Since the outbreak of the pandemic, more and more lawsuits have been filed in mainland China against real estate developers due to problems such as unfinished houses, quality issues, and contractual violations. However, collusion between officials and businesses, judicial corruption, make it difficult to ensure the legal rights of homebuyers.
Recently, a video obtained by Epoch Times shows that in Hangzhou Bay New Area, Ningbo, Zhejiang Province, properties developed by companies such as Country Garden, Sunac, and Greenland are vacant. These properties were delivered in 2022 but remain largely unoccupied, turning construction sites into empty spaces with significant unfinished projects.
According to the footage, these are off-plan properties with developers using land as collateral. The developers heavily hyped up Hangzhou Bay in the past, engaged in false advertising, and coupled with the impact of the pandemic, now facing a significant number of litigations. Many properties remain unsold, some incomplete, lacking any supporting facilities in the vicinity.
A search on Qichacha revealed that Ningbo Renhe Bay Property Co., Ltd. (a subsidiary of Sunac Group) currently faces 24 legal disputes, including disputes over pre-sale contracts for commercial properties, construction contracts, and subcontracting agreements. Meanwhile, Ningbo Hangzhou Bay New Area Country Garden Real Estate Development Co., Ltd. (a subsidiary of Country Garden) is involved in a staggering 476 legal disputes.
According to data from the Ministry of Commerce of the Chinese Communist Party, Ningbo Hangzhou Bay New Area is located in the north of Ningbo City, Zhejiang Province, on the south bank of Hangzhou Bay Bridge, at the center of the Shanghai-Hangzhou-Ningbo economic circle, serving as a crucial strategic development zone for the Yangtze River Delta and even the coastal region of China.
Previously a mudflat, the Hangzhou Bay area underwent significant development milestones, with the completion of the Hangzhou Bay Bridge in 2008, establishment of the Hangzhou Bay New Area in 2010, and its upgrade to a national-level economic and technological development zone in 2014. The administrative jurisdiction also shifted from Cixi to direct administration by Ningbo City.
A resident of Shanghai, Mr. Wang, shared with Epoch Times that many real estate developers flocked to the Hangzhou Bay area for development, but with the unexpected outbreak of the pandemic, an estimated 60%-80% of properties remain unoccupied. “Now even foreign investments have withdrawn. Originally, some foreign companies could have been attracted. Currently, only China Mobile and Geely are there. Geely Automobile may have a relatively larger workforce, but other industries have not entered,” Mr. Wang said.
Mr. Wang, an investor and homebuyer himself, recounted his ordeal with purchasing a property in Hangzhou Bay, Ningbo. Due to pandemic restrictions, he was unable to travel to Ningbo to sign the contract, leading the developer to accuse him of breach of contract, ultimately resulting in a wrongful judgment by the court.
In 2021, Mr. Wang’s parents came to Shanghai from Xinjiang, and during a visit to Hangzhou Bay, they reserved a villa worth over 5 million yuan. Due to Wang’s own bank card limit, his father paid a deposit of 200,000 yuan and signed a subscription agreement. However, due to delays in formal contract signing caused by the Lunar New Year holiday, online filings were needed after the holiday.
“At that time on February 2, it was during the Lunar New Year, but the developer did not provide a contract. Even after the holiday, on February 25, they still did not provide a contract, making signing impossible,” Mr. Wang explained.
In March 2021, Shanghai faced a severe epidemic situation, leading to months of city lockdown. Around March 20, Mr. Wang’s health code turned yellow, restricting his movement outside the residential area. On March 29, his residential area in Songjiang District also issued lockdown notices.
“I still wanted the property at that time. To show my sincerity, I subsequently transferred over 300,000 yuan. But the pandemic dragged on, and by May, the developer proposed contract termination. That’s when I started seeking legal assistance. The developer had no money essentially and was just bullying people,” Mr. Wang shared.
On April 26, 2022, Ningbo Sunac issued a contract termination notice, claiming that Mr. Wang had breached the agreement and thus, they terminated the subscription agreement without refunding the deposit.
By the end of 2022, due to pandemic-induced delays in property delivery, numerous homeowners discovered quality issues with their properties. As these properties were built on mudflats, they faced water leakage during rainy days, resulting in water accumulation in the underground garage, preventing many homeowners from completing the handover and carrying out renovations.
“I am in a dilemma, with one foot inside and the other outside. Others have already taken out loans, unable to pull out anymore. Down payments and monthly payments have gone down the drain, and nobody wants the properties now since prices have plummeted drastically,” Mr. Wang lamented.
However, a civil judgment issued by Cixi City Intermediate People’s Court in September 2024 ruled against Mr. Wang’s father (the plaintiff) as the buyer, excluding Mr. Wang (the plaintiff) from the property transaction, deeming Mr. Wang in breach of contract. The court disregarded the contract termination notice, setting June 11, 2024, as the termination date.
The attorney representing the case, Lawyer Dai Peiqing from Shanghai, informed Epoch Times that due to the pandemic, the developer unilaterally terminated the subscription agreement. The law stipulates that force majeure exempts liability, and hence, since the developer violated the agreement during such circumstances, they must repay double the deposit. The judge intentionally pushed Mr. Wang out of the case, eliminating the influence of the pandemic as a force majeure event.
Firstly, all WeChat messages pointed towards Mr. Wang as the buyer, with sales personnel approaching Mr. Wang for credit information and payment, instead of his father for funds. His father’s age limited his ability to secure a loan for property purchase.
If Mr. Wang were not the primary subject of the agreement, not a party to the case, the 350k yuan he paid to the developer can’t be considered in this case and should be raised in a separate lawsuit. Did the developer unlawfully benefit from this money?
Secondly, June 11, 2024, was the first negotiation between Lawyer Dai as the representative and Mr. Wang at the developer’s office. The court deemed this day as the contract termination date, despite mutual agreement that the contract had long been voided. This decision was preposterous.
“Like agreeing on a divorce two years ago, where someone suddenly claims you are not divorced, I believe you are now divorced, you (judge) have no right. To avoid dissolving the contract in April 2022 with over two years of interest, they unilaterally decided the developer only terminated the contract on June 11 this year,” Lawyer Dai elaborated.
Thirdly, the core issue was determining the party in breach. “When the lockdown occurred, the developer annulled the purchase agreement. Do they still expect us to fulfill the contract? It was them who nullified the contract. April was when Shanghai had its strictest lockdown, with some areas sealed off in late February. Shanghai lifted the lockdown on June 1, known worldwide.”
The lawyer believes that this case blatantly showcases judicial corruption, with the judge confusing the roles and subject matter. The case is currently under appeal to the Intermediate Court, hoping for a fair judgment.
“If not for judicial corruption, we would have a 100% chance of winning,” she stated. “Judging by intuition, the developer seems to be protected by the local authorities. With so many unfinished buildings, it’s as if the hard-earned money from people across the country went into this, and now they are all empty.”