A HOMEOWNER who allegedly violated the sale contract for her apartment in Bao’an District was taken to court Monday by the buyer, who is seeking a forced transaction of the apartment from Bao’an District People’s Court, the Southern Metropolis Daily reported yesterday.

    This is the first lawsuit of its kind to be heard in Shenzhen since March 30, when the Central Government adopted a series of policies to stimulate the real estate market, resulting in the rapid growth of home prices in the city.

    Many homeowners in Shenzhen have reportedly refused to fulfill their contracts after seeing home prices rise rapidly in recent months.

    Official figures showed that Bao’an District People’s Court received 705 lawsuits regarding real estate disputes in the two months from March 21 to May 21, an increase of more than 108 percent over the same period last year.

    The plaintiff, surnamed Zhou, accused the homeowner, identified by her family name Lu, of breaking their home purchase contract, because home prices grew rapidly after the apartment sale was finalized with a contract, the court heard.

    Zhou sold her original apartment in Longhua New Area on March 10 and bought Lu’s apartment in Bao’an for 1.795 million yuan (US$289,516) March 28, when they signed the purchase contract.

    On the same day, Zhou paid Lu 35,000 yuan as a deposit, as required in the contract, which also stipulated that Zhou must pay off the apartment’s down payment within 60 days of the signing of the contract.

    Lu was obliged to hand over the apartment to Zhou on the day she received the down payment. Lu was also required to complete the ownership transfer of the apartment to Zhou within three days of Zhou producing her bank’s mortgage contract.

    According to the newspaper, the two parties signed an escrow agreement in the Xinghe subbranch of the Industrial and Commercial Bank of China on April 30. Zhou deposited 510,000 yuan as the down payment into the bank as required in the agreement.

    Zhou alleged that Lu refused to provide her bank account to receive the 510,000 yuan after seeing that home prices had grown substantially since they signed the purchase contract. Lu’s refusal has produced an obstacle for the bank to process Zhou’s application for a commercial loan for the apartment, according to Zhang Maorong, Zhou’s lawyer.

    Lu rebutted the accusations, saying that it was Zhou who failed to fulfill the contract in the first place, the Daily said.

    Shao Qiuhong, Lu’s lawyer with the Guangdong Shenping Law Firm, told the court that Zhou didn’t pay the down payment as required in the contract. Neither did Zhou obtain a bank loan within the required time nor pay off the rest of the payment to buy the apartment, Shao said.

    The hearing continues.

    (SD News)