A HOMEOWNER was ordered by a Nanshan court to fulfill a home-sale contract by transferring ownership of an apartment to the buyer and pay a default fine of over 100,000 yuan (US$15,748), the Southern Metropolis Daily reported Thursday.

    The buyer signed the contract with the homeowner to buy a 74-square-meter apartment for 2.62 million yuan in Nanshan District in March.

    The buyer paid a deposit of 300,000 yuan, and both sides entrusted a bank to supervise the down payment of 490,000 yuan. The bank also promised to offer the buyer a loan of 1.83 million yuan. The apartment owner also entrusted a guarantee company to raise a mortgage for the apartment.

    The homeowner’s lawyers sent several letters in June to urge the buyer to pay or complete the mortgage procedures. At the end of June, the homeowner terminated the contract with an excuse that the buyer had delayed the transaction.

    After the government introduced policies to stimulate the housing market in March, home prices in Shenzhen skyrocketed.

    Many homeowners agreed to sell their apartments, but found that the value of their property had risen so much that they could make more money by breaking their sales contract — perhaps paying a small penalty — and selling the apartment at the higher market value.

    The buyer took legal action against the homeowner, asking for the fulfillment of the contract, as well as payment of a default fine.

    The Nanshan District People’s Court on Wednesday ordered the owner to transfer the apartment to the buyer. The ruling noted that the buyer had fulfilled his obligations, but the homeowner had terminated the mortgage procedures and was responsible for breaching the contract.

    The court made this ruling partly because the buyer is eligible to purchase the apartment and agreed to make a lump sum payment instead of buying the apartment on mortgage.

    A Shenzhen Intermediate People’s Court judge had said earlier that the court usually upholds the contract under such circumstance, as the transaction is easier without complicated mortgage procedures.

    The homeowner also had to pay the default fine for breaching the contract for three months, about 40,000 yuan per month, while court fees and other legal expenses of 18,000 yuan will also be paid by the owner. It is the first time a court made a homeowner pay the full default fine as punishment. (Zhang Yang)