Developer Ordered to Pay CNY 9114.93 for Late Certificate
A Chinese court has ruled in favor of a homebuyer who sued a real estate company for failing to deliver property ownership certificates within the contractually agreed period. The plaintiff, Mr. Li, purchased two apartments in a residential complex in Eastern China City and sought a penalty of 3 percent of the total purchase price for the delay. The court found that the developer breached the sales contract and ordered it to pay CNY 9114.93 in liquidated damages.
In May 2007, Mr. Li entered into two separate purchase agreements with Eastern China City Tianyi Real Estate Co., Ltd. for apartments measuring approximately 42 square meters each. The total price, including ancillary space, came to CNY 303,830.80. The contracts stipulated that the seller must submit all necessary documents to the property registration authority within 180 days of delivering the property. If the buyer could not obtain the ownership certificates due to the seller’s fault, the buyer could either rescind the contract with a 5 percent penalty or keep the property and claim 3 percent of the purchase price as compensation. The developer delivered the apartments in August 2007 and collected fees from Mr. Li to handle the certificate application on his behalf.
The developer failed to complete the registration process until January 2010, when Mr. Li finally received his property certificates. During the hearing, Mr. Li presented the original sales contracts, payment receipts, a notice posted by the developer in October 2009 announcing that certificate applications could now begin, and the final ownership certificates. The developer did not appear in court and submitted no evidence. The court accepted all of Mr. Li’s evidence as truthful and admissible, noting that the defendant had waived its right to challenge the documents.
The court held that the sales contracts were valid and binding on both parties. Mr. Li had fully paid the purchase price, while the developer failed to submit the required documents to the registration authority within 180 days of delivery. Since the developer had accepted fees to handle the certificate application, it bore the obligation to complete the process in a timely manner. The court found no proof that the developer had met its contractual deadline, and therefore concluded that the delay constituted a breach of contract.
The court rejected the developer’s defense that the delay was caused by a government dispute over绿化率 (green space ratio) requirements. Under the Contract Law of the People’s Republic of China, a party that breaches a contract due to a third party’s actions must still bear liability to the other contracting party. The court also dismissed the statute of limitations argument. The limitation period began when Mr. Li knew or should have known his rights were infringed. The developer’s own notice in October 2009 and the certificate issuance in January 2010 showed that the cause of action arose well within the statutory period. The developer’s further claim that Mr. Li had altered the building structure was irrelevant to the central issue of late certificate delivery.
The court ordered the developer to pay Mr. Li CNY 9114.93, representing 3 percent of the total purchase price, as contractually agreed. This case reinforces that developers must strictly adhere to contractual deadlines for submitting property registration documents, even when external factors cause delays. Buyers who suffer from such delays should preserve evidence such as contracts, payment receipts, and the developer’s public notices to support a claim for liquidated damages.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.