In recent years, the state has stepped up macro-control of the property market and introduced various loan restriction policies, which has directly led to the downturn in the property market and the soaring inventory of real estate companies. In order to take advantage of loopholes in the banking regulatory system, market entities and even real estate companies have issued down payment loans (also called down payment installments). In fact, the more depressed the real estate situation is, the more frequently down payment installments are required. In response to the recent rebound in the down payment installment phenomenon, this article sorts out the relevant policies, regulations, practices and actual cases of down payment installment to reveal the down payment installment model and its current judgment trends.

1. The definition and background of down payment installments

2. The main methods and legal provisions of down payment installments

Before 2016, down payment installments were mainly for internal employees of various real estate companies, and real estate companies directly provided loans to employees. Later, as market competition intensified, the distribution entities expanded to affiliated companies, internal employees, and intermediaries of various real estate companies, and the scope of distribution targets also gradually expanded to ordinary people who are willing to buy houses. The early model is roughly as follows:

Under this model, in many cases, real estate companies or their affiliates serve as lending entities. In order to avoid their own risks, they do not actually provide part of the loan to home buyers. , there is no real cash flow for lending, but it is generally stated in the loan contract that the loan will be issued to home buyers in the form of cash. On the one hand, down payment installments satisfy ordinary people's desire to buy a house. On the other hand, they also greatly stimulate the real estate market, causing sales of real estate companies to soar. Therefore, down payment installments were once popular among real estate companies. But at the same time, because the down payment installment increases the leverage ratio of home buyers, people who cannot afford to buy a house can easily get the down payment in violation of the loan restriction policy, which disrupts the bank's judgment on the home buyer's repayment ability and intensifies financial risks. This further amplified the real estate market bubble and made the entire market environment even more uncontrollable. Therefore, since 2016, the state has issued a series of policy documents to combat down payment loans, as follows:

On October 13, 2016, the General Office of the State Council issued the "Special Rectification of Internet Financial Risks by the General Office of the State Council" Notice of the Work Implementation Plan (Guobanfa [2016] No. 21), including the second key rectification issue and work requirements 4. Regulate the Internet "crowdfunding to buy a house" and other activities, and prohibit various institutions from carrying out "down payment loan" business. Although the "Notice" targets Internet finance, it clearly prohibits all types of institutions from carrying out down payment loan business.

On July 29, 2016, seven departments including the Ministry of Housing and Urban-Rural Development and the National Development and Reform Commission jointly issued the "Opinions of the Ministry of Housing and Urban-Rural Development and other departments on strengthening the management of real estate intermediaries to promote the healthy development of the industry" (constructed Issue [2016] No. 168). Article 1: Intermediaries shall not force customers to choose their designated financial institutions, shall not bundle financial services with other services, shall not provide or cooperate with other institutions to provide illegal financial products and services such as down payment loans, and shall not collect rebates and other financial institution fees in disguised form. . This opinion mainly regulates the behavior of real estate agencies.

On September 29, 2017, the Ministry of Housing and Urban-Rural Development, the People's Bank of China, and the China Banking Regulatory Commission jointly issued the "Notice on Regulating House Purchase Financing and Strengthening Anti-Money Laundering Work" (Jianfa [2017] No. 215), in which Article 1 prohibits illegal provision of “down payment loans” and other home purchase financing terms. (1) Real estate development companies and real estate intermediaries are strictly prohibited from illegally providing down payment financing for home purchases. Real estate development companies and real estate intermediaries are not allowed to pay down payments for home buyers or pay down payments in disguised installments, are not allowed to provide down payment financing for home buyers through any platform or institution, are not allowed to induce home buyers in any form to pay down payments through financing from other institutions, and are not allowed to organize "public crowdfunding" Raise money to buy a house. (2) Internet financial institutions and small loan companies are strictly prohibited from providing "down payment loans" and other financing products or services to home buyers in violation of regulations. Internet financial institutions and small loan companies are not allowed to provide down payment financing or related services to home buyers through online, offline or any other means

On July 9, 2018, the Henan Provincial Department of Housing and Urban-Rural Development issued the "About Further Measures" Notice on Regulating the Sales of Commercial Housing (Yuguan [2018] No. 29).

