Beating the edge and selling houses to avoid supervision of some commercial projects in Beijing.

In recent years, with the housing and construction departments stepping up efforts to rectify the chaos in the real estate market, the illegal sales behavior in the market has greatly improved. However, the People’s Daily reporter found that some developers still have problems such as disguised illegal sales and curve evasion of supervision.

Especially at the second anniversary of the implementation of Beijing’s commercial purchase restriction policy, some commercial projects still sell houses "out of shape" by handling shell companies, changing legal persons into buyers after registering company qualifications in advance, and initialling contracts with unqualified consumers, which violates the original intention of regulation and control and makes buyers face chain risks.

Initial the contract before the social security is full

Recently, the reporter walked into the sales office of a project located at the intersection of Binhe Middle Road and Tonghu Street in Tongzhou District as a buyer. The salesperson introduced that its main apartment type is a 77-111 square meter hardcover two-bedroom and three-bedroom business apartment, which can be purchased in the name of an individual who meets the qualification of buying a house in Beijing, and the down payment is 50%. The salesperson also said: "Most of the people who buy our projects are used for investment and are optimistic about the future development of Tongzhou."

The project is under construction. (Photo by People’s Mesh Haili)

However, when the reporter asked how to deal with the continuous payment of social security in this city for less than five years, the salesperson gave this answer: "If there is only one year left in social security, you can first sign the contract, you can pay the money normally, and then sign it online after the social security is enough. Some of our customers have done this before."

Regarding this kind of behavior, the staff of the Beijing Municipal Commission of Housing and Urban-Rural Development said in a conversation with reporters: "We only recognize transactions that meet the relevant requirements. In this way, buyers need to bear greater risks and should be carefully distinguished."

Lawyer Ma Yuzhen, a real estate lawyer of Beijing Longan Law Firm, believes that such an operation is risky for buyers. Before the house is officially traded, the payment for the house can’t really lock the house, which is a test of the developer’s credit. Moreover, once the performance fails, if the restrictions on breach of contract initialed by both parties are not detailed enough, or the developer’s return of funds is not smooth, it is easy to cause two-way losses of housing and funds.

Regarding this kind of policy-dodging practice, Zhao Xiuchi, vice-president and secretary-general of Beijing Real Estate Law Society and professor of capital university of economics and business, also said that developers evaded the purchase restriction policy, disrupted the market order, increased the risk of the real estate market, and provided opportunities for some speculators, which was not conducive to the realization of the positioning of "staying in the house but not speculating" and the stable and healthy development of the real estate market.

Selling in disguised form without pre-sale certificate leads to the problem of handing over the house

Four years after the million-dollar purchase price was paid, more than 80 owners of Jingxi Jingyuan Project in Shijingshan District, Beijing, are still empty-handed in the puzzle of "disguised unlicensed sales" of developers, among which, the responsibility determination of the Customized Development Agreement signed by both parties has caused controversy.

According to public information, the project development company of Jingxi Jingyuan is Beijing Jingxi Jingrong Real Estate Co., Ltd., which is an absolute holding subsidiary of Greenland Group.

"Since May 2015, each of us has paid one or two million house purchases. At that time, the sales staff promised to hand over the house by the end of 2015. After four years, we still can’t get the house." Lin Qiaoqiao, the owner of Jingxi Jingyuan, and her "prospective neighbors" told reporters that they learned from the sales staff and the filing information of the Beijing Municipal Commission of Housing and Urban-Rural Development that these vendors did not get the pre-sale certificate, and they did not apply for the property right certificate after the house was completed, which made it impossible to sign the house online.

The unfinished business of Jingxi Jingyuan. (Photo by People’s Mesh Haili)

People’s Daily reporter visited and found that at present, the two limited houses in Jingxi Jingyuan have been delivered to the residents, but the bottom business sold by the project is vacant. The staff of the Housing Construction Committee of Shijingshan District confirmed on the phone that the bottom business of Jingxi Jingyuan does not have a sales license, and it is currently in the state of an existing house. If it is to be handed over, it is necessary to apply for a property right certificate first, and then apply for an existing house sales record.

