Court Orders Refund of CNY 1,860,000 in Property Sale Dispute
In this case, a buyer sought the return of her deposit and payment after a property purchase fell through. She also claimed compensation for interest and lost potential profit from rising house prices. The court ordered the seller and the real estate agency to refund the purchase money plus interest, but refused the claim for price difference damages due to insufficient evidence.
In April 2009, Mr. Zhang purchased ten residential units in Eastern China City through a public auction from Southern China Industrial Co., Ltd. He then authorized Eastern China Real Estate Co., Ltd. to sell those properties. On April 20, 2009, Ms. Wang, the buyer, signed a Property Agency Sale Agreement with the real estate company to buy one of those units for a total price of CNY 1,960,000. She paid a deposit of CNY 20,000, then made further payments of CNY 180,000 and CNY 1,660,000, totaling CNY 1,860,000. A supplementary agreement required the remaining CNY 100,000 to be paid on the day of title transfer. The agency promised to complete the transfer within 90 days.
The real estate company never transferred the property to Ms. Wang. In October 2009, she sued the agency, Mr. Zhang, and Southern China Industrial, seeking an order to force the transfer. The trial court initially ruled in her favor, but the appellate court sent the case back for retrial due to unclear facts. During retrial, it emerged that Mr. Zhang had already sold the same unit to another buyer on April 17, 2009, one day before he authorized the agency. That other buyer obtained a court order in December 2010 confirming ownership. The retrial court then told Ms. Wang she should change her claim because performance was impossible, but she refused. Her case was dismissed; she appealed but later withdrew.
In the current proceeding, Ms. Wang demanded that Mr. Zhang and the real estate company jointly repay the CNY 1,860,000 she had paid, plus interest of CNY 338,876 calculated from April 30, 2009 to February 10, 2012 at an annual rate of 6.65 percent. She also claimed CNY 2,174,029 as compensation for the rise in market value of the property, based on an online real estate valuation showing the average price had increased from CNY 14,000 per square meter to CNY 30,351 per square meter. The defendants did not appear at trial. Southern China Industrial stated it had no relationship with Ms. Wang and was not involved.
The court held that the Property Agency Sale Agreement was valid and binding because Mr. Zhang had authorized the agency to sell the unit. By accepting Ms. Wang’s payment and then failing to transfer title, the defendants breached the contract. Since a prior court had already confirmed that the property now belonged to the other buyer, the agreement could no longer be performed. Therefore, Mr. Zhang and the real estate company were jointly and severally liable to return the CNY 1,860,000 and pay interest from April 30, 2009 to February 10, 2012 at the central bank’s lending rate. However, the court refused to award the claimed CNY 2,174,029 in price difference losses. Ms. Wang had offered only an online valuation as evidence, which the court found insufficient. After the judge explained the need for a formal appraisal and asked if she wished to request one, she declined. Without reliable proof of the actual market gain, the court could not support that part of her claim.
The ruling underscores the principle that a buyer who pays for a property that cannot be transferred is entitled to a refund of the purchase price plus interest as damages for breach of contract. However, claims for speculative losses, such as unrealized price appreciation, require solid evidence — typically an expert valuation or comparable sales data — and not merely an internet estimate. Parties should also be aware that when multiple buyers claim an interest in the same property, the first to obtain a valid court order may prevail, leaving later purchasers without a right to specific performance.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.