Homebuyer pays owner after new law hit deal
By Xu Fang |
December 30, 2010, Thursday
|
Print Edition
Print Edition
A CHINESE New Zealander has been ordered to pay 300,000 yuan (US$45,317) compensation, after pulling out of a real estate deal as new government policies to curb runaway housing prices stopped him getting a bank loan.
The would-be buyer, surnamed Sun, had the plug pulled on his deal after the Chinese government introduced policies to rein in inflated real estate prices in April.
The American owner of the property, Jeppy Szeto, was also ordered to return the 200,000 yuan Sun had put down, the Jing'an District People's Court said yesterday.
Sun signed a contract with Szeto to buy a property on Xikang Road for 10.25 million yuan on April 15. They agreed to a contract that Sun should pay 4.1 million yuan in cash as down payment before April 21 and apply for 6.05 million yuan in loan from a bank. The remaining 100,000 yuan would be paid on the day they completed the deal.
Sun paid an initial sum of 200,000 yuan on the day the contract was signed.
But two days later, the central government introduced policies prohibiting banks from giving loans to out-of-town people who couldn't provide certificates of at least one year of tax payment or social insurance payment.
As Sun hadn't lived in Shanghai for a year, he couldn't get a loan from the bank and had to ask for termination of the contract. Szeto agreed to this. But because the sides couldn't reach an agreement on compensation, Sun filed a lawsuit to the court in June, asking Szeto to return his 200,000 yuan.
Sun claimed that the unexpected policy made him unable to fulfil the contract. Therefore, he argued, he shouldn't bear responsibility for breach of contract.
Szeto countercharged that Sun should pay him 2.05 million yuan - 20 percent of the property price - in compensation for breach of contract plus 0.05 percent of the balance. The court decided Sun should pay compensation of 300,000 yuan.
The would-be buyer, surnamed Sun, had the plug pulled on his deal after the Chinese government introduced policies to rein in inflated real estate prices in April.
The American owner of the property, Jeppy Szeto, was also ordered to return the 200,000 yuan Sun had put down, the Jing'an District People's Court said yesterday.
Sun signed a contract with Szeto to buy a property on Xikang Road for 10.25 million yuan on April 15. They agreed to a contract that Sun should pay 4.1 million yuan in cash as down payment before April 21 and apply for 6.05 million yuan in loan from a bank. The remaining 100,000 yuan would be paid on the day they completed the deal.
Sun paid an initial sum of 200,000 yuan on the day the contract was signed.
But two days later, the central government introduced policies prohibiting banks from giving loans to out-of-town people who couldn't provide certificates of at least one year of tax payment or social insurance payment.
As Sun hadn't lived in Shanghai for a year, he couldn't get a loan from the bank and had to ask for termination of the contract. Szeto agreed to this. But because the sides couldn't reach an agreement on compensation, Sun filed a lawsuit to the court in June, asking Szeto to return his 200,000 yuan.
Sun claimed that the unexpected policy made him unable to fulfil the contract. Therefore, he argued, he shouldn't bear responsibility for breach of contract.
Szeto countercharged that Sun should pay him 2.05 million yuan - 20 percent of the property price - in compensation for breach of contract plus 0.05 percent of the balance. The court decided Sun should pay compensation of 300,000 yuan.
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