法释[2003]7号

（Promulgated by the Supreme People's Court on 28 April 2003 and effective as of 1 June 2003.）

颁布日期：20030428 　实施日期：20030428 　颁布单位：最高人民法院

This Interpretation is formulated in accordance with the relevant laws such as the PRC， Civil Law General Principles， the PRC， Contract Law， the PRC， Administration of Urban Real Property Law and the PRC， Security Law and in light of the civil adjudication practice， in order to try dispute cases involving commodity premises sales and purchase contracts correctly and in a timely manner.

Article 1　For the purposes of this Interpretation， the term “commodity premises sales and purchase contracts” shall refer to contracts by which the premises that are not yet built or that are completed are sold to the society by real estate development enterprises （Vendor） and the ownership of such premises is transferred to the buyer， and the buyer pays a price.

Article 2　Commodity premises pre-sale contracts concluded with a buyer by a Vendor that has not obtained a commodity premises pre-sale permit shall be deemed as void， but in cases where a commodity premises pre-sale permit is obtained before an action is instituted， the contract may be deemed as valid.

Article 3　Sales advertisements and publicity materials of commodity premises are invitations to offer. However， specific explanations and undertakings made by a Vendor regarding premises and related facilities within the scope of a commodity premise development plan that have a material impact on the conclusion of the commodity premises sales and purchase contract and determination of the price of the premises shall be deemed as offers. Such explanations and undertakings shall be deemed as particulars of the contract even if they are not included in the commodity premises sales and purchase contract， and any party in violation of them shall be liable for breach of contract.

Article 4　Where a Vendor receives a deposit from a buyer by way of subscription， placing of order or advance reservation， etc. as security for the conclusion of a commodity premises sales and purchase contract， if one of the parties is unable to conclude the commodity premises sales and purchase contract， the matter shall be handled in accordance with the provisions of the law on deposits. If the failure to conclude the commodity premises sales and purchase contract is due to reasons not attributable to either party， the Vendor shall return the deposit to the buyer.

Article 5　Where subscription， order or advance reservation agreements for commodity premises contain the main particulars of the commodity premises sales and purchase contracts stipulated in Article 16 of the Administration of Sale of Commodity Premises Procedures， and the Vendor has received the purchase price for the premises in accordance with the agreement， such agreement shall be deemed as a commodity premises sales and purchase contract.

Article 6　Where a party requests that a commodity premises pre-sale contract be confirmed as void on the grounds that the registration and record filing procedures have not been carried out in accordance with laws and administrative regulations， such request shall not be upheld.

If the parties have agreed that the completion of registration and record filing procedures shall be a condition to the effectiveness of the commodity premises pre-sale contract， such agreement shall prevail， except where one party has already fulfilled his main obligations and the other party accepts the performance.

Article 7　In cases where a demolisher has concluded an agreement on compensation and resettlement for demolition and removal through exchange of ownership with the displaced persons whose premises are being demolished， and it has been clearly stipulated that the demolisher has designated premises with specific location and usage for the displaced persons whose premises are being demolished as compensation and resettlement， if the demolisher sells the premises for compensation and resettlement to a third party and the displaced persons whose premises are being demolished request priority in obtaining the premises for compensation and resettlement， such request shall be upheld.

If the displaced persons whose premises are being demolished request that the agreement on compensation and resettlement for demolition and removal be terminated， the matter shall be handled in accordance with Article 8 hereof.

Article 8　If any of the following circumstances renders it impossible to achieve the objective of the commodity premises sales and purchase contract， the buyer who is unable to obtain the premises may request for termination of the contract， return of the purchase price already paid with interest and compensation for losses， and may also request that the Vendor be liable for damages not exceeding one time the purchase price paid：

1. the Vendor fails to inform the buyer that the premises have been mortgaged to a third party after the conclusion of the commodity premises sales and purchase contract； or

2. the Vendor sells the premises to a third party after the conclusion of the commodity premises sales and purchase contract.

Article 9　If any of the following circumstances occurs when a Vendor concludes a commodity premises sales and purchase contract， so rendering the contract void， rescinded or terminated， the buyer may request for the return of the purchase price already paid with interest and compensation for losses， and may also request that the Vendor be liable for damages not exceeding one time the purchase price paid：

1. the Vendor deliberately conceals the fact that it has not obtained a commodity premises pre-sale permit or provides a false commodity premises pre-sale permit；

2. the Vendor deliberately conceals the fact that the premises being sold have already been mortgaged； or

3. the Vendor deliberately conceals the fact that the premises being sold have already been sold to a third party or allocated as compensation for resettlement.

Article 10　If a buyer requests that a commodity premises sales and purchase contract concluded between the Vendor and a third party be confirmed as void on the grounds that he is unable to obtain the premises as a result of malicious collusion of the Vendor and the third party in the conclusion of the said contract and the delivery of the premises to the third party for use， such request shall be upheld.

