BusinessConstructionHome ImprovementMoney

How to Recover a 500,000 RMB House Payment within 7 Days

2015-06-23 by: Gosen Fu (傅国荪)
Director at Xiongyue Law Firm
Shenzhen, Guangdong, China.

Contract Deposit Recovery

On June 3, 2015, a woman whom we will call Mrs. Buyer and her husband contacted me. They told me that on March 8, 2015, accompanied by a real estate broker's clerk, whom we will call Mr. Broker, signed a "Real Estate Sales Contract" with the seller, whom we will call Mr. Seller.

According to the contract, the buyer should pay a partial deposit of 200,000 yuan to the seller at the time of signing with the balance of 300,000 yuan to the seller within 60 days from the date of signing the contract.

On the day of signing the contract, Mrs. Buyer remitted 200,000 yuan to the intermediary Mr. Broker who in turn gave her a receipt. According to Mr. Broker, the receipt was issued by Mr. Seller.  Within the sixty day period, Mrs. Buyer then again transferred 300,000 yuan to Mr. Broker, as the second tranche of the deposit. Again, Mr. Broker gave Mrs. Buyer a receipt now for the 300,000 yuan, which Mr. Broker claimed was also issued by Mr. Seller.

Soon afterward, Mrs. Buyer received a notice of termination of the contract from Mr. Seller's lawyer. The notice said that because Mrs. Buyer did not fulfill the deposit requirements as the contract demanded, Mr. Seller would terminate the contract and Mrs. Buyer was to pay liquidated damages. In addition, the notice also said the receipt of 500,000 yuan Mrs. Buyer received was false. Apparently Mr. Seller's signature on it was forged, and Mr. Seller actually received only 300,000 yuan.

Mrs. Buyer agreed to terminate the contract, but did not agree to pay liquidated damages. Mrs. Buyer requested Mr. Seller and Mr. Broker to refund her deposit while Mr. Seller requested Mrs. Buyer to pay liquidated damages for breach of contract stating her case on the termination agreement.

Now at this point in time, Mr. Broker was nowhere to be found. So in desperation, through some friends of hers, Mrs. Buyer found me.

After careful analysis of the case, I suggested that Mrs. Buyer and Mr. Seller do not rush into signing a termination agreement. I did not worry that Mrs. Buyer could not get her 300,000 back. What I worried about was that Mrs. Buyer would not get the 200,000 yuan back.

I felt that the breach of contract was not by Mrs. Buyer but Mr. Seller. I felt that Mrs. Buyer should recover her deposit in full from Mr. Seller. However, Mrs. Buyer could only get at most 300,000 yuan back from Mr. Seller if she signed the termination agreement minus the liquidated damages she would have to pay. What was worse, whether or not she could recover that 200,000 yuan was still in question, because Mr. Broker had disappeared.

Considering the above, I created a strategy that could help Mrs. Buyer recover all the money as follows:

  1. Ask Broker to return 200,000 yuan.
  2. Ask Mr. Seller to return the full deposit if Broker cannot be found or if found, Mr. Broker does not pay back the 200,000 yuan.
  3. Tell Mr. Seller that Mrs. Buyer can hold Mr. Seller for his breach of contract.

Mrs. Buyer agreed with my proposal and asked me to recover the balance. First, in a variety of ways, I put pressure on Mr. Broker. Within three days, Mr. Broker returned the 200,000 yuan to Mrs. Buyer.

I then turned to negotiate with Mr. Seller and his lawyer. After several rounds of debate, I made Mr. Seller realize that if he did not return the deposit, and we took this to court, he would face the risk of being liable for breach of contract. Mr. Seller returned 300,000 yuan to Mrs. Buyer three days into the negotiation. Closely in line with my surrender proposal for them.

As a result, it took less than 7 days for us to recover 500,000 yuan from the signing of the authorized contract to the successful return of the housing fund. I not only received my client's praise, but also won the opposing side’s admiration.

Gosen FuGosen Law Firm



If you have any questions and need more detail, or you are interested in purchasing in China, feel free to connect. 1 86 7673 5298. Our staff is bilingual.



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