Unfinished construction at Yihefang, Xi’an, China has not been completed for eight years. But it finally has some hope of completion due to the “maintaining stability” policy ahead of the 20th National Congress of the Chinese Communist Party. However, the investors required each household to pay 200,000 yuan, or nearly 30.000 dollars, for “continued construction costs.” In this regard, some homeowners lamented that the investors are “drinking their blood.”
According to mainland media Tengxun, on July 22, Xi’an Side Real Estate, the investor of the Yihefang project, held an online meeting with creditors to arrange for them to vote on the “Draft reconstruction plan of Xi’an Side Real Estate.”
The draft said the home delivery scheme is expected to begin before December 31, 2022. However, homebuyers who choose to be compensated by handing over the house must offset “expenses recorded after accepting the reconstruction” before applying for a real estate registration certificate.
The draft does not mention the amount of the “incidental expense.” A home buyer surnamed Yan told Poster News that the “construction fee for continuity” was officially revealed to be 1,800 yuan or 266 dollars per square meter. Therefore, each household needs to pay 180,000 to 200,000 yuan, about 26,600 to 29,600 dollars.
The project started to be for sale in 2012, and the price at that time was about 4,500 yuan or 665 dollars/m2. According to the agreement, the house would be handed over in 2015. Although the building has been roofed, due to the broken capital chain of the project investor, construction has been suspended since 2014. In April this year, over 300 homeowners were forced to move into the unfinished buildings without electricity and water. This topic was once on a hot search list across the country.
Poster News revealed that the Xi’an government pledged to “deliver houses before the end of the year” and forced all homeowners living in unfinished buildings to move out for the construction to be continued. It is more likely that the reconstruction draft is directed by the government now.
Recently, unfinished property owners across the country have sparked a wave of suspension of home installment payments. The Beijing government therefore immediately stepped out to “guarantee the housing handover” and “protect the homeowners’ rights and interests”.
A video posted on the Internet shows the owners of Yihefang angrily scolding the investors saying “They drink our blood” and “take our money to pay off their own debt.”
Previously, some investors of unfinished construction projects in various places were reluctant to raise capital to complete the works to minimize losses. However, the “construction fee for continuity” that Yihefang asked for was huge. Even more absurd is that homeowners who have completed the handover must pay the unfinished property and this “construction fee for continuity.”
Previously, some buildings in the project have been completed and handed over. The owners have moved in. Of course, they do not want to pay more money.
In addition, many homeowners in unfinished buildings do not want to pay this construction fee for continuity.
NTDTV has compiled some comments from netizens:
Some homeowners lamented: “The house has not been completed yet for nearly 8 years. We still have to pay more money when receiving it”.
Others questioned that the real estate’s main part was basically completed. The rest was only some construction, such as electricity, water, and road surface. So the fee to continue construction of 1,800 yuan per m2 was too high.
Some homeowners say: “The investors have not kept their promise resulting in the property being unfinished for 8 years. Who can guarantee that after paying the ‘construction fee for continuity,’ they will resume construction and complete the handover at the end of the year?”
Some confused homeowners voted against the “reconstruction draft” because they were afraid that they could lose both their money and houses.
Now, the investor has notified the homeowners once again to vote on the decision and threatened the homeowners that if the reconstruction draft is not approved, the company will enter the bankruptcy liquidation process and can only pay creditors in the order specified in the “Bankruptcy Law.” Homeowners will receive the total amount of compensation but will not receive the home.
In fact, once a company goes bankrupt, it is unknown whether the “sequence” of repayment is available to homebuyers.
The Aboluowang newspaper commented: “The current direction of the matter is still unclear as the reconstruction draft has not been passed. Mainland media implied that the authorities were dragging the owners into a gamble where they would lose no matter what they chose, and the homeowners could only place a one-time bet on how to take the minor loss.