Thousands of Wuhan property owners are sweating over their payment obligation over a deadlocked real estate project. One said they have poured their entire life savings into it but have seen nothing delivered.
Chinese media outlet Daily Economic News reported on July 12 that the Hannan Times New City project in Wuhan has failed to meet its scheduled construction progress since March 30.
The developer, Wuhan Chushui Yunshan Agricultural Development Co. Ltd., said the COVID-19 pandemic in early 2020 delayed the planned timeline by 99 days. That, plus liquidity issues, meant the firm could not deliver the project for the time being.
The project would provide housing for 5,032 potential owners, including 3,500 in the first and 1,200 in the second phases. Three thousand two hundred sixty-four sets were sold as of 2019. However, many owners have been making monthly loan repayments for the property, and the prolonged stagnation makes them anxious.
Daily Economic News reported that they are taking the matter to court to demand a waiver of mortgage repayments unless the developer resumes construction on August 1.
One homeowner surnamed Li said the company has always claimed that it was resuming the project, but the opposite has happened. According to building site pictures provided by the outlet, it appears they are at the phase of installing cement formwork frames.
Li added that despite numerous attempts to engage with the appropriate agencies and businesses, they had made no real progress.
Li said because of the current economic situation, homeowners cannot afford to meet the loan repayments for a far from materializing home any longer.
One such example is Ms. Zhang, who was waiting for the completion of a home she purchased for $110,000 after a down payment of around $44,600. Instead, the monthly repayment consumed her life savings and forced her to borrow from relatives to survive.
Wang Yuchen, director of Beijing Golden Law Firm, said homebuyers should seek loan suspension by legal means. He explained that the buyer would frequently become the defaulting party if the loan were suspended without a court order or if a loan suspension agreement had not been reached. It would leave them with a bad credit profile. They may eventually face legal action or even court-ordered enforcement.