Background
Our clients were the developer and the trust company for an officetel pre-sale project. A purchaser applied for mediation, claiming that "at the sales consultation a staff member said the price would rise sharply around completion, so I signed — and I was deceived." The purchaser sought to unwind the pre-sale contract entirely and, on top of that, to have the developer repay the interim payment loan that had already been drawn down.
What Was at Stake
As the property market weakened, disputes seeking to "undo the contract and get the money back" were on the rise. Mediation often ends with each side giving a little ground, so there was a real risk that the matter would be wrapped up with our clients refunding part of the down payment or shouldering the loan burden. Moreover, granting an exception to one purchaser could raise fairness concerns as against the other purchasers who were performing their contracts as agreed.
How Changchun Helped
Changchun rebutted the applicant's assertions point by point. ▲ A consultation remark to the effect that "prices will rise" is a forecast and an opinion about future market values, not a "deception" as to a material fact of the transaction, and a fall in market value is a market risk inherent in the investment. ▲ Under the contract, once the interim payment has been made, the contract can only be terminated with the seller's consent, so a mere change of heart or a change in personal finances provides no ground for termination. ▲ The developer has no obligation to repay the loan on account of a purchaser's personal circumstances. ▲ Granting an exception to one purchaser alone would be unfair to the other purchasers performing as agreed and would undermine orderly administration of the pre-sale.
In the end, the applicant withdrew the entire mediation request and bore the costs of the proceeding. By responding calmly on the basis of the contract and the law rather than conceding to unreasonable demands without principle, our clients were able to close out the dispute without any burden. Outcomes depend on the facts of each case and may differ.