Chain second-hand house transactions fall into a transfer deadlock; court ruling: the party paying the remaining balance can proceed with the transfer step by step

Buying a house and moving in is originally a joyful event; however, Mr. Ma, a resident of Changchun, encountered a troublesome issue during the house purchase process. The reason is that this property changed hands twice, and although he paid in full, he was unable to transfer the ownership for a long time. The first owner refused to handle the transfer because the second owner had not paid the remaining balance, and the second owner claimed that the property rights had not been properly registered, causing delays in the transfer. Recently, the People’s Court of Luyuan District, Changchun, heard this house sale contract dispute, clarifying that both sales contracts are legal and valid, and ruling that the transfer obligations must be fulfilled step by step according to the transaction chain.

According to the presiding judge, a few years ago, Jiang signed a “Second-hand House Sale Contract” with Sun, agreeing that Sun would purchase a house in Nong’an County for 320k yuan, paying the purchase price in three installments. If the payments were not made as agreed, the paid amount would not be refunded, and the transfer would not be processed. After signing the contract, Jiang delivered the house, but Sun still owed 100k yuan, and the property rights were not transferred. Two years later, Sun resold the house to Mr. Ma for 500k yuan without obtaining ownership, and Mr. Ma paid the full amount in one lump sum and moved in. However, because the house was still registered in Jiang’s name, the transfer could not be completed. After multiple unsuccessful negotiations, Mr. Ma sued Jiang and Sun to the Luyuan District People’s Court, requesting confirmation that the house ownership belonged to him and asking the defendants to assist with the transfer.

During the trial, the three parties each argued over the transfer obligations and contract performance. Plaintiff Mr. Ma claimed that he had paid the full purchase price and was in actual possession of the house, and that Jiang and Sun, as the previous and subsequent parties in the transaction, should jointly assist in completing the transfer. Defendant Jiang argued that he had no direct contractual relationship with Mr. Ma and had no obligation to assist with the transfer; Sun had not paid the remaining 100k yuan and had not obtained the right to dispose of the house, so his resale was an unauthorized act. Mr. Ma could only claim a debt from Sun and had no right to directly confirm ownership. Notably, Jiang had previously sued Sun over the remaining payment in a local court, which ordered Sun to pay 100k yuan plus interest and court fees, but the enforcement had not been fulfilled. Defendant Sun stated that the failure to transfer was due to incomplete property registration at the time of purchase, and since the house had been delivered, it should be directly transferred to Mr. Ma.

The court held that the two “House Sale Contracts” signed between Jiang and Sun, and Sun and Mr. Ma, reflected the true intentions of all parties, did not violate mandatory legal provisions, and were valid. These contracts constitute a typical chain of house transactions. According to relevant real estate tax regulations in China, second-hand house transactions require the payment of deed tax, personal income tax, and other taxes. Allowing Mr. Ma to directly request Jiang to transfer ownership could lead to tax evasion and hinder the exercise of the state’s tax collection authority. Therefore, in chain transactions, transfer obligations should be fulfilled step by step along the transaction chain, and skipping intermediate steps to transfer directly is not permitted. Jiang and Sun’s contract did not specify the order of payment and transfer; both parties should perform their obligations simultaneously. Until Sun has paid the 100k yuan confirmed by the effective judgment and related costs, Jiang has the right to refuse assistance with the transfer, and this right of defense is legitimate. The house in question is still registered in Jiang’s name, and Mr. Ma only has a contractual debt claim; he has no right to directly claim ownership. Therefore, the court did not support Mr. Ma’s request to confirm the house belongs to him.

The court ultimately ruled that the “House Sale Contract” between Sun and Mr. Ma is valid; after Sun fulfills the payment obligations confirmed by the effective civil judgment, Jiang shall immediately assist Sun in changing the property registration to Sun’s name; after obtaining ownership, Sun shall immediately assist Mr. Ma in handling the transfer of ownership.

Here, the judge reminds that in chain house transactions, “only delivering without transfer” can easily lead to ownership disputes. Buyers should verify the property rights status and the performance of previous transactions before signing contracts, and clearly specify the order, timing, and breach responsibilities for payment and transfer to avoid disputes over defense rights caused by unclear agreements. After the transaction, the property rights registration should be completed promptly to ensure the change of rights takes effect, and taxpayers should fulfill their tax obligations according to law to prevent tax issues from delaying the transfer process.

Changchun Evening News Media Reporter Hou Dan

Editor: Li Zhuang

Preliminary Review: Liang Shuang

Re-Review: Cao Guangyu

Final Review: Zang Li

【Source: Changchun Evening News】