In this regard, the Beijing-Tianjin-Hebei Business Department of Greenland Group replied to the reporter that the project was sold in the form of customized development in 2015, and the completion record was completed on September 13, 2017. The estimated commercial delivery time is November 30, 2017, but due to 2017. On September 1, the government introduced a new commercial policy for affordable housing projects. Therefore, it is necessary to complete the supporting handover before proceeding with the following procedures: actually measured record-actual forecast correspondence-completion adjustment-land price verification letter-title registration survey-large property certificate-cash transfer-small property certificate, etc. There are many supporting houses for the project, and the procedures are cumbersome and complicated, and the handover procedures progress slowly, which has a serious impact on cash transfer and delivery. At present, it has been processed to the stage of ownership investigation.

Similarly, the sale of commercial properties without pre-sale permit in the form of customized development occurred in the Greenland Global Cultural and Financial City project, which is 8 kilometers away from Jingxi Jingyuan, and the project was also developed and constructed by Beijing Jingxi Jingrong Real Estate Co., Ltd.

The buyer Zhen Cheng ‘an showed reporters some Customized Development Agreements of more than 90 rights-defending owners. The agreement showed that it was signed in July 2015. However, according to the information of official website of Beijing Municipal Commission of Housing and Urban-Rural Development, the pre-sale permits for Greenland Global Cultural and Financial City project were all obtained in November 2015 or later, and the underground business of Building No.3 purchased by Zhen Cheng ‘an in July 2016 was not included in the pre-sale.

Customized Development Agreement signed by some buyers and Beijing Jingxi Jingrong Real Estate Co., Ltd. (Photo courtesy of the purchaser)

The relevant staff of the Housing Construction Committee also confirmed that the houses that the owners defended their rights did not obtain the pre-sale certificate at the time of payment. In response, Greenland said that the "Customized Development Agreement" signed with the purchaser is not used as a sales basis.

The content of the agreement shows that the purchaser pays the corresponding deposit to the developer, which will be converted into the amount of house payment later, and each customized development agreement stipulates the delivery time of the house. The above-mentioned agreement signed in July 2015 stipulates that the delivery time of the house is June 30, 2017.

Regarding the definition of illegal sales behavior, the Notice on Further Strengthening the Supervision of the Real Estate Market and Improving the Pre-sale System of Commercial Housing issued by the Ministry of Housing and Urban-Rural Development in 2010 pointed out that real estate development enterprises are not allowed to pre-sell commercial housing projects without pre-sale permission, and they are not allowed to subscribe, book, line up numbers, issue VIP cards, etc., or collect fees such as deposits and reservations in disguise from buyers, and are not allowed to participate in any exhibition activities.

In June 2018, the Ministry of Housing and Urban-Rural Development, together with seven ministries and commissions, once again stressed that before obtaining the pre-sale permit for commercial housing, real estate development enterprises collect deposits, reservations, numbers, cards and other fees from buyers or in disguised form, which are illegal and illegal.

Ma Yuzhen pointed out: "The Customized Development Agreement is a new sales method for developers to avoid the invalidation of the contract without obtaining the pre-sale permit, which belongs to the legal edge ball." He said that although the content of the agreement bypasses the relevant provisions of the pre-sale permit, it is indeed the true intention of both parties and does not violate the mandatory provisions of laws and administrative regulations. It should be valid and an appointment contract.

He further pointed out that if the disputed house does not meet the performance conditions of house transfer, the owner can terminate the Custom Development Agreement according to the terms of the contract and ask the developer to bear the liability for breach of contract. If the liquidated damages are lower than the actual losses, it may be required to increase the amount of liquidated damages (the developer shall bear the corresponding liability for contracting negligence if he knows that he cannot transfer the ownership).

Ma Yuzhen reminded consumers that when buying a house, we must look at whether the five certificates of the project are complete and whether the project is consistent, and judge the qualifications, reputation, reputation and risk prevention ability of the developer. At the same time, we should pay attention to the relevant policies issued by the state, and don’t listen to the rhetoric of sales staff one-sidedly.

