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Two years after the construction of Pearl River Four Seasons City in Nanjing, Jiangsu Province was suspended, the authorities announced that the owners could return the house and get their down payment refunded. This is the first case in China where the authorities coordinated the centralized return of the house and the down payment refunded after the construction of a residential project was suspended. It is reported that under the official coordination, the developer agreed to start the return process, and the refund funds will come from the supervision account, but only the down payment will be refunded, and there will be no mortgage loan interest compensation. At present, most of the owners have signed relevant agreements with the developer.

It is tragic enough that some homeowners have worked hard to buy a house only to find that the house is unfinished. But what is even worse is that not only does the house have to be unfinished, but they also have to repay the bank mortgage loan on time, which is even more tragic. Therefore, the case in Nanjing where the owner can choose to return the house and get the down payment back has undoubtedly made many homebuyers very happy.

As we all know, honest business and fair trade are the prevailing market rules. Specifically, at the level of commodity trading, it is mainly reflected in the buyer paying the price and the merchant delivering the goods that meet the standards and agreements. If the merchant cannot deliver the goods in time, it should promptly refund the payment in full, and may also bear the buyer's interest losses. There are countless similar examples. For example, if the merchant cannot deliver the TV, air conditioner, etc. purchased by consumers on time, the merchant must return the price paid by the consumer as soon as possible. If the consumer finds that the goods are not the same as the picture after receiving the goods after online shopping, or wants to return the goods without reason, the merchant should also actively cooperate, and some platforms have also launched a "second refund" policy, which realizes the refund without the consumer returning the goods.

It can be said that "refund if no delivery" has long been the bottom line of transactions. The Civil Code clearly stipulates that the parties shall fully perform their obligations in accordance with the agreement. If one party delays in performing the main debt, the other party may terminate the contract. After the contract is terminated, the party may require the other party to take remedial measures or bear the liability for breach of contract such as compensation for losses.

Specifically in the sale of commercial housing, after the owner pays the down payment or the house price, the developer should deliver the house as agreed. If the house is delivered overdue, the developer should pay a late performance fee or compensate the owner for related losses. If the house cannot be delivered due to unfinished work, the developer should return the house price in full and compensate for the interest loss. However, this well-known and unchanging truth does not seem to work in the real estate market. The reason is that on the one hand, there are loopholes in the current mortgage policy, and on the other hand, the relevant departments have poor supervision.

In general market transaction scenarios, buyers pay sellers and sellers deliver goods, without the involvement of a third party. In the real estate market, in order to alleviate the financial constraints of a large number of home buyers who are unable to raise the full amount of housing payments in the short term, a mortgage model was introduced, whereby the owner borrows money from the bank to buy a house, but the payment is not paid directly to the owner, but directly to the developer, who then pre-registers the house to the owner. In this way, the owner becomes a debtor of the bank and needs to repay the loan to the bank on a monthly basis, while the developer receives the full payment and needs to complete construction and deliver the house on time.

In theory, this model does not pose any risk during the upswing of the real estate market. Even during the downturn of the real estate market, if the developer can ensure that the funds are fully used for real estate development rather than diverted for other purposes, it will basically not lead to unfinished housing. But the risk lies precisely here. After receiving the pre-sale funds, some developers did not use them for the development of the real estate project, but instead diverted the pre-sale funds to continue buying land for expansion. In this case, the leverage continues to increase. Once the market goes down or the capital chain breaks, the real estate project will inevitably be unfinished, and the rights and interests of the owners will not be protected at all. Not to mention that the developer can deliver the house, even a refund is basically impossible.

When the developer is unable to deliver the house, returning the house and getting the down payment back was originally a basic need and legitimate right of the owner, but now it has become a luxury. It took years of twists and turns and strong coordination from the authorities to get what they wanted, and they had to face the loss of several years of interest. But compared to those owners who not only cannot get the house but also have to repay the mortgage, this is already a blessing in disguise.

To safeguard the basic rights and interests of property owners is to safeguard social stability and the bottom line of honesty and trustworthiness. Relevant departments should take positive actions to comprehensively promote similar models, formulate more scientific and reasonable policies, strictly supervise the pre-sale funds of commercial housing, ensure that funds are used for their intended purposes, effectively prevent arbitrary misappropriation, and strive to achieve "guaranteed delivery of buildings". Even if the house is unfinished, the pre-sale funds can be used to ensure "return of down payment after house return", so that the investment of the majority of property owners can be guaranteed, at least not to fall into the worst situation of "no house and no money".

Literary l Shi Hongju