A Chinese man bought a flat on the 34th floor of a new building. Four years later, he discovered the building only had 32 floors.
The man, surnamed Shen, is from Shaanxi province in northwestern . In 2013, he purchased a 90-square-metre unit in a village near Xian.
He paid 2,646 yuan ( ₹37,234*) per square metre, roughly a third of average local prices, according to the South China Morning Post. The discount existed because the flat carried limited property rights.
Limited property rights is an informal term in China for grey-market housing. Such properties are built illegally on collectively owned rural land. They cannot be resold and have no legal protection. Buyers accept these risks because the prices are significantly lower, SCMP reported.
Shen paid an initial deposit of 117,700 yuan ( ₹16.5 lakh*) to the developer in 2013. The developer assured him that the necessary certificates would follow.
In practice, illegal properties cannot legally obtain those certificates. The signed contract promised delivery of the flat by 2015.
Shen returned to his job in Beijing and waited. The building was not completed by the agreed date. In 2017, the developer contacted him to request the remaining payment. Shen said he would pay upon receiving the keys.
Months later, the delivered unexpected news. The building where his flat was located had only 32 floors. They initially offered him a flat on the 32nd floor as a substitute.
Shen could not pay the outstanding balance at that moment. Two months later, they informed him that the 32nd-floor flat was no longer available.
Shen applied for a refund. The developer claimed they had no funds and asked him to wait. In 2020, they returned 20,000 yuan ( ₹2.81 lakh*). In 2022, they paid a further 50,000 yuan ( ₹7 lakh*). After that, they stopped responding to his calls entirely.
Shen sought arbitration through the Xian authorities. The arbitration commission ruled in his favour. The developer was ordered to repay the outstanding 47,700 yuan ( ₹6.71 lakh) from his deposit, plus 27,000 yuan ( ₹3.80 lakh) in interest. The ruling also imposed an additional penalty of 47,000 yuan ( ₹6.61 lakh) if the developer failed to comply.
As of May this year, Shen had still not received the . He pursued the matter through the local court. The court issued a consumption restriction order against the developer. However, the developer had no savings or registered property to their name. Enforcement remained impossible.
Social Media Reaction
The case attracted significant attention on Chinese social media. Many users highlighted the dangers of buying grey-market properties.
“Flats with limited property rights are cheap, but have many problems. The man is unlucky, but there is no way to help him,” SCMP quoted one user as saying.
“I would need to spend the same amount of money on renting a flat, and will still not own my flat in a decade,” commented another user.
*INR conversions are in accordance with today’s exchange rate
