidance for handling cases, and when handling cases involving execution objections, it should be used to carefully analyze the case, collect evidence, and formulate strategies. Only by fully understanding and correctly applying these new regulations can we effectively protect our legitimate rights and interests, while cooperating with the court to combat malicious debt evasion and safeguard judicial authority.

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