Part Three stipulates that real estate development enterprises shall not engage in the following illegal and illegal sales activities: 13. Implement "zero down payment" to buy a house, or provide illegal or disguised down payment for real estate speculators in the form of "down payment loan", "down payment installment", etc. At the same time, it is further stipulated that if there is a violation, depending on the severity of the case, the local real estate authorities will take measures such as interviewing the person in charge of the company, ordering corrections within a time limit, suspending online signing until the corrections are in place, and exposing typical cases.

The issuance of the above-mentioned documents has largely restricted the direct engagement of real estate companies and intermediaries in down payment loans. Therefore, after 2016, the operating model of down payment loans gradually evolved to be executed privately by real estate companies and third-party financial institutions. The general model is that a real estate company signs a financing advisory or financial service contract with a third-party financial institution (usually with financial qualifications to engage in lending). It is agreed that the real estate company will provide a third-party financial institution with a list of prospective customers who want to buy a house, and the financial institution will provide these customers with loans required for down payments. As consideration, real estate companies usually discount interest to third-party financial institutions in the form of financing advisory fees or service fees. The latter model is as follows:

In this model, in order to prevent home buyers from using the loan for other purposes after receiving the loan, real estate companies generally require home buyers and third-party financial institutions to transfer the loan directly to Deposit it into the company account, and then the home buyer applies for a mortgage loan from the bank after receiving the down payment to achieve the purpose of quickly withdrawing funds.

Third, the legal risks of down payment installments

Down payments have certain legal risks for real estate companies and intermediaries. This article mainly explains the legal risks faced by real estate companies.

(1) Will the "Commercial Housing Sales Contract" or "Loan Contract" become invalid due to the down payment installment?

Article 153 of 103010 stipulates that civil legal acts that violate the mandatory provisions of laws and administrative regulations are invalid. However, mandatory provisions do not invalidate civil legal acts except those.

The Civil Code (Law [2019] No. 254) issued by the Supreme People’s Court stipulates, 31. The validity of a contract that violates the rules Under normal circumstances, violation of the rules will not affect the validity of the contract. However, if the rules involve public order and good customs such as financial security, market order, national macro-policy, etc., the contract should be deemed invalid. When determining whether a rule involves public order and good customs, the people's court should carefully examine the intensity of supervision, transaction security protection and social impact on the basis of examining the objects of regulation.

Measure it and provide sufficient reasoning in the judgment document.

According to the above legal provisions, the content of a contract will be invalid only if it violates the mandatory provisions on the effectiveness of laws and administrative regulations, as well as regulations involving public order and good customs such as financial security, market order, and national macro policies. Throughout the second part of this article, the documents prohibiting down payment loans are only normative documents from government departments. Violations of the above documents do not constitute a violation of laws, administrative regulations, and rules involving public order and good customs, and cannot be used to determine down payment loans. The basis for the invalidity of the installment agreement, therefore, the "Commercial Housing Sales Contract" or the "Loan Contract" are not deemed invalid because they involve down payment installments.

However, in judicial practice, there are also a few courts that believe that the "loan contract" does not express the true intention of both parties or that the real estate company and the home buyer maliciously colluded to defraud the bank of mortgage loans, damaging the legitimate rights and interests of the bank and disrupting the down payment installment behavior. On the grounds that the order of the financial market was violated, the "Loan Agreement" was determined to be invalid, see Case (2021) Yu

0191 Minchu No. 5145, Henan Province Zhengzhou High-tech Industrial Development Zone People's Court. However, even if the "Loan Agreement" is determined to be invalid, the home buyer can still be required to return the remaining loan amount on this basis, but the liquidated damages and interest agreed in the contract will no longer be supported.

