China Consumers Association comments on unfair format clauses in the housing sector involving leasing and property.
Cctv newsOn September 21st, China Consumers Association released a series of comments on unfair format clauses, inviting lawyers from the lawyers group of China Consumers Association to comment on the top ten unfair format clauses in commercial housing sales, leasing, decoration, property and other related fields that consumers strongly reflected.
Typical terms: Before the formal pre-sale agreement is signed, if it cannot be sold due to the seller’s reasons, the seller is not bound by any agreement and only needs to refund the deposit without additional interest or compensation.
Comments
According to the Civil Code, when the party receiving the deposit fails to perform the obligations stipulated in the contract, it shall not only return the received deposit to the payer, but also compensate the payer for the same amount of deposit, that is, double the deposit.
The provisions of this standard clause completely evade the legal responsibility of the operator for non-performance, which is very unfair to the property buyers and violates the legal provisions.
02. When the commercial housing sales contract is inconsistent with the advertising content, the publicity will be regarded as an invitation to bid to evade responsibility.
Typical terms: when signing this contract, the buyer has made a comprehensive and detailed understanding through on-site inspection and procedures of consulting relevant documents, and the seller has no false or misleading promises and statements, so the buyer voluntarily purchases the property. The model house, publicity materials and real estate advertisements seen by the Buyer on the spot are only used as an invitation to offer, not as the contract basis for the Seller to deliver the house to the Buyer, and the contents of this contract shall prevail.
Comments
When consumers buy commercial housing in the sales office, sales advertisements and publicity materials such as sales brochures, real estate models and model houses carefully produced by developers will have a great impact on consumers’ purchase decisions. Developers make explanations and promises on commercial housing and its ancillary facilities in sales advertisements and publicity materials to attract consumers to sign up for purchase.
According to the Civil Code "Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Laws in the Trial of Disputes over Commercial Housing Sales Contracts", the contents of commercial advertisements and publicity meet the conditions of the offer, which constitutes an offer. The developer has no right to unilaterally stipulate in the contract that advertisements and publicity materials do not constitute the contents of the contract. When the advertisements and promotional materials for selling houses constitute an offer, even if they are not written into the contract, the developer should fulfill the relevant obligations. If they are not fulfilled as agreed, it will constitute a breach of contract.
03. The seller has the right of final interpretation, excluding the other party’s rights and exempting himself from responsibility.
Typical terms: unless otherwise specified, the drawings, materials, advertisements and so on provided by the seller to the buyer during the process of selling the house are for the buyer’s reference only, and shall not be regarded as the terms of the contract, and the seller has the final interpretation right.
Comments
According to the Civil Code "Measures for Supervision and Handling of Contract Violations", the standard clauses should fairly determine the rights and obligations of both parties, and when there are different understandings of the standard clauses, they should be interpreted against the party providing the standard clauses.
If the standard terms unreasonably reduce the responsibilities of the provider of the standard terms and exclude or restrict the rights of the other party, the terms are invalid.
04. Expand the application scope of force majeure, and exempt the delay in delivery.
Typical clauses: If the commercial house is not delivered to the buyer for use within the time limit stipulated in the contract due to design adjustment, climate change and other reasons, the seller shall not be liable for breach of contract.
Comments
According to the Measures for the Administration of Commercial Housing Sales in the Civil Code, this clause is an abuse of force majeure. Force majeure is an unforeseeable, unavoidable and insurmountable objective situation. Design adjustment and climate change are not force majeure, but factors that should be fully considered before construction. If the operator fails to deliver the house on time due to design reasons, it shall be a breach of contract and be liable for breach of contract.
05. After the expiration of the house lease, direct transactions between consumers and house owners are restricted.
Typical terms: Within three months after the lease expires and the contract is terminated, Party A (the lessee) shall not make a transaction with the property owner of the house on its own, otherwise it shall pay 200% of the monthly rent to Party B (the intermediary agency) as compensation.