"At the same time, we should also look at the terms of the contract in detail to identify whether there are sales models and terms that evade the law in disguise. Don’t pay a large sum of money without signing a formal sales contract, otherwise the default situation will be complicated and high-risk. " Ma Yuzhen said.

Agency companies evade the qualification of buying houses.

On March 26, 2017, the new policy of commercial projects issued by Beijing prohibited the sale of commercial projects under construction to individuals. The purchase restriction policy has strengthened the office attributes of commercial projects and strictly controlled the purchase qualifications, which has led to the rapid cooling of the Beijing commercial market and weakened the investment attributes.

However, some business-run projects still evade supervision by "scratching the ball", and the practice of developers acting as agents for company qualifications has appeared in the market. Some projects even registered a number of companies in advance, and finally avoided the purchase restriction requirements for buyers by changing their legal representatives.

"Many customers are qualified to buy houses by registering new companies. Our purchasing department has a team responsible for this matter, and the cost is about 10,000 yuan." The sales staff of the sales office of Greenland Global Cultural and Financial City told the reporter that the unsold houses of the project can be accepted by stages. After the down payment is 50%, the remaining house payment can be paid in one year.

In fact, this mode of operation often occurs in the Beijing commercial market after the purchase restriction. Tongzhou R&F Canal No.10, Fuhua Land World Overseas Chinese Business Center, Chaobei 8080 and other projects all promised to have the channel recommendation for handling company qualifications in the reporter’s earlier visit: "The agency company has a cooperative relationship with many projects of the developer, and it takes about 20 days to register the company."

Many real estate agents who live in new houses told reporters that there are still developers who are selling commercial houses, and there are generally channels for handling company qualifications.

A consultant also calculated an account for the reporter. The maintenance cost of buying a business-run house as a company includes: 3,600 yuan in tax declaration, 0.84% of the total house price in property tax and land use tax, and the minimum amount of 3,500 yuan *12*1.7% in employment security for the disabled. If it is resold, it is also required to pay 6% value-added tax on the value-added part of the house payment and 20% personal income tax on the market value difference of the company. Take a commercial house with a price of 2 million yuan as an example. If the regional guidance price is 3 million yuan after 5 years, the cost of holding and transferring it will be 362,700 yuan.

Another way to avoid the purchase restriction is to change the legal representative of the company registered in advance. When the reporter asked the consultant of Juli New House as a buyer about the purchase of the first Xiyue Bay in Fangshan District, the other party said, "Like the first Xiyue Bay project, they have already helped you to handle the company well, and each house is hung under a different company name. By changing the legal representative of the company, the corresponding house will also be classified under the name of the purchaser." Subsequently, the sales staff of the first Xiyuewan sales office also confirmed this statement to reporters.

In this regard, the reporter called the relevant person in charge of the Shoukai Renxin Fangshan Company, which is responsible for the sales of Xiyuewan project. The person in charge responded that the sales online signing of Xiyuewan project has been completed, and the current sales behavior of the project has nothing to do with the shares of Shoukai. Previously, there were non-Shoukai personnel who illegally sold Xiyuewan houses in the name of Shoukai.

However, the above-mentioned residential new house consultants and sales staff of the sales office told reporters that it is necessary to sign a contract with the first opening to buy a house in Xiyuewan from their channels.

Zhang Zhitong, director of Beijing Jingrun Law Firm, reminded that the purchase, holding and transfer of commercial property with enterprise qualification need to bear significantly higher tax costs than those that individuals need to bear when purchasing, and the transfer of commercial property also needs to ensure that the other party has company qualification, which leads to sales problems. Buyers should pay attention to the general ledger.

The marketing manager of a large real estate enterprise in Beijing told reporters, "The risk of this kind of practice lies in whether the government will approve and supervise the enterprise qualifications of the buyers for a long time. After all, the red line of the commercial attributes of commercial projects cannot be crossed." (The owners involved in the article are all pseudonyms)　

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