(2) Compensation risks caused by home buyers’ later cessation of supply

Down payment installments are targeted at many home buyers who do not have the actual ability to purchase a home. After purchasing a house, these loans will also be required to be repaid in several installments within a period of 1-2 years. In addition to the monthly bank mortgage payment, these excessive financial burdens can easily cause the home buyer to cut off the mortgage payment, making it When a home buyer applies for a mortgage loan from a bank, the real estate company that provides the guarantee bears the liability for reimbursement.

(3) If a private lending dispute is sued, will the lender be recognized as a "professional lender"?

Regarding the identification of "professional lenders", the "Minutes of the National Courts' Civil and Commercial Trial Work Conference" (Fa [2019] No. 254) issued by the Supreme People's Court stipulates that 53. Professional lenders have not obtained the loan in accordance with the law. Private lending activities conducted by legal persons engaged in private lending that are qualified to lend, as well as unincorporated organizations or natural persons engaged in private lending shall be deemed invalid in accordance with the law. If the same lender repeatedly engages in paid private lending activities within a certain period of time, it can generally be regarded as a professional lender. The "Notice of the Higher People's Court of Henan Province on Strictly Hearing Private Lending Cases in accordance with the Law" stipulates that lenders earn high interest by providing funds to unspecified objects in society, the lending behavior is repetitive and regular, and the purpose of the borrowing is commercial. Engaging in regular loan business without approval is an act of engaging in illegal financial business. The private lending contract signed should be deemed invalid because it violates mandatory regulations and will be treated as an invalid contract.

According to the above regulations, the identification of professional lenders must meet the characteristics of lending as a profession, having a high frequency of lending, lending funds to unspecified objects in society, and stipulating high interest rates in the loan contract. If the borrower claims that the lender constitutes a "professional lender," a very important criterion is to provide evidence to prove that the lender's lending behavior is repetitive and regular, and that the purpose of the lending is commercial or operational. However, in practice, lenders and borrowers usually have special provisions on interest in the Loan Contract. For example, unless the contract is terminated due to a unilateral breach of contract by the home buyer, the two parties no longer agree on any interest or liquidated damages. Therefore, in In this case, since the lender's lending behavior is not paid and commercial, the risk of being identified as a "professional lender" is not great.

(4) Risk of Administrative Penalties

According to Article 21 of the "General Rules for Loans" of the People's Bank of China, the lender must be approved by the People's Bank of China to operate the loan business and maintain Have a "Financial Institution Legal Person License" or "Financial Institution Business License" issued by the People's Bank of China, and have been approved and registered by the industrial and commercial administration department. However, real estate companies and their affiliated companies generally do not have the qualifications to operate loan businesses. In this case, the business of down payment loans is subject to the regulations of the People's Bank of China and the competent authorities in accordance with the above regulations and the regulatory documents of the competent authorities prohibiting down payment loans. Risk of administrative penalties.

Signing a financial service contract privately with a financial institution to designate a third-party financial institution to lend money ostensibly avoids the above risks. However, because the institutions lending money to the same real estate company are still one or several fixed institutions, both parties There is a risk of being punished for maliciously colluding to defraud bank loans and circumventing the relevant national loan restriction policies. In addition, the author has reservations about whether the state will hold real estate companies criminally responsible for illegal operations or fraudulent loans, as long as there is no large-scale supply cut-off incident that leads to financial disorder.

IV. Different models of down payment installments and their judgment rules

In practice, third-party companies generally require the borrower to bear the responsibility of returning the principal and interest of the loan on the grounds of private lending. Real estate companies will choose to demand the return of principal and interest on the grounds of private loan disputes, or demand the remaining down payment or terminate the commercial housing sales contract on the grounds of disputes over commercial housing sales contracts, depending on the circumstances. The author has reviewed some of the jurisprudence on down payment installments, combined with different down payment installment models, and summarized the following adjudication ideas. Due to the wide variety and complexity of trial practices, this idea inevitably contains omissions and generalizations, so it is only for reference.

(1) The model in which the real estate company and the owner sign the "Commercial Housing Sales Contract" and the "Loan Contract" at the same time

Judgement Overview: Under this down payment installment model, the court has two types of judgments point of view.

