A HOMEBUYER who was afraid property prices could fall amid tightening measures adopted by the central and local governments was ordered to pay nearly 100,000 yuan (US$15,152) to a vendor for failing to fulfill a purchase contract, Chinese language media reported yesterday.
The homebuyer, identified as Yuan, signed the contract April 12 last year to buy an apartment in Bao an District for 973,000 yuan from a man surnamed Shi. Yuan paid Shi a deposit of 20,000 yuan.
Under the contract, Yuan was to pay Shi about 390,000 yuan as a down payment 15 days after signing the contract and complete all the bank paperwork for the mortgage, the Southern Metropolis Daily reported.
However, Yuan did not comply with the contract after the Central Government released new tightening measures including imposing purchase limits at the end of April. Instead, he sent Shi a legal notice saying he could not buy the apartment because he wasn t eligible to buy the property under the new government policies.
Under the government policies, households with Shenzhen hukou can buy no more than two homes while those with no Shenzhen hukou are required to have paid social security insurance or taxes in the city for at least one year before buying a property.
Nevertheless, Shi found that both Yuan and his wife had paid social security insurance in Shenzhen for one year, meaning he was legally eligible to buy the property. Yuan s wife had also paid personal income tax in Shenzhen for more than one year.
Shi took Yuan to court, seeking 200,000 yuan in compensation for breach of contract. The Bao an District Court ruled in favor of Shi, but lowered the compensation to 10 percent of the home value. The ruling was supported by the Shenzhen Intermediate People s Court after Yuan appealed.
The number of legal disputes over property purchase has increased significantly following the government s tightened policies. (SD News)
