Beijing lowers social insurance requirement for non-local homebuyers to one year; lawyer explains purchase qualification and contract performance risks.

"Recently, Beijing made an important adjustment to the housing purchase policy for non-Beijing households, reducing the social security or individual tax payment period requirement from five consecutive years to one year. This change quickly attracted market attention and was regarded as a mild and loosening signal for the regulation of the Beijing property market. For many families working and living in Beijing who have not yet obtained Beijing household registration, the lowering of the purchase threshold means more opportunities, but it also brings a series of new questions at the legal level: Can buyers who have signed a purchase contract but have not yet met the conditions of the old government benefit from it? Can the developer or seller refuse to perform on the grounds of a policy change? How should home buyers guard against legal risks after the new policy is implemented? This article will provide an in-depth analysis of the above issues from the perspective of lawyers, combined with relevant legal provisions and practical experience."

"I. Key Points of the New Deal: Loosening the Qualification Criteria for Non-Beijing Families to Purchase Houses"

"According to the latest notice issued by the Beijing Municipal Housing and Urban-Rural Development Commission and other departments, the proof of social security or personal tax payment period required for non-Beijing families to purchase commercial housing in Beijing has been adjusted from the past five consecutive years to one year. This means that as long as the buyer or his/her spouse has paid social security or individual taxes continuously in Beijing for one year or more when applying for home purchase qualification, the conditions for home purchase qualification can be met."

"This adjustment does not remove the purchase restriction, but lowers the threshold. Previously, the requirements for five consecutive years were at a high level nationwide. After this adjustment, the standards of Beijing and some hotspot cities converged, but they were still stricter than those of a few areas where purchase restrictions were completely lifted. Judging from the policy intention, this move is aimed at supporting the demand for reasonable housing purchases, especially those "new Beijingers" who have been working and living in Beijing for a long time but are unable to buy a house due to the social security period."

"To be clear, the New Deal does not automatically apply to all non-Beijing households. Home buyers still need to verify their eligibility through official channels and pay attention to the specific timing of policy enforcement. For example, issues such as the continuity of Social Security or individual tax payments, the validity of supplementary payments, and whether the New Deal is retroactive may affect the actual operation of home buyers."

"2. Homebuyers who have signed contracts but do not meet the conditions of the old policy: can they "unwind" with the new policy?"

"After the policy adjustment, a common practical question is: If the buyer is unable to complete the purchase qualification review under the old government due to insufficient social security years, but has signed a purchase contract with the seller or developer, can the contract be continued according to the new policy?"

"From a legal point of view, this involves the identification of barriers to contract performance. In a house purchase and sale contract, the qualification for the purchase of a house usually falls within the scope of the buyer's ability to perform the contract. If the Buyer qualifies for the purchase of the house due to a change in policy and there are no other invalid or revocable circumstances in the contract, the Buyer usually has the right to request continued performance. However, if the contract clearly stipulates that "the buyer guarantees that he is qualified to buy the house, otherwise he will be liable for breach of contract", the buyer's failure to meet the conditions at the time of signing the contract may have constituted a breach of contract, and the introduction of the New Deal does not exempt him from his liability for breach of contract."

"Therefore, it is recommended that homebuyers who have signed a contract but do not meet the qualifications first carefully review the relevant terms of the contract, especially the sections on homebuying eligibility guarantees and liability for breach of contract. At the same time, it should take the initiative to communicate with the seller or developer to negotiate whether to adjust the transaction arrangement in accordance with the New Deal. If the negotiation fails, you can seek the intervention of a lawyer to assess the effectiveness of the contract and the risk of breach of contract, and resolve it through legal means if necessary."

"III. Impact of the New Deal on the Performance of Stock Contracts and Default Disputes"

"The introduction of the new policy may also trigger a series of stock contract disputes. For example, some homebuyers chose to terminate their contracts under the old government due to ineligibility and paid a penalty or deposit. Now that the New Deal has been relaxed, they may want to resume the transaction or ask for a refund of what has been paid. Conversely, some sellers or developers may try to refuse to perform the contract due to fluctuating house prices or policy changes, citing buyer eligibility issues."

"In judicial practice, policy adjustments are often seen as a case of a change of circumstances or force majeure, but their application is subject to scrutiny. According to Article 533 of the Civil Code, after the establishment of the contract, the basic conditions of the contract have undergone major changes that cannot be foreseen by the parties at the time of concluding the contract and are not part of the commercial risk. If it is clearly unfair for one party to continue to perform the contract, the party adversely affected may renegotiate with the other party; if the negotiation fails, the party may request the people's court or arbitration institution to change or cancel the contract."

"However, whether the adjustment of the purchase qualification policy constitutes a "significant change" requires a comprehensive judgment based on factors such as the time of signing the contract, the extent of the policy adjustment, and the impact on the performance of the contract. For example, if the old government has been in place for many years at the time of signing the contract, and the buyer knows that its qualifications are not consistent with the contract, it may be deemed at its own risk. Therefore, parties involved in such disputes should consult professional lawyers as soon as possible in order to accurately assess the legal consequences and avoid the expansion of losses due to delays."

"IV. Advice from lawyers: How homebuyers can guard against legal risks under the New Deal"

"In the face of the New Deal on Housing Purchase, non-Beijing families should also be rational and prevent legal risks while rejoicing. Here are four suggestions to consider:"

"First, check your qualifications to avoid signing blindly. Before signing the housing purchase contract, be sure to check the social security or personal tax payment status through the official website or designated window of the Beijing Municipal Housing and Urban-Rural Development Commission to ensure compliance with the New Deal requirements. Never take the verbal promises of salespeople or intermediaries lightly."

"Second, carefully formulate the terms of the contract. For buyers who have not yet signed the contract, it is recommended to explicitly stipulate in the contract that "if the buyer loses the qualification to buy the house due to policy adjustments, both parties may terminate the contract and shall not be liable to each other for breach of contract" to reduce the uncertainty caused by policy changes."

"Third, preserve evidence and communicate in a timely manner. If you have signed the contract but are facing performance problems, you should properly keep the contract, payment vouchers, communication records and other materials. At the same time, take the initiative to negotiate with the other party and strive for an amicable solution. If the negotiation fails, the lawsuit or arbitration shall be considered."

"Fourth, pay attention to the details of the follow-up policy. The New Deal may be accompanied by specific operating rules, such as the qualification review process, the determination of supplementary social security, etc. Homebuyers should continue to pay attention to official releases, and can also obtain professional interpretations through legal counsel."

"The introduction of Beijing's new housing purchase policy reflects the policy's inclination towards reasonable housing needs, but legal risks and opportunities coexist. Whether you are a new homebuyer or an investor, you should act within the legal framework and seek the help of a professional lawyer if necessary. Guangdong Chiming Law Firm has been focusing on real estate legal affairs for a long time, and can provide homebuyers with full-process legal services from qualification review, contract review to dispute resolution, so as to help you settle down in Beijing with peace of mind."