Perspective | A Review and Analysis of Relevant Judicial Views on Third-Party Enforcement Objections in "Buying Property Under Another's Name" Cases

Buying a house under another person's name refers to the act where the actual investor (the "borrower") purchases a property using someone else's (the "nominee") name, with the property ownership registered under the nominee's name. As long as this practice does not violate any mandatory provisions of laws or administrative regulations, it is considered a valid civil legal act. However, China adopts the registration-based system for changes in real property rights; therefore, from the perspective of property right publicity, the house registered under the nominee's name should legally be recognized as the nominee's property. When the nominee becomes the subject of enforcement due to debt disputes, their creditors may, pursuant to Article 2 of the "Provisions of the Supreme People's Court on Seizure, Detention, and Freezing of Property in Civil Enforcement by People's Courts (Revised in 2020)," request the court to impose seizure measures on the property registered under the nominee's name. At this point, a conflict arises between the nominee's creditor's enforcement rights and the borrower's actual ownership rights over the property. Typically, when the court proceeds with enforcement actions on the property, the borrower, as an outsider involved in the case, will file an objection lawsuit against the enforcement proceedings.

1. Can an objection filed by a celebrity prevent the court from enforcing execution?

2. The court's criteria for reviewing the claimant's rights;

3. How should the person lending their name bear the burden of proof regarding the "nominee purchase" arrangement?

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Notably, Article 13 of the announcement soliciting public comments on the Supreme People's Court's "Interpretation (I) on Issues Concerning the Application of Law in Handling Cases Challenging Enforcement Actions," released on November 29, 2019 (a draft open for public input), reads: Beneficiary with Anonymous Rights [The handling of the enforcement objection lawsuit includes two corresponding solutions:]

方案 one: In the enforcement of monetary claims, if a people's court enforces property registered under the name of the judgment debtor, and a third party files an objection lawsuit against the enforcement based on the following grounds, requesting that the compulsory enforcement be excluded, the people's court shall not grant such request: (1) The third party has borrowed the judgment debtor's name to purchase real estate or motor vehicles, yet they are actually the rightful owner of the said real estate or motor vehicles.

Option 2: In the enforcement of monetary claims, if the people's court enforces property registered under the judgment debtor's name, and a third party files an objection lawsuit against the enforcement based on the following grounds—requesting that the enforcement be excluded—the court shall grant the request if the claim is verified as true, does not violate mandatory provisions of laws or administrative regulations, and is also consistent with public order and good morals. Specifically, this applies when the third party has borrowed the judgment debtor's name to purchase real estate or vehicles (e.g., automobiles), thereby establishing themselves as the actual rightful owner of the property or vehicle in question.

In the practical field, there are also two different perspectives on this issue:

The first viewpoint argues that, based on the principles of statutory property rights and registration effectiveness, the publicity and credibility effects aimed at safeguarding transaction security, the fact that nominee arrangements fail to meet the conditions outlined in Article 28 of the "Provisions on Enforcement Objections and Review," and the nominee's mere entitlement to a general creditor's right—which inherently cannot take precedence over an enforcement lien—the nominee's claim cannot be exempted from compulsory execution.

This viewpoint argues: First, according to Articles 28 and 209 of the Civil Code of the People's Republic of China, China adheres to the strict principles of statutory real property rights and registration-based effectiveness. The establishment and transfer of real property rights only become effective upon lawful registration. Since the nominee has failed to complete the registration procedures, they do not enjoy any real property rights. Second, from the perspective of the appearance doctrine, real estate registration carries the legal effect of public notice and trustworthiness, which serves as a crucial foundation for safeguarding the security of market transactions and protecting the legitimate reliance interests of third parties. Supporting the nominee’s claim would undermine the very value of this system. Third, the scenario of purchasing a property under another person’s name does not meet the conditions set forth in Article 28 of the Provisions on Execution Objections and Review, particularly the requirement in paragraph 4—that "the transfer has not been completed due to reasons unrelated to the buyer." This is because the act of registering the property under another’s name is itself an active choice made by the nominee, thus bearing attributable responsibility. Finally, the nominee holds only a general creditor’s right against the registered owner based on their contractual agreement. In execution proceedings, such general claims should be satisfied in accordance with the order of seizure, rather than enjoying priority over other creditors’ enforcement actions. Therefore, in cases involving third-party objections to enforcement, the nominee’s creditor’s rights typically cannot preclude compulsory execution.

