Major First-Instance Victory: Another Typical Case in the "3.30" Real Estate Disputes

Today, I received the judgment from the Shenzhen Intermediate People's Court, which dismissed the appeal and upheld the original verdict (the first trial was at Shenzhen Longgang Court). The judgment ordered the property owner to continue performing the "Shenzhen Second-hand House Reservation and Intermediary Contract," pay the buyer liquidated damages for delay at a daily rate of 0.04% of the transaction price as stipulated in the contract (calculated from May 20, 2015, until the completion of transfer and delivery obligations), and bear all litigation costs (case acceptance fees, preservation fees, etc.).

It should be specifically noted that during the trial, the property owner argued that the house was actually a dual-property unit that could not be separated and was his only residential property, thus it could not be forcibly executed. He voluntarily assumed liability for breach of contract but was unwilling to proceed with the transaction. The court found his defense untenable, dismissed it, and ordered forced transfer.

Based on the recent compulsory transfer judgment from Longgang Court, and information learned from other cases, it is understood that currently, when the Longgang Court in Shenzhen rules for compulsory transfer, it also awards in full the delay penalty payment by the property owner as stipulated in the contract (without reduction). This is another typical case among the earliest known and most comprehensively protected plaintiff rights in multiple property disputes handled by the Zhiming lawyer team following the "3.30" policy.

I. Basic Case Facts

On March 21, 2015, Zhang, through the introduction of Shenzhen Wan Property Service Co., Ltd., signed the "Shenzhen Second-hand Housing Reservation, Purchase, and Intermediary Service Contract" with Deng and his wife Qi. Subsequently, Zhang paid the deposit strictly in accordance with the time limits and amounts specified in the contract. Due to the introduction of the "3.30" policy, which led to changes in the real estate market, Deng and Qi openly breached the contract by raising the housing price. Left with no choice, Zhang was forced to re-sign the "Shenzhen Second-hand Housing Reservation, Purchase, and Intermediary Service Contract" with Deng and Qi, under which both parties agreed that the housing payment must be paid into a third-party supervisory account at a bank designated by both parties before May 20, 2015. To this end, Zhang repeatedly requested Deng to go to the bank within the time limit stipulated in the contract to assist in handling the fund supervision procedures, but Deng reneged again, explicitly stating that he would no longer perform the contract. Despite Zhang, together with the third party Shenzhen Wan Property Service Co., Ltd., negotiating with Deng, Deng consistently refused to fulfill the contract. With no way to borrow money, Zhang had no choice but to entrust lawyers from Guangdong Zhiming Law Firm to represent him in the lawsuit. After assignment, Lawyer Zhang Qingping and trainee lawyer Yao Huamei were responsible for handling this case.

II. Disputed Focus

The focus of the dispute between the two parties in this case is:

(1) Whether to continue performing the contract and enforce the transfer of ownership;

(2) Whether to pay damages for breach of contract.

 

 III. Judgment

After trial by the Longgang District People's Court, Zhang obtained a favorable judgment as follows:

(1) The contract "Shenzhen Second-hand House Reservation Purchase and Intermediary Service Contract" signed by plaintiff Zhang and defendant Deng shall continue to be performed;

(2) Defendant Deng shall assist plaintiff Zhang in transferring the property and deliver the house.

(3) The judgment orders the defendant, Deng, to pay the plaintiff liquidated damages, among other amounts.

 

 

IV. Case Analysis

Despite the various defenses raised by Mr. Deng and his wife in an attempt to confuse the judge, the strategy adopted by the attorneys at Zhiming Law Firm was concise and to the point: directly target the contractual agreement between the parties, striking at the crux of the matter. Under the guidance of the attorneys at Zhiming, Attorney Zhang Qingping systematically dismantled each argument put forward by the opposing side, such as the claim that Article 16 of the "Intermediary Contract" granted the breaching party the right to unilaterally terminate the contract, and that the compensation amount violated the principle of good faith. At the same time, they actively steered the judge's reasoning, focusing on the explicit terms of the contract and the performance thereof, simplifying the complexity while delivering a decisive blow.

Overall, the main arguments of Attorney Zhiming can be summarized as follows:

(1) The "Shenzhen Second-hand House Reservation Purchase and Intermediary Service Contract" signed by both parties had proper subject matter, genuine expression of intent, and content that did not violate mandatory provisions of laws or administrative regulations. It is a valid contract with legal binding force on both parties. Deng failed to handle the fund supervision with the plaintiff within the agreed time, repeatedly delaying instead, which constitutes a breach of contract. Subsequently, by feigning negotiation and causing multiple delays that prevented the contract’s purpose from being achieved, Deng committed a fundamental breach and must bear liability for the breach.

(2) The property in question is not subject to any mortgage, and the defendant has full disposal rights over it. There are no obstacles preventing the continued performance of the contract with respect to the property. The contract is valid, and both parties should honor and perform their obligations under it. Pursuant to Article 107 of the Contract Law, "If a party fails to perform its contractual obligations, or renders performance that does not conform to the agreement, it shall bear liability for breach of contract, including continuing to perform, taking remedial measures, or compensating for losses." Additionally, Article 110 stipulates that if a party fails to perform a non-monetary obligation or renders performance that does not conform to the agreement, the other party may still demand continued performance, except in circumstances where performance is legally or factually impossible, or where the cost of compulsory performance is excessively high. Therefore, Deng has the obligation to continue performing the contract. The property should be transferred and delivered to Zhang.

5. Lawyer's Summary of Insights

This case is a typical example of a seller's malicious breach of contract in a second-hand housing transaction. First, Deng refused to cooperate with Zhang in the fund supervision process, and later raised the price and re-signed the contract. Not only did he fail to actively perform the contract, but he also kept delaying matters. There is every reason to believe that Deng's series of actions were malicious and premeditated. The introduction of the "3.30" policy caused housing prices to surge. In order to seek greater profits, the seller insisted on breaching the contract even after the buyer agreed to a price increase, seriously violating the principle of good faith. Such subjective malice is utterly reprehensible and warrants severe punishment. Second, the property in question has no mortgage or lease, with the title deed in hand, and the seller holds full disposal rights. To prevent the seller from transferring the property to a third party when cornered, which could ultimately render the contract's purpose unattainable, our side acted decisively by applying to the court for property preservation to protect Zhang's lawful rights and interests.

Plan carefully before acting. In the current situation of soaring housing prices and frequent malicious breaches by sellers, only by meticulously addressing every step and grasping the critical points to strike decisively can the maximum legitimate interests of the client be secured. This ability to guide the judge's logical reasoning is an indispensable litigation skill in many contract disputes, including commercial and civil cases, and is well worth studying and learning by young lawyers.