The first type is handled according to private loan disputes. The court believes that after the purchase price has been offset, the purpose of the "Loan Contract" has been achieved, the "Loan Contract" has been established and taken effect, and the real estate company has the right to follow the "Loan Contract" 》Advocates for principal and interest. As for interest, it can support up to an annual interest rate of 24 plus liquidated damages.

However, considering that the loan was a down payment and the plaintiff did not actually deliver the funds to the defendant, the court may reduce the interest as appropriate.

Second, since the signing of the "Commercial Housing Sales Contract" and the "Loan Contract" are usually relatively close, and there is usually no actual delivery of funds between the real estate company and the owner, the People's Court may Considering the true intention of the parties to the contract, the Loan Contract was directly deemed invalid. However, the invalidity of the "Loan Contract" does not affect the validity of the "Commercial Housing Sales Contract". Therefore, in this case, the owner has not paid the full down payment for the house as agreed. The real estate company can claim from the owner to pay the unpaid house purchase price or terminate the "Commercial House Sales Contract" based on the "Commercial House Sales Contract", pay liquidated damages, and cancel the commercial house at the same time. Contract filing and registration and notice registration.

Case 1: The "Loan Contract" reached by paying the down payment by borrowing is a true expression of intention. The developer has the right to claim arrears, interest and liquidated damages based on the "Loan Agreement".

(2019) Henan Province Xingyang City People’s Court No. 0182 Minchu No. 5733

Judgment points: This court believes that the defendant Li Dongfang purchased the house developed by the plaintiff Hanyu Company. The down payment was paid by borrowing money from the plaintiff Hanyu Company. The "Hanyu Tianyue Bay House Purchase Loan Agreement" signed by the plaintiff and the defendant was the true intention of both parties. The agreement clearly stipulated the loan amount, interest and liquidated damages. The defendant Li Dongfang failed to repay the loan as agreed, and the plaintiff Hanstar Company's request for the defendant Li Dongfang to pay the arrears of 259,000 yuan complies with legal provisions and is supported by this court.

Case 2: The "Loan Contract" is a false expression of intention, but is actually a down payment installment and should be invalid.

(2019) Yu 0105 Minchu No. 8215 Jinshui District People’s Court of Zhengzhou City, Henan Province

Judgment points: This court believes that the perpetrator and the counterparty committed the crime with false expressions of intention Civil legal actions are invalid. In this case, although the plaintiff and the defendant signed a "Loan Contract", the "Loan Contract" stipulated that the defendant borrowed money from the plaintiff in order to purchase the house developed by the plaintiff, and the loan amount was paid directly to the plaintiff. The defendant did not withdraw cash, and the plaintiff paid the defendant The installment fee is charged. It can be seen that the contract is called the "Loan Contract", which is essentially the down payment installment carried out by the plaintiff and the defendant for the purpose of buying and selling houses. The "Loan Contract" is not the true expression of the original intention of the plaintiff and the defendant. Therefore, the "Loan Contract" 》should be invalid. The plaintiff requested to terminate the Loan Contract, but this court did not support it.

Case 3: The home buyer failed to pay on time as stipulated in the loan contract. In fact, he failed to pay the full down payment for the house as stipulated in the "Commercial Housing Sales Contract". This was a fundamental breach of contract, and the developer terminated the "Commercial Housing Sales Contract" in accordance with the law. 》.