Reference Case 1: Supreme People's Court (2024) Sup. Ct. Civ. Shen No. 5649 (Excerpt)

The central issue in this case is whether Cui Moumou and Wang Moumou hold civil rights over the property in question that are sufficient to preclude enforcement proceedings. This court holds that, Cui Moumou and Wang Moumou do not have ownership rights over the property in question, and the existing evidence is insufficient to establish the fact that Cui Moumou and Wang Moumou purchased the property using Wang Mou's name as a mere borrower. Even if we take a step back and assume that Cui Moumou and Wang Moumou’s claim of borrowing Wang Mou’s name to buy the property is true, this would still not be enough to prevent enforcement actions. Moreover, any so-called nominee purchase relationship between Cui Moumou/Wang Moumou and Wang Mou is an internal arrangement strictly between the two parties who entered into the agreement; therefore, the rights held by the nominee remain within that private contractual framework. Credit claim right It also takes effect only between the borrower and the person whose name is borrowed; it neither directly causes a change in property rights nor confers any legal effect against third parties. Moreover, the borrower should be fully aware of the potential risks to their own rights that may arise from the discrepancy between the nominal buyer and the actual buyer resulting from the act of purchasing property under another’s name, and must bear the corresponding consequences on their own. Furthermore, the applicant for enforcement has incurred costs in terms of time and opportunity by initiating the compulsory enforcement procedure, thus giving rise to a legitimate expectation under procedural law. In comparison, the applicant's legitimate expectation should be given priority protection. Therefore, even if it is established that Cui某某 and Wang某某 borrowed Wang某某's name to purchase the property in question, this fact alone cannot serve as grounds to stay the compulsory enforcement.

Reference Case 2: Supreme People's Court (2020) Sup. Ct. Civ. Reexamination No. 328 (Excerpt)

Xu Moxin's nominal purchase contract, entered into to circumvent the state's housing purchase restrictions, does not automatically confer ownership of the property. Article 9 of the "Property Law of the People's Republic of China" stipulates: "The establishment, modification, transfer, and extinction of real property rights shall become effective upon lawful registration; without such registration, they shall have no effect, unless otherwise provided by law." Article 16 further clarifies: "The real estate registry serves as the basis for determining ownership and the content of property rights." According to the principles of property publicity and the effectiveness of real property right registration established by the aforementioned laws, unless otherwise specified by law, any changes in real property rights must undergo the prescribed registration procedures to produce their corresponding legal effects. Additionally, Article 2 of the "Interpretation by the Supreme People's Court on Several Issues Concerning the Application of the Property Law of the People's Republic of China (I)" states: "If a party provides evidence demonstrating that the records in the real estate registry do not accurately reflect the actual state of rights, and that the party is indeed the true owner of the real property right, their request to confirm their ownership should be granted." However, this provision of the judicial interpretation applies to cases where there is a discrepancy between the true rights holder—who has acquired rights through legitimate procedures—and the information recorded in the registry, such as when false documents are used to fraudulently obtain registration, errors occur during registration by registry officials, or property rights change due to non-legal acts but are not promptly corrected in the registry. In this case, Xu Moxin borrowed Zeng Moyou's name to sign the commodity housing sales contract and handle the relevant procedures, deliberately registering the property in Zeng Moyou's name. This does not fall under the category of registration errors as defined by the aforementioned laws.

Another viewpoint argues that the borrower is the actual financier behind the property purchase, as well as the true possessor and user of the house. Therefore, the borrower holds de facto ownership rights to the property. Consequently, the borrower—who enjoys these substantive rights—can resist enforcement actions by general creditors and prevent forced execution.

