The mediation case of Sui X et al. v. XX Real Estate Development Company over commodity housing presale contract dispute
The mediation case of Sui X et al. v. XX Real Estate Development Company over commodity housing presale contract dispute
[Keywords]
civil, dispute over commodity housing presale contract, diversified dispute resolution, joint mediation
[Case summary]
Sui X et al. signed with XX Real Estate Development Company the Commodity Housing Purchase Contract, and paid the price, and the real estate developer delivered the property to them. However, the real estate developer failed to perform its obligations as set forth in the contract to handle the property ownership certificate. Since the second half of 2023, Sui X et al., who are mostly inland residents spending their wintertime in Hainan, have brought hundreds of lawsuits to the court, requesting the real estate developer pay the penalty for not handling the property ownership certificates in time. The focus of this dispute between the two parties is whether the real estate developer should pay the penalty and how much penalty it should pay.
[Mediation result]
The court when receiving case materials from Sui X et al. noticed that the cases, though enormous in number, were quite clear in facts and legal relations, and explained to them the judgement of similar cases that had taken effect, as well as the process and benefits of pretrial mediation. Sui X et al., upon learning that pretrial mediation can quickly resolve the disputes at low costs, and a judicial affirmation if obtained will turn the mediation agreement enforceable, agreed to pretrial mediation in reference to similar cases of which the judgements have come into force. The property owners agreeing to resolve disputes through pretrial mediation prevented unnecessary conflict, and effectively maintained the harmonious relations between the property owners and the real estate developer, a benefit to the community. As one of the parties is a company, and both parties were willing to resolve the disputes through mediation, the court referred the series cases via the “People’s Court Mediation Platform” to the China Association of Small and Medium Enterprises Mediation Center for pretrial mediation. The mediation center upon receiving the cases appointed a mediator to mediate the disputes. After the mediator learned about the basic facts of the disputes, the pretrial mediation team of the court explained to the mediator the judgements of similar cases, the reasoning behind the judgements, and provided guidance on the direction of mediation. As the real estate developer as involved in the case is associated to the community property management company, and the property owners have deferred the payment of property management fees for some time, the pretrial mediation team of the court guided the mediation towards the payment of penalty for late handling of property ownership certificate by offsetting the property management fees, and the penalty for late handling of the property ownership certificates should be calculated in reference to the judgement in force of similar cases. Therefore, the mediator focused his efforts on the two focal points, i.e., the calculation of the penalty, and the offset of the property management fees. The mediator then contacted the two parties, exchanged opinions, and conducted back-to-back mediation. During the mediation, the real estate developer complained it owed too much penalties to too many plaintiffs, and the burden was too much for the company to bear, so it requested a discount of 20% on the penalties calculated according to the judgements of similar cases.
After multiple rounds of negotiation in which the mediator explained in detail the judgement basis and reasoning of similar cases, and the mediation scheme’s appropriateness and viability, the two parties transformed from confrontation to mutual understanding and finally reached a voluntary mediation opinion: the community property management company is added to the case as a third party, the penalty for the late handling of the property ownership certificate, as confirmed by the real estate developer, will be used to offset the property management fees that the property owners owe the property management company, and the property owners and the property management company will make the offset calculation later; if the penalty fails to offset the property management fees as agreed, the property owners may apply for enforcement on the balance of the penalty. Step by step, the series cases proceeded to the signing of an agreement and application for judicial affirmation, a seamless transition from interconnected litigation-mediation to judicial affirmation. So far, 61 of the series cases have been successfully mediated, and judicial affirmation obtained for all these cases, and the ruling made out. At present, property owners who have signed the mediation agreement have proceeded to calculating the property management fees to offset with the property management company. No parties have applied for enforcement. The other cases are now under mediation according to the established mediation paradigm.
[Significance]
When handling these cases, the court gave full play to the vantage mechanism of “demonstration cases + general-to-general + judicial affirmation”, and effectively resolved disputes between the mass and enterprises. The court drew on the Supreme People’s Court’s “general-to-general” online litigation-mediation interface mechanism, earnestly employ the diversified dispute resolution under the “general-to-general” framework, and collaborated with professional and industrial mediation organs to resolve disputes. In the resolution of these series disputes, the court invited the cooperation of China Association of Small and Medium Enterprises, gave full play to the mediator’s professional and authoritative advantage in the industry, exploited for guidance the demonstration cases supplied by the pretrial mediation team, realized the complementation of advantages between the court and mediation organizations, and successfully resolved disputes involving the mass and enterprises before trial. The mediation, by passing to the parties the foreseeable legal consequences, guided them to resolve the conflict at a most economic manner, promoted the resolution of the community’s commodity housing disputes, established a favorable mediation guidance, and achieved the desired effect of “one case mediated, all disputes resolved.