Article 11　Transfer of possession of premises shall be deemed as delivery for use of the premises unless agreed otherwise by the parties.

The risks of damage to and destruction of the premises shall be borne by the Vendor before the premises are delivered for use， and by the buyer after they are delivered for use. If a buyer， who has received written notification from the Vendor of delivery of the premises， refuses without proper reason to accept the premises， the risks of damage to and destruction of the premises shall be borne by the buyer from the date of delivery for use stipulated in the written notification， unless the law stipulates otherwise or the parties agree otherwise.

Article 12　If the main structure of the premises is not up to standard and the premises cannot be delivered for use， or if after delivery for use the main structure is found upon testing and verification not up to standard， and the buyer requests for termination of contract and compensation for losses， such request shall be upheld.

Article 13　If the quality of the premises is such that it seriously affects the normal use for habitation， and the buyer requests for termination of contract and compensation for losses， such request shall be upheld.

During the warranty period， the Vendor shall bear the liability for repair of premises with quality problems that have been delivered for use. Where the Vendor refuses to undertake repairs or delays doing so within a reasonable time period， the buyer may undertake the repairs himself or appoint another person to do so. The cost of the repairs and other losses caused during the repair period shall be borne by the Vendor.

Article 14　In case of inconsistency between the interior floor area or floor area of the premises delivered for use by the Vendor and the area stipulated in the commodity premises sales and purchase contract， where there are stipulations in the contract， it shall be handled in accordance with such stipulations. If there are no stipulations or the stipulations are unclear， it shall be handled in accordance with the following principles：

1. if the absolute value of the error ratio of the area is 3% or less， it is settled in accordance with the price stipulated in the contract， and the buyer requests for termination of contract， such request shall not be upheld； and

2. if the absolute value of the error ratio of the area exceeds 3% and the buyer requests for termination of contract and return of the purchase price already paid with interest， such request shall be upheld. If the buyer agrees to continue his performance of the contract and the actual area of the premises is greater than that stipulated in the contract， the buyer shall pay the price for the portion of the area the error ratio of which is 3% or less according to the price stipulated in the contract， and the Vendor shall pay the price for the portion of the area in excess of 3%， with the ownership going to the buyer. If the actual area of the premises is less than that stipulated in the contract， the Vendor shall return the price for the portion of the area the error ratio of which is 3% or less plus interest to the buyer， and in case of an error ratio of the area exceeding 3%， the Vendor shall return an amount of double the price of the portion exceeding 3% to the buyer.

Article 15　If， in accordance with Article 94 of the Contract Law， the Vendor delays delivery of the premises or the buyer delays payment of the purchase price for the premises and fails to do so within a reasonable period of three months after reminder， and one of the parties requests for termination of the contract， such request shall be upheld unless the parties agree otherwise.

If there are no provisions in law and the parties do not have an agreement， after reminder by the other party， the reasonable time period for exercising the right of termination is three months. If there has been no reminder by the other party， the right to termination shall be exercised within one year of the date of occurrence of the right. If the right has not been exercised within the time period， it shall be extinguished.

Article 16　If a party requests for a reduction in the liquidated damages on the grounds that they are too high， they shall be appropriately reduced to 30% above the losses caused. If a party requests for an increase in the liquidated damages on the grounds that they are less than the losses caused， the amount of the liquidated damages shall be determined by the amount of loss caused by the breach of contract.

Article 17　If the amount of liquidated damages or the method for calculating damages are not stipulated in the commodity premises sales and purchase contract， the amount of liquidated damages or damages may be determined as follows：

In case of failure to pay on time， they shall be calculated in accordance with the amount of the total purchase price not paid on the basis of the interest rate on outstanding loans set by the People's Bank of China for financial institutions.

In case of failure to deliver the premises for use on time， they shall be calculated in accordance with the amount of rent that would be paid for a property of the same type in the same locality for the period for which the handover is delayed， as announced by the department in charge or as appraised by a qualified real estate appraisal organization.

Article 18　If the buyer is unable， due to reasons attributable to the Vendor， to obtain the certificate of ownership of the premises before the following time limits expire， the Vendor shall be liable for breach of contract unless both parties agree otherwise：

1. the time limit for registration of ownership of the premises as stipulated in the commodity premises sales and purchase contract；

2. 90 days from the date on which the premises are delivered for use where the subject matter in the commodity premises sales and purchase contract is premises not yet built； and

3. 90 days from the date on which the contract is concluded where the subject matter in the commodity premises sales and purchase contract is completed premises.

If there are no stipulations on liquidated damages in the contract or the amount of losses is difficult to determine， they can be calculated according to the total purchase price paid on the basis of the interest rate on outstanding loans set by the People's Bank of China for financial institutions.

