1、 Basic case
The buyer and the real estate developer sign a "Pre sale Contract for Commercial Housing", which stipulates the total house price, delivery time, breach of contract liability, etc. The buyer paid the full purchase price according to the contract, but the real estate developer failed to deliver the house on time and entered bankruptcy reorganization after being ruled by the court. After receiving the "Notice of Debt Declaration", the buyer shall declare the debt to the administrator, indicating that the payment has been made and signed online, and request to handle the transfer of the house.
Shanghai Li Xiaohua Law Firm and Shanghai Modern Law Firm have invited legal experts and professors from the Institute of Law of Shanghai Academy of Social Sciences and Shanghai University of Political Science and Law to discuss and demonstrate the phenomena that exist in this type of judicial practice in terms of determining facts and applying laws.
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2、 Controversy Focus
1. In the case where the buyer has fully paid the purchase price, can the bankruptcy administrator still terminate the sales contract of the commercial housing in accordance with Article 18 of the Enterprise Bankruptcy Law of China?
2. What is the legal basis and feasibility for the buyer to request continued performance of the contract?
3. How to determine the repayment order of liquidated damages in bankruptcy proceedings?
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3、 Discussion opinions
01
Regarding the issue of whether the bankruptcy administrator has the right to lawfully terminate the sales contract for commercial housing.
According to Article 18, Paragraph 1 of the Enterprise Bankruptcy Law of the People's Republic of China, after the people's court accepts the bankruptcy application, the administrator has the right to decide to terminate or continue to perform the contract that was established before the acceptance of the bankruptcy application but has not been fully performed by both the debtor and the other party, and notify the other party. If the administrator fails to notify the other party within two months from the date of acceptance of the bankruptcy application, or fails to respond within thirty days from the date of receipt of the other party's reminder, the contract shall be deemed terminated.
This clause only applies to situations where both parties have not fully fulfilled their obligations. In the case where the buyer has fulfilled the contract agreement and paid the full purchase price, the buyer has the right to request the manager to continue to perform the contract and bear the liquidated damages within the scope stipulated by law.
02
The legal basis and feasibility of the buyer's request to continue fulfilling the contract.
According to Article 3 of the Management Measures for the Sale of Commercial Housing, the sale of commercial housing includes both current and pre-sale of commercial housing. The current sale of commercial housing referred to in these measures refers to the act of real estate development enterprises selling completed and accepted commercial housing to buyers, and the buyers paying the house price. The pre-sale of commercial housing referred to in these measures refers to the act of real estate development enterprises selling commercial housing under construction to buyers in advance, and the buyers paying a deposit or the purchase price.
According to Article 502 (1) of the Civil Code of the People's Republic of China, a contract established in accordance with the law shall come into effect upon its establishment, except as otherwise provided by law or agreed upon by the parties.
The "Pre sale Contract for Commercial Housing" signed between the buyer and the real estate developer is legally valid and should be protected by law. The homebuyer may file a civil lawsuit with the court to request continued performance of the "Pre sale Contract for Commercial Housing" involved in the case.
03
How to determine the repayment order of liquidated damages in bankruptcy proceedings.
According to Article 113 of the Enterprise Bankruptcy Law of the People's Republic of China, after prioritizing the repayment of bankruptcy expenses and common interest debts, the bankruptcy property shall be repaid in the following order: (1) the wages, medical, disability subsidies, and pension expenses owed to employees by the bankrupt, the basic pension insurance and basic medical insurance expenses that should be transferred to employees' personal accounts, and the compensation that should be paid to employees according to laws and administrative regulations; （2） The social insurance premiums and taxes owed by the bankrupt other than those specified in the preceding paragraph; （3） Ordinary bankruptcy claims. If the bankruptcy property is insufficient to meet the repayment requirements in the same order, it shall be distributed proportionally. The salaries of directors, supervisors, and senior management personnel of bankrupt enterprises are calculated based on the average salary of the employees of the enterprise. Article 46 stipulates that creditor's rights that have not yet matured shall be deemed to have matured upon acceptance of the bankruptcy application. Interest bearing claims shall cease to accrue from the time of acceptance of the bankruptcy application.
According to the relevant provisions of the Enterprise Bankruptcy Law of the People's Republic of China and the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Enterprise Bankruptcy Law of the People's Republic of China (II), the liquidated damages before the acceptance of the bankruptcy application shall be declared as ordinary bankruptcy claims, and the liquidated damages arising from the delay in performance by the administrator after the acceptance of the bankruptcy application may be recognized as a common interest debt.
conclusion
In the bankruptcy proceedings of real estate developers, whether the fully paid purchase contract can continue to be fulfilled is an important legal issue related to the protection of the rights and interests of buyers. According to the Enterprise Bankruptcy Law of the People's Republic of China and relevant judicial interpretations, if the buyer has paid the full purchase price, the administrator must handle the termination of the contract carefully. The buyer has the right to request continued performance of the contract and to handle the registration of the change of ownership of the property. In judicial practice, for completed existing houses, the court usually supports the buyer's request for continued performance; However, there are different understandings regarding unfinished pre-sale houses. Buyers can claim their rights through civil litigation, and the liquidated damages before bankruptcy shall be declared as ordinary debts. The liquidated damages incurred due to the delay in performance by the administrator after bankruptcy can be prioritized as common interest debts for repayment. This system design not only protects the legitimate rights and interests of homebuyers, but also maintains the fair and orderly conduct of bankruptcy proceedings.
Relevant precedents of the Supreme People's Court
The Supreme People's Court (2020) Civil Judgment No. 287- Reconsideration of the Property Sales Contract Dispute between Hongshen and Hainan Zhongzhong Tourism Industry Development Co., Ltd. The Supreme People's Court held in its retrial that regarding the issue of whether the contract for the sale and purchase of commercial housing involved in the case should continue to be performed. According to Article 18, Paragraph 1 of the Enterprise Bankruptcy Law of the People's Republic of China, after the people's court accepts the bankruptcy application, the administrator has the right to decide to terminate or continue to perform the contract that was established before the acceptance of the bankruptcy application but has not been fully performed by both the debtor and the other party, and notify the other party. If the administrator fails to notify the other party within two months from the date of acceptance of the bankruptcy application, or fails to respond within thirty days from the date of receiving the other party's reminder, the contract shall be deemed terminated. This clause only applies to situations where both parties have not fully fulfilled their obligations. Specifically in this case, Hong Shen has already paid the purchase price to Zhongzhong Industrial Company, and there is no other obligation that Hong Shen has not fulfilled. The original judgment found that the manager of Zhongzhong Tourism Company has the right to terminate the contract, which is an error in the application of law and should be corrected. According to the statement of Zhongzhong Tourism Company in this case, in the bankruptcy reorganization of Zhongzhong Tourism Company, the real and effective sales contracts of commercial housing that were actually paid by the buyer were fulfilled. As a creditor of a moderate tourism company, Hong Shen has the right to request repayment of similar debts. His request to continue fulfilling the lawsuit related to the "Contract for the Sale and Purchase of Commercial Housing" should be supported.
According to Article 1 of the Guiding Opinions of the Supreme People's Court on Strengthening the Retrieval of Classified Cases in Uniform Application of Law (Trial), the classified cases referred to in this opinion refer to cases that have similarities with pending cases in terms of basic facts, dispute focus, legal application issues, etc., and have already been judged and effective by the people's court. Article 9 stipulates that if the retrieved case is a guiding case, the people's court shall make a judgment based on it, except for cases that conflict with new laws, administrative regulations, judicial interpretations, or are replaced by new guiding cases. If other types of cases are retrieved, the people's court can use them as a reference for making judgments.