Shanghai Homebuyer Pays RMB 10 Million for Property but Fails to Obtain Title Deed After Five Years—How Can Owners Protect Their Rights? Lawyers Explain Three Legal Remedies

Recently, dozens of homebuyers at a residential development in Shanghai experienced a home-purchasing nightmare: despite having paid millions of yuan for their properties, they have been unable to obtain real estate ownership certificates five years after delivery; some buyers even face the risk of losing both their money and their homes. After this incident came to light, it attracted widespread public attention. As lawyers specializing in real estate law, we note that such issues are not isolated cases but rather common legal risks in commercial housing transactions. This article analyzes, from a lawyer’s perspective, the legal avenues available to homebuyers seeking redress and provides preventive recommendations for prospective buyers.

I. Focus on the Incident: Why Is It So Difficult to Obtain Property Ownership Certificates for a Multi-Million-Yuan Home Purchase?

According to media reports, owners of a residential development in Shanghai entered into purchase contracts with the developer around 2019, paying either the full purchase price or a substantial down payment; however, they have yet to receive their real estate ownership certificates. The owners have repeatedly communicated with the developer, which has evaded responsibility by citing reasons such as “procedures still being processed” and “government approval delays.” Upon investigation, some owners discovered that the land-use rights for the involved project may have been mortgaged—or even subject to judicial seizure.

From a legal perspective, the buyer’s inability to obtain the property ownership certificate stems primarily from the developer’s failure to fulfill its obligation—under the Commodity Housing Purchase Contract—to process the title registration. Pursuant to Article 577 of the Civil Code, where a party fails to perform its contractual obligations or performs them in breach of the agreement, it shall bear liability for breach of contract, including continued performance, remedial measures, or compensation for losses. The developer’s prolonged delay in processing the title registration constitutes a breach of contract; accordingly, the owner is entitled to demand that the developer complete the registration within a specified period and compensate for losses.

More seriously, if the land or property has already been mortgaged or seized, the owner’s title registration will face fundamental obstacles. In such cases, not only will the owner be unable to obtain the property title certificate, but the property may also be subject to court-ordered enforcement due to the developer’s debt disputes, ultimately resulting in the buyer losing both money and property. This incident reflects the underlying contradiction between homebuyers’ fund security and property rights protection under the commercial residential pre-sale system.

II. Legal Analysis: Three Legal Avenues for Homeowners’ Rights Protection

Faced with a deadlock in obtaining property certificates, owners are not powerless. According to judicial practice, the following three avenues are available for reference:

**Path One: Claiming Liability for Breach of Contract and Seeking Compensation from the Developer**

Pursuant to Article 14 of the *Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Disputes over Commodity Housing Purchase Contracts*, where a developer fails to complete the registration of property ownership within the prescribed time limit, unless otherwise agreed by the parties, liquidated damages shall be calculated based on the total amount of the purchase price already paid, at the interest rate for overdue loans charged by financial institutions as stipulated by the People’s Bank of China. Homeowners may file a lawsuit against the developer to claim such liquidated damages and to compel the developer to fulfill its obligation to complete the property registration.

**Path Two: Apply for Enforcement or File a Bankruptcy Claim**

If the developer’s assets are seized due to poor management or involvement in litigation, the homebuyer may first apply to the court for compulsory enforcement against the property to secure priority repayment rights. Meanwhile, if the developer enters bankruptcy proceedings, the homebuyer must promptly file a claim for creditor rights and assert rights under Article 48 of the Enterprise Bankruptcy Law to avoid forfeiting repayment opportunities due to procedural omissions.

**Path Three: Filing an Administrative Lawsuit to Urge Government Agencies to Fulfill Their Duties**

If the developer’s inability to obtain property certificates stems from governmental inaction or unlawful conduct, owners may file an administrative lawsuit against the relevant administrative organ pursuant to Article 12 of the Administrative Litigation Law, demanding that it fulfill its statutory duties. For example, if procedures such as planning acceptance or fire safety acceptance are unjustifiably delayed, owners may use legal proceedings to compel improvements in administrative efficiency.

III. Practical Key Points: Evidence Collection and Litigation Strategy

During the rights protection process, evidence is key to winning the case. Homeowners should systematically collect the following materials: the property purchase contract, payment receipts, written documents from the developer promising to process the property title certificate, records of communications with the developer and government departments (including emails and WeChat chat logs), and photographs showing the current condition of the property. Such evidence can both prove the contractual relationship and demonstrate the developer’s breach of contract.

From a litigation strategy perspective, it is recommended that the property owner first file a civil lawsuit to claim breach-of-contract liability and simultaneously apply for property preservation to prevent the developer from transferring assets. If evidence suggests that the developer is suspected of committing a criminal offense (e.g., contract fraud or illegal fundraising), the property owner may report the matter to the public security authorities and pursue criminal liability under Article 224 of the Criminal Law, thereby exerting pressure on the developer to fulfill civil compensation obligations.

In addition, the owner should pay attention to the issue of the statute of limitations. Article 188 of the Civil Code stipulates that the general statute of limitations is three years, commencing from the date on which the right holder becomes aware that their rights have been infringed. In this case, although the owner has maintained continuous communication, if no claim is asserted within three years, the owner may face a statute-of-limitations defense; therefore, legal proceedings should be initiated as soon as possible.

IV. Legal Counsel’s Recommendations: A Guide to Mitigating Risks in Property Purchases

This incident serves as a wake-up call for all homebuyers. Before purchasing a property, be sure to complete the following legal due diligence:

First, examine the developer’s qualifications. Verify the developer’s “Pre-sale Permit for Commercial Residential Properties” and corporate credit information, and investigate its past project performance to avoid blacklisted enterprises.

Second, verify the property’s mortgage status. Query the real estate registration center to determine whether the property is subject to a mortgage or seizure. If so, require the developer to release the mortgage prior to signing the contract.

Third, the contract explicitly specifies the time limit for obtaining property ownership certificates and the corresponding liability for breach of contract. The Commodity Housing Purchase Contract shall expressly stipulate the deadline for obtaining the property ownership certificate (e.g., within 180 days after delivery of the property) and the standard for liquidated damages for delay, thereby providing a basis for subsequent rights protection.

Fourth, retain all supporting documents. Pay the purchase price via bank transfer whenever possible, clearly noting “purchase price” in the transfer description, and avoid cash transactions to ensure a complete chain of evidence.

For owners already embroiled in disputes, it is advisable to engage a professional real estate lawyer to systematically safeguard their rights—through measures such as issuing lawyer’s letters or filing lawsuits. Guangdong Zhiming Law Firm has extensive experience handling commercial residential property purchase disputes and has successfully assisted owners in recovering property titles or obtaining substantial compensation in numerous similar cases. If you are facing a comparable issue, consider seeking professional legal support to protect your rights with the power of the law.

In summary, purchasing a home constitutes a major household asset allocation, and preventing legal risks is far more important than seeking remedies after disputes arise. We hope every homebuyer can live in peace and security, with property rights fully protected.