Comments
Consumers enter into a lease contract with the owner of the house through an intermediary, and have paid the intermediary for the opportunity to enter into a contract or the media service to enter into a contract, and the contractual purpose of the intermediary has been realized. After the lease term expires and the contract is terminated, consumers have the right to negotiate directly with the owner of the house to conclude the lease contract again, which does not belong to the situation of using the trading opportunities or media services provided by the intermediary agencies to bypass the intermediary agencies and directly conclude the contract as stipulated in Article 965 of the Civil Code, and the intermediary agencies have no right to restrict it, let alone ask consumers to pay remuneration, liquidated damages or compensate for losses.
06. There are problems in decoration construction, and the material cost is passed on to consumers.
Typical terms: During the renovation period, the materials purchased by Party A (consumers) shall be constructed by Party B (decoration company). If there are quality problems caused by Party B’s construction, Party B shall be responsible for the labor costs during the warranty period, and Party A shall be responsible for the materials.
Comments
In the process of decoration, after quality problems caused by construction, it is often necessary to dismantle part or all of the original decoration materials for re-construction. During the demolition process, the original decoration materials will be partially or completely damaged. The materials purchased by consumers belong to their own property, and the losses caused to consumers due to the unqualified construction quality of operators shall be borne by the operators. This clause lightens the responsibility of the operator and belongs to the unfair format clause.
07. The setting standard of liquidated damages is too low, and the default cost of operators is small.
Typical terms: If the construction party violates the contract and the project is overdue, it shall pay liquidated damages to the consumer in RMB 20 yuan every day.
Comments
According to the Civil Code, the establishment of liquidated damages should be based on the principle of making up for actual losses. The amount of liquidated damages agreed here is low, which obviously cannot make up for the actual losses caused by the inability to move in in in time (such as extending the lease term and increasing the lease cost), which is suspected of excluding consumers’ right to claim the liability for breach of contract and reducing the operator’s liability for compensation.
08. Treat the advance payment as deposit or liquidated damages, and no refund will be given when the contract is terminated.
Typical terms: If Party A (consumer) unilaterally terminates the contract except for force majeure, Party B (operator) will not refund the advance payment that has been paid; If this causes losses to Party B, Party A will bear all the losses of Party B..
If Party A (consumer) breaches the contract, the payment made by Party A will be compensated to Party B as liquidated damages.
Comments
Advance payment is not a deposit in the legal concept, and the stipulation in the contract terms that if the consumer terminates the contract, the paid advance payment will not be refunded can not be applied to the "deposit penalty". The operator unilaterally stipulates that when the consumer terminates the contract, he will not refund the paid advance payment or compensate the operator for the delivered money as liquidated damages, which is an unfair format clause that aggravates the consumer’s responsibility. In addition, when the contract is terminated and the liability for breach of contract is assumed, the liquidated damages should not exceed a reasonable amount.
09. Property management companies charge management fees but do not bear civil liability for failing to fulfill their management obligations.
Typical terms: The property service enterprise’s management of vehicles under this agreement only refers to the management of the driving and parking order of vehicles, and does not undertake the obligation of keeping vehicles. In case of property losses such as vehicle damage, loss, property theft, or personal injury or death, the responsible party shall bear criminal or civil liability, and the property service enterprise shall not bear the responsibility.
Comments
According to the Property Management Regulations, property service enterprises should fulfill their legal or agreed reasonable management obligations when collecting parking fees from owners. This clause stipulates that the property service enterprise shall not bear any reasonable responsibility for property losses or personal injuries such as vehicle damage and loss, property theft, etc. in the property management area, and it belongs to the property service enterprise to be exempted from its own responsibilities and legal obligations.
10. In addition to the property management fees, the owners are required to share the public expenses.
Typical terms: The comprehensive property service fee does not include public energy consumption fees such as landscape water system, and the water and electricity charges for the operation of landscape water system are shared according to the actual consumption.
Comments
According to the Regulations on Property Management and the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Laws in the Trial of Property Service Disputes, the property management area should include public facilities and sites in residential areas such as landscapes. Therefore, the water and electricity costs such as greening and maintenance, garden pools and fountains in the property management area should be charged in the property management service fee and should not be allocated to the owners.