This viewpoint holds that the borrower is the actual financier behind the property purchase and also the true possessor and user of the house. Therefore, the borrower enjoys genuine ownership rights over the property. As a result, the borrower—who holds real rights—can effectively resist enforcement actions by general creditors and prevent forced execution. Moreover, in certain special circumstances—particularly when basic survival interests are at stake—for instance, if the property genuinely serves as the borrower and their family’s sole residence necessary for maintaining a minimum standard of living—this claim is justified under the legal principle that the right to survival takes precedence over ordinary creditor claims. Additionally, if the funds used to purchase the property include illegally obtained proceeds but predominantly consist of legitimate funds, it is essential to clearly distinguish between the ownership rights associated with each type of asset. In such cases, the portion of the property corresponding to the legitimate funds should be safeguarded. It is crucial that all determinations regarding these exceptional scenarios be grounded in robust, conclusive evidence, while strictly adhering to well-defined application criteria. This approach ensures both fairness and predictability in the enforcement of the law.

Reference Case 1: Fujian Provincial Higher People's Court (2024) Min Shen No. 264 (Excerpt)

Request for retrial: Yang Moumou argues in the application for retrial that the primary purpose of the third-party objection lawsuit is substantive review, not merely relying on property registration to determine ownership. Yang Moumou's civil rights over the property in question are sufficient to preclude Xiao Moumou's compulsory enforcement against the property.

(1) It is clear that Yang Moumou borrowed the name of Yang Moumou to purchase the property. 1. On March 27, 2016, Yang Moumou signed a "Property Ownership Agreement" with Yang Moumou, under which Yang Moumou used the China Construction Bank account ending in 8506 to pay two installments totaling RMB 20,000 and RMB 89,814 to a certain Limited Liability Company. On the same day, the company issued two invoices for the down payment. Additionally, all monthly mortgage payments for the property were consistently made by Yang Moumou, clearly demonstrating that Yang Moumou bore the actual financial responsibility for these payments. Furthermore, Yang Moumou paid the property management fees via WeChat, confirming that Yang Moumou has indeed taken possession and is actively managing the property. Therefore, Yang Moumou is the true investor behind the property and has already begun occupying and using it personally. Yang Moumou, by purchasing the property under another person's name, had the actual ownership registered in Yang Moumou's name. However, this does not mean that Yang Moumou has thereby lost the property rights associated with the property in question. According to Article 2 of the "Interpretation (I) on the Property Rights Chapter of the Civil Code of the People's Republic of China," which states: "If a party provides evidence proving that the records in the real estate registration book do not accurately reflect the true state of property rights, and that the party is indeed the rightful owner of the real property right, their request to have their property rights confirmed shall be supported." Yang Moumou should be the true owner of the property involved in the case. Moreover, Yang Moumou’s “buying a house under another person’s name” was not intended to circumvent mandatory provisions of laws or administrative regulations, nor the purchase restrictions imposed by the national or local governments—it also does not violate public order and good morals, and thus there is no ground for invalidity.

(2) Yang Moumou, based on actual investment, enjoys property rights related to the case. Expectation of Property Rights 。 The claim that Xiao Moumou seeks to enforce through compulsory execution is, at best, a mere ordinary creditor's right arising from a private loan. Moreover, Xiao Moumou did not develop any legitimate reliance interest in the property involved in the case. On the contrary, after meeting debtor Yang Moumou in 2013, Xiao Moumou allegedly began an extramarital affair with him, during which the two concealed the fact that Yang Moumou was already married and had fathered an illegitimate child—actions that clearly violate public order and good morals. Under these circumstances, Yang Moumou’s actual rights over the property in question clearly outweigh Xiao Moumou’s rights against him. Moreover, the property involved in the case was indeed not purchased with funds provided by Yang Moumou, and thus did not harm the actual interests of Xiao Moumou or Yang Moumou.

(III) Judgment Rules Related to Third-Party Objection Lawsuits Arising from "Buying a House Under Another Person's Name." Article 11 of the Guangdong Provincial High Court's "Answers on Several Key Issues in Reviewing and Handling Disputes Involving Enforcement Decisions," as well as recent cases such as Supreme People's Court Case No. 4 [2020] Min Shen and Supreme People's Court Case No. 3543 [2021] Min Shen, all uphold that "buying a house under another person's name"—provided it does not violate public interests—can shield properties against compulsory enforcement when no legitimate reliance interest has been established. This stance does not automatically dismiss the civil rights associated with "buying a house under another person's name." Therefore, we respectfully request a retrial in accordance with the law.