(2019) Henan 0105 Minchu No. 22660 Zhengzhou Jinshui District People’s Court

Judgment points: This court believes that the "Commercial Housing Sales Contract" signed by the plaintiff and the defendant is the property of both parties. The contract is a true expression of intention, and the content does not violate the mandatory provisions of laws and administrative regulations. The contract is legal and valid, and both parties should fully perform their obligations in accordance with the contract. Although the "Loan Contract" signed by the two parties is called a loan, its essence is that the two parties want to circumvent the state's relevant down payment policy for the purchase of commercial housing, and the loan contract does not include actual delivery of funds. In fact, the plaintiff allows the defendant to pay the down payment in installments and provide The defendant issued invoices in advance for loan convenience, and the money in the loan contract was still essentially the purchase price. The defendant failed to pay on time as stipulated in the loan contract. In fact, he failed to pay the full down payment for the house as stipulated in the loan contract. This behavior violated the provisions of the "Commercial House Sales Contract" and was a fundamental breach of contract. The plaintiff's claim to terminate the "Commercial House Sales Contract" was not inappropriate, and this court supported it. After the above-mentioned contract is terminated, the commercial housing registration and notice registration conducted under the contract shall also be terminated. After the contract is terminated, the defendant should return the house involved to the plaintiff.

(2) The real estate company signs a "Commercial Housing Sales Contract" with the owner, and the owner signs a "Loan Contract" with a third party

Referee overview:

1. If there is a transfer between the third party and the real estate company, or the payment is made in cash, the real estate company will issue a receipt.

The court will usually determine that the Loan Agreement is true and valid. In this case, the third party's direct claim to the owner for repayment of the loan and interest based on the Loan Contract will usually be supported by the court.

2. If there are no transfer records, receipts or any other proof of payment between the third party and the real estate company, and considering that the third party and the real estate company are usually related companies, the court will usually use the "Loan Agreement" 》 is a false expression of intention and is not actually performed, so it is deemed invalid.

3. Whether it is the first mode or the second mode, the real estate company can claim the unpaid house purchase price from the owner based on the "Commercial Housing Sales Contract" on the grounds of arrears in payment of the house purchase price or The "House Purchase Contract" shall be terminated, liquidated damages shall be paid, and the commercial housing registration and notice registration shall be cancelled.

Some courts will directly recognize the case where the house purchase payment is requested; in the case where the house buyer defends on the grounds that the real estate company’s down payment installment violates regulations, on the one hand, it will be difficult for the house buyer to provide evidence (in practice, the down payment installment Real estate companies generally do not provide the relevant procedures for installments to home buyers). On the other hand, some courts will determine that the loan relationship and the commercial housing sales contract are different legal relationships, and will not examine whether the down payment installment will invalidate the contract, thereby judging the purchase of a house. The buyer pays the purchase price.

As for the real estate company suing to terminate the commercial housing sales contract on the grounds of arrears of payment, there is a dispute as to whether it will be supported. When the commercial housing sales contract is valid and the home buyer has not applied for a mortgage loan, if the real estate company terminates the commercial housing sales contract as stipulated in the contract, it will generally be supported. However, when the home buyer pays part of the down payment, and the bank has issued a mortgage loan, and the paid house price reaches more than 75% of the total house price, the court will use the "Interpretation of the Supreme People's Court on Applicable Legal Issues in the Trial of Sales Contract Disputes Cases" No. Article 26 stipulates that if the buyer has paid more than 75% of the total price of the subject matter, and the seller claims to take back the subject matter, the people's court will not support the termination of the contract on the grounds that it will not support it.

Case 1: The third party accepted the entrustment to remit the loan to the developer's account. The "Loan Agreement" was established and came into effect, and the defendant should repay according to the agreed period

(2019) Yu 0191 No. 10580 People's Court of Zhengzhou High-tech Industrial Development Zone

Judgment points: The plaintiff and the defendant signed a loan agreement and agreed on the loan matters. The plaintiff provided a loan of 209,000 yuan to the defendant and was entrusted by the defendant to The above-mentioned loan was remitted to the account of Zhengzhou Huaqiang Plaza Real Estate Co., Ltd., a party outside the case. The loan relationship between the plaintiff and the defendant was established and should be protected according to law. The plaintiff has fulfilled its obligation to pay the loan as stipulated in the loan agreement, and the defendant should repay the loan within the agreed period. The defendant has not provided evidence to prove that it has actually paid off the loan. Therefore, this court supports the plaintiff’s claim that the defendant repays the loan principal of 209,000 yuan.

