Who actually owns a "borrowed-name house purchase"?

School district housing is an everlasting pain in the hearts of Chinese parents. In order to let their children smoothly enroll in key primary schools, Xiao Wang and Xiao Liu, two close friends, agreed to 'buy a house under someone else's name.' Later, due to issues with repaying the loan, the two ended up in court.

Xiao Wang and Xiao Liu are college friends, and both are from Zhongshan, Guangdong. After graduation, they returned to their hometown to work hard, and each has their own different life plans. Xiao Liu is wholeheartedly focused on his career, while Xiao Wang got married early.

A few years later, Xiao Wang's child was 4 years old, just the age to start school. Xiao Wang hoped that his child could get into a key primary school, but since he couldn't afford a school district house, he often complained to his close friend Xiao Liu. At this time, Xiao Liu had achieved some success in her career and had accumulated some savings. She was planning to purchase a property and was interested in several developments. One of them happened to come with registration for a key primary school, but the property price exceeded Xiao Liu's budget. So, Xiao Liu proposed that Xiao Wang lend her some money so that she could buy the school district property, allowing Xiao Wang's child to use that property's school registration for the key primary school. Xiao Wang agreed without hesitation. After that, the two signed a 'buying a house in someone else's name' agreement, which stipulates: 1. The house will be registered under Xiao Wang's name, but the actual owner will be Xiao Liu; 2. Xiao Wang will mortgage his own property to the bank for a loan of 700,000 yuan to pay part of the house price, and Xiao Liu will repay this 700,000 yuan loan in installments. In this way, Xiao Liu acquired her desired house, and Xiao Wang's child secured a place in the key primary school.

However, during the subsequent mortgage repayment process, due to Xiao Liu repeatedly making late payments, the bank pressed Xiao Wang multiple times for repayment, which caused Xiao Wang to feel resentful. A rift grew between the two, and their relationship deteriorated compared to before. Previously, Xiao Liu had confidently registered the house in Xiao Wang's name, but now only wanted to quickly transfer the house back into their own name. Consequently, Xiao Liu took the agreement signed by both of them to the court to file a lawsuit to confirm ownership of the house. If the court ruled that the house belonged to Xiao Liu, the child would lose their place in a key primary school. Xiao Wang became anxious and insisted in court that the agreement to buy the house in someone else's name was fake and that a house registered in one's own name is theirs. However, the agreement bore both of their handwritten signatures, so its authenticity was clear. As expected, the court ruled that the house belonged to Xiao Liu. Xiao Wang lost their child's spot in the key primary school and also completely fell out with their former close friend. . (This case comes from 'Legal Insights', the original text is 'Buying a house under someone else's name, hurting the friendship with a close friend')

　　A lawyer from Guangdong Zhiming Law Firm stated,With the introduction of various policies, the situation of buying houses under someone else's name has actually become more common, but the disputes arising from it are also increasing.

　　1. The main reasons for "buying a house in someone else's name" at present:

(1) Evading laws and policies

(2) Compete for specific home purchase discounts

(3) Conceal the real property information

　　2. Does the law recognize contracts for buying a house in someone else's name?

Except for contracts for buying houses under someone else's name that seriously circumvent laws and policies, in general, as long as the following elements are met, a contract for buying a house under someone else's name is valid:

(1) Both parties signing the contract have the capacity to enter into the contract;

(2) The intentions of both parties are genuine;

(3) The contract content is legal and does not violate public order or good morals, does not violate the mandatory provisions of laws and regulations, and is possible to be realized.

　　3. What evidence should be kept when buying a house in someone else's name?

In reality, buying a house under someone else's name usually involves using the name of relatives or friends, so many people neglect to preserve evidence during the home-buying process. Once a problem arises, it is easy to put oneself in a passive position, and ultimately it becomes difficult to prove that one is the actual owner of the house.

In judicial practice, generallyDetermine the real homeowner from these four aspects:

　　 (This section is sourced from 'China Court Network', and the original text is about the determination of ownership in cases of buying a house under someone else's name)

　　①Who is responsible for the long-term custody of the house property rights registration certificate?If the person in whose name the property is borrowed can provide evidence proving that they have kept the property ownership certificate for a long time, and the person who lent the name cannot provide evidence proving that the property ownership certificate held by the borrower is illegal, it can be initially determined that the borrower has ownership of the property;

　　②Who actually pays the house purchase price and related taxes and fees.

③Who has long-term control and use of the house.

④ Proof from the seller of the house.Who the seller enters into a contract with and from whom the payment is received is also one of the bases for determining the true rights holder.

If the person using someone else's name can provide sufficient evidence in the above four aspects, and the evidence can mutually corroborate each other, forming a complete chain of evidence, the court can recognize that the relevant property belongs to the person using someone else's name, provided it does not involve illegal activities or harm the interests of a third party.

　　A lawyer from Guangdong Zhiming Law Firm also stated that buying a house under someone else's name carries risks for both parties.For the nominal owner, if the actual owner encounters economic disputes, divorce disputes, or suddenly passes away, the property registered under their name is very likely to be auctioned, divided as marital property, or inherited as part of the estate. For the actual owner, they will not be able to enjoy the first-home loan benefits in future property purchases, and in some areas, they will be subject to purchase restriction policies, and so on. Both parties need to be cautious!

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