The retrial court held: After review, this court finds that Yang Moumou's application for retrial meets the conditions stipulated in Article 211, Item 6 of the "Civil Procedure Law of the People's Republic of China." In accordance with Article 215 and Article 217 of the "Civil Procedure Law of the People's Republic of China," as well as Paragraph 1 of Article 393 of the "Interpretation by the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China," the court rules as follows: 1. The case is hereby directed to be reheard by the Intermediate People's Court of Fuzhou City, Fujian Province; 2. During the retrial proceedings, execution of the original judgment shall be suspended.

Reference Case 2: Supreme People's Court (2020) Sup. Ct. Civ. App. No. 4

After review, this court finds that, first, according to the facts ascertained during the original trial, all original documents related to the purchase of the property in question—such as the contract and receipts—were kept by Mr. Sun. Moreover, Mr. Sun has been the actual occupant and user of the property. Combined with the explanation provided by the real estate agency involved in the transaction regarding the purchase process, as well as corroborating evidence like the "Agreement on Mutual Understanding Regarding Labor" signed between Mr. Sun and Mr. Qin Tao, these materials collectively establish that Mr. Sun purchased the property under Ms. Chen Yun's name. Second, Mr. Sun claims that he personally funded the purchase of the property, presenting relevant bank transfer records, account statements, and text message exchanges with Ms. Chen Yun. These documents clearly demonstrate that Mr. Sun paid both the down payment and the mortgage loan, and has been responsible for making monthly repayments ever since. Although Xinrui Company and Ms. Chen Yun dispute this claim, they have failed to provide any contradictory evidence or offer a plausible alternative explanation, which is insufficient to refute Mr. Sun's assertion. Finally, pursuant to Article 8, Paragraph 3 of the Interim Regulations on Real Estate Registration, Property ownership registration serves only to record the physical condition and ownership details of the real estate, carrying merely the presumptive effect of property rights rather than definitive proof of actual ownership. Given that existing evidence clearly demonstrates that Mr. Sun purchased the property in question under Ms. Chen Yun's name and personally paid the purchase price, the registered ownership status does not affect Mr. Sun’s actual entitlement to ownership of the property. Finally, regarding whether the rights Sun holds over the property in question are sufficient to prevent enforcement. Chen Yun is not the owner of the property; therefore, Xinerui Company’s application for enforcement based on its creditor-debtor relationship with Chen Yun cannot extend to the property in question.

In summary, Xinrui Company's application for retrial does not meet the criteria outlined in Article 200, Items 2 and 6, of the Civil Procedure Law of the People's Republic of China. In accordance with Article 204, Paragraph 1, of the Civil Procedure Law of the People's Republic of China, as well as Article 395, Paragraph 2, of the Supreme People's Court's Interpretation on the Application of the Civil Procedure Law of the People's Republic of China, this court rules as follows: Xin County Xinrui Microfinance Co., Ltd.'s application for retrial is hereby dismissed.

In the current review of third-party enforcement objection lawsuits involving "buying a house under another's name," whether the civil rights claimed by the third party regarding the subject of enforcement are sufficient to preclude compulsory execution can be examined in accordance with relevant provisions of judicial interpretations such as the "Provisions of the Supreme People's Court on Several Issues Concerning the Handling of Enforcement Objections and Review Cases by People's Courts." However, at the same time, we should not rigidly adhere solely to the rules outlined in these judicial interpretations. Even if the civil rights held by the third party fall outside the specific scenarios covered by the aforementioned judicial interpretations, it does not necessarily mean that such rights cannot still block compulsory enforcement. To determine whether the third party's claim for excluding compulsory execution is valid, the court must apply the comprehensive review principles stipulated in Article 24 of the "Regulations on Enforcement Objections and Review," which require examining the following aspects: (1) whether the third party is indeed the rightful owner; (2) whether the claimed right is lawful and genuine; and (3) whether this right is capable of overriding the enforcement action.

Therefore, in enforcement objection lawsuits involving property purchased under another person's name, the court needs to examine whether the borrower is indeed the true owner of the property, assess the legality and authenticity of the borrower's rights over the property, and determine whether these rights can override the court's compulsory execution. At the same time, the court must also consider, on a case-by-case basis, specific factors such as the transaction details and usage patterns of the property involved, as well as the potential impact of enforcing the property on the basic living security of third parties outside the litigation. Only after carefully evaluating all these elements can a comprehensive judgment be made.