Did anyone hear about the Tian Jiao Bei Lu scam in the North? A Chinese couple we know and hundreds of other families are being told that the 60.000-100.000 kuai deposits they paid more than 2 years ago for apartments now are void because the real estate developer has decided to raise the price from 4000 pr sqm to 7000, regardless of the contracts made, here a couple of months before the apartments were to be handed over.

Currently it seems that the many families are caught in a limbo in Chinese "law" and that they even have a hard time finding lawyers willing to take their cases. As I see it, if the RED is allowed to do something like this out of pure greed while disregarding legal contracts, who would ever want to pay deposits up front ever again? It's one of the major sources of income for the developers during construction after all. Anyway,, it's a warning to everyone thinking of investing in property in the pre-construction phase as well as during it. Anyone with more information about this?

I forgot to mention there was a big demonstration at their offices last week and that the riot police had to break it up. If something like this is allowed to happen I imagine the hundreds of other developments under construction and the developers behind them will try to pull a similar stunt.

Ahhh Danmairen, but you are forgetting the even greedier buyers who are looking for a quick buck by speculating on houses.

Things aren't as simple as it seems. Here's the quick low down. Two years ago when they started the whole project, they allowed potential buys who are interested to put a security deposit which gives them the rights to first selection on the houses once it is compete. The buyers were under the impression that they would be able to purchase the house at an average of 4000/m2 which was a couple of hundred yuan cheaper than the market at the time. Why where they under this impression? Because that's what was advertised on all the billboards and pamphlets handed out by the developers. Unfortunately, this was not stated on they contract they signed nor was there any price guaranteed when they forked over the deposit. The contract merely stated that the buyers are given first option to purchase the house at a discount of 2% off of the offering price. If the buyer wishes not to purchase the house then they are able to get back their deposit without interest. And hence this is why no lawyers have taken on their case because legally the developers have their bases covered.

Now, I'm not taking the side of the developers, but the buyers aren't completely innocent either. They didn't want to miss out on an opportunity that was too good to be true, which in this case turned out to be the case. The real "victims" in this sad story isn't these buyers who are now only faced with a missed opportunity to make tens of thousand of yuan speculating on these house, (most of them already have multiple houses and are only looking to invest), but the villagers and peasants who were force relocated by the government off the land with scant compensation.

The way I see it is, when you buy a Rolex from a guy who's selling watches hiding in his jacket and after going home to discover it isn't a real Rolex, you have no one to blame but yourself.

My wife wanted to maybe buy an apartment there and I said I don't want to live far from the Bus Stop Station so we bought a small apartment in He She Shi Jie. Thank God