Despite another cut in the reserve requirement ratio this week, the situation in the property market remains grim as purchase restrictions and mortgage controls have not yet been relaxed. Under such circumstances, trading disputes caused by falling housing prices are becoming more common. However, a recent notice issued by the Supreme People's Court indicates that "property protests" will be hard to obtain legal support.
Real estate disputes must strictly apply the principle of changed circumstances. Recently, the Supreme People's Court has issued a "Notice on Strengthening Civil Trial under Current Situation and Effectively Ensuring People's Livelihood," which requires: courts at all levels must properly handle real estate disputes to promote the implementation of national real estate control policies. They should stand on the height of maintaining the seriousness of law and ensuring stable and rapid development of economy and society, strictly apply the principle of changed circumstances, correctly identify the boundary between changed circumstances and normal market risks or transaction risks, improve the predictability of market behavior and the certainty and reliability of contract interests, and promote the healthy development of the real estate market.
The so-called principle of changed circumstances refers to that during the effective period of the contract, if unforeseeable changes occur due to reasons other than both parties, such as when maintaining the effectiveness of the contract at the time of its conclusion would obviously lead to unfairness, one party may request the arbitration body or the people's court to change or terminate this contract to maintain fairness.
In the view of Attorney Lin from Fujian Zhongmei Law Firm, "strictly applying the principle of changed circumstances" essentially means rarely using it. The possible reason for the application of the principle of changed circumstances is that policy changes in the real estate industry make it impossible for homebuyers to perform contracts. However, price changes caused by market fluctuations do not apply to the principle of changed circumstances because price changes are determined by market economic laws.
"Price reduction compensation" is even harder to gain support. After interviewing industry insiders and some homebuyers yesterday, we learned that most people agree with the aforementioned notice.
After October 2011, with the deepening of real estate regulation, the real estate market began to decline, and a few projects adjusted their pricing strategies accordingly.
However, most Fuzhou homebuyers believe that while housing prices in Fuzhou have indeed dropped, on the one hand, price reductions in most projects are somewhat hidden; on the other hand, the overall downward adjustment does not meet the expectations of most people. Many developers choose not to reduce prices mainly because they fear angering early buyers who purchased homes at higher prices.
In fact, since the end of last year, there have been several "property protest" incidents in the Fuzhou real estate market. For example, in Shangjie, Minhou, after a project reduced its price, some impulsive owners smashed the sales office. Some buyers even used this as an excuse to demand that the developer compensate them for the price difference after the reduction.