Article 19　If， due to reasons attributable to the Vendor， the time limit stipulated in the commodity premises sales and purchase contract or in Article 33 of the Administration of Urban Real Property Development and Business Regulations for registration of ownership of the premises has been exceeded for more than one year， and the buyer is unable to register ownership of the premises and requests for termination of contract and compensation for losses， such request shall be upheld.

Article 20　Where a Vendor concludes a commodity premises underwriting contract with an underwriter that stipulates that the Vendor will hand over the premises being developed to the underwriter for sale in the name of the Vendor， the premises that have not been sold after the underwriting period has expired shall be purchased by the underwriter in accordance with the underwriting price stipulated in the contract except where the parties agree otherwise.

Article 21　Where a Vendor sells on its own premises that have been agreed to be sold by an underwriter and the underwriter requests compensation from the Vendor， such request shall be upheld except where the parties agree otherwise.

Article 22　If a dispute arises from a commodity premises sales and purchase contract between a buyer and a Vendor， the people's court shall notify the underwriter to participate in the litigation. If the Vendor， the underwriter and the buyer have a clear agreement on their rights and obligations， the position of each party in the litigation shall be decided by the contents of the agreement.

Article 23　Where it is agreed in the commodity premises sales and purchase contract that the buyer shall pay by secured loan and the commodity premises sales and purchase contract cannot be fulfilled because one of the parties is unable to conclude the commodity premises secured loan contract， the other party may request for termination of contract and compensation for losses. If， due to reasons not attributable to any of the parties， a commodity premises secured loan agreement cannot be concluded and the commodity premises sales and purchase contract cannot be fulfilled as a result， a party may request for termination of contract， and the Vendor shall return the capital of the purchase price for the premises with interest or the deposit paid for the premises he received to the buyer.

Article 24　Where a commodity premises sales and purchase contract has been recognized as void or has been rescinded or terminated， thereby rendering it impossible to achieve the objective of the commodity premises secured loan contract， and the parties request for termination of the commodity premises secured loan contract， such request shall be upheld.

Article 25　Where one party to a commodity premises sales and purchase contract that pays in the form of secured loan requests that the commodity premises sales and purchase contract be recognized as void or be rescinded or terminated， if the guarantor presents his claims as an intervenor with independent right of claim， they shall be tried together with the dispute over the commodity premises secured loan contract. If no claims are presented， only the dispute over the commodity premises sales and purchase contract shall be tried. If the guarantor institutes a separate action for the dispute over the commodity premises secured loan contract， such action may be tried together with the dispute over the commodity premises sales and purchase contract.

If， after a commodity premises sales and purchase contract has been recognized as void or has been rescinded or terminated， the commodity premises secured loan contract shall also be terminated， the Vendor shall return the purchase loan and the capital of the purchase price with interest paid for the premises he received to the guarantor and the buyer respectively.

Article 26　If the buyer fails to repay the loan in accordance with the provisions of the commodity premises secured loan contract and fails to register the mortgage on the premises with the guarantor， and the guarantor sues the buyer for the buyer's contractual rights under the commodity premises sales and purchase contract， the Vendor shall be notified to participate in the litigation. When the guarantor sues the Vendor at the same time and the Vendor has provided guarantee for the commodity premises secured loan contract， he shall be treated as co-defendant.

Article 27　If the buyer fails to repay the loan in accordance with the provisions of the commodity premises secured loan agreement but has already obtained the certificate of ownership of the premises and has registered the mortgage on the premises with the guarantor， and the mortgagor requests that the buyer repay the loan or that he be entitled to priority receipt of payment from the mortgaged premises， the Vendor shall not be added as a party except where the Vendor has provided guarantee thereon.

Article 28　This Interpretation shall be effective as of 1 June 2003.

This Interpretation applies to cases involving disputes over commodity premises sales and purchase contracts concluded after the implementation of the PRC， Administration of Urban Real Property Law that are still at the first instance or second instance stage after the promulgation and implementation of this Interpretation.

If a party applies for a retrial， or a decision for retrial is rendered pursuant to trial supervision procedures， in a dispute over a commodity premises sales and purchase contract that was concluded after the implementation of the PRC， Administration of Urban Real Property Law and in which a final judgment was rendered before the promulgation and implementation of this Interpretation， this Interpretation does not apply.

Sales and purchase of commodity premises that occurred before the implementation of the PRC， Administration of Urban Real Property Law are governed by the laws and regulations in effect at the time of occurrence and the Supreme People's Court， Answers to Questions Relevant to Several Issues in the Trial of Cases Involving Real Property Development and Business Cases That Occurred Prior to the Implementation of the Administration of Real Property Law Reply.