Case 2: Because the third party did not actually lend the loan, the court determined that the "Loan Agreement" was not established

(2019) Yu 02 Min Zhong No. 2911 Chongqing Second Intermediate People's Court

Referee's point of view: Although the respondent, as a real estate development company, wanted to borrow money from the home buyer Ding Daoshu through a third party so that he could pay the down payment of 160,000 yuan, the third party did not actually lend money to Ding Daoshu. The appeal was The person delivered a copy of the receipt for the down payment of 160,000 yuan to the appellant Ding Daoshu. The purpose was to prove to the bank that the down payment had been paid in full. In essence, the appellee issued a false down payment certificate to disguise the loan, which violated the law. The relevant provisions of the "Notice of the Ministry of Housing and Urban-Rural Development, the People's Bank of China, and the China Banking Regulatory Commission on Regulating House Purchase Financing and Strengthening Anti-Money Laundering Work" should be punished by the relevant management departments, but Ding Daoshu cannot use this copy of the receipt to prove that the down payment claimed by him has been paid. The fact of payment is established.

5. Conclusion

In practice, when the court determines the validity of the "Loan Contract", it will focus on whether the loan is the true expression of intention of the parties and whether there is actual delivery of funds. , whether the purpose of the loan contract has been achieved, etc. as the judgment criteria.

If the "Loan Agreement" is found to be invalid by the court, it will not affect the real estate company's claim for rights through the "Commercial Housing Sales Contract". The real estate company should choose to appeal for payment of the loan on the grounds of a loan dispute or a commercial housing sales contract dispute based on its own actual situation. However, it should be noted that down payment installments and disguised down payment installments are still the targets of the state’s crackdown. As the problems left over from the past continue to emerge, the possibility of the state further introducing stricter policies cannot be ruled out. Therefore, real estate companies still need to operate legally and legally. Operate according to regulations to avoid straying into the "minefield" Related questions and answers: Related questions and answers: Is there a time limit for applying for a mortgage after paying the down payment for buying a house?

After paying the down payment, the loan will be processed within one month.

1. Loan procedures:

1. First, go to the bank to understand the relevant situation.

2. Apply for a personal housing loan by bringing together the above information.

3. Then accept the bank’s review and determine the loan amount.

4. Next, you can apply for a loan contract, and the bank will handle the insurance.

5. Handle property mortgage registration and notarization.

6. The last thing left is the bank's loan, the borrower's monthly repayment and the cancellation registration after paying off the principal and interest.

2. Information required to apply for a mortgage loan:

1. Original and 3 copies of the identity cards and household registration of the applicant and the spouse (if the applicant and the spouse do not belong to the same Those with household registration must also attach proof of marriage relationship).

2. Original house purchase agreement.

3. An original and a copy of the prepayment receipt for a room price of RMB 30 or more.

4. Documents proving the applicant’s family income and relevant assets, including salary slips, personal income tax returns, income certificates issued by the unit, bank deposit certificates, etc.

5. One copy of the developer’s payment account number.

Extended information:

There are two possibilities for loan repayment when buying an off-plan house

1. After paying the down payment, go to the bank to sign a loan contract. After the developer and your information are complete, they will immediately review and approve your loan and release the loan to the developer. After that, you will start to repay the loan.

2. After paying the down payment, sign a loan contract with the bank. The developer may not prepare all the documents for bank approval until the house is capped or completed. (In this method, the developer will also require a contract to be signed first. This has two considerations: 1. The loan contract must be signed when signing the contract. , saving customers a trip.

Since the development of many commercial houses is carried out by a certain development company, and the sales are handled by another agent, therefore, when purchasing such off-plan houses, you must check the agent clearly Only those who have an entrusted sales agreement with the developer can buy with confidence. Of course, if you buy a commercial house from a development company with good reputation and strong funds, you will get a larger one-time payment discount, so that you can enjoy the benefits of the appreciation of the house.

I am Aze, a real estate guy from Qingyuan, follow me and you will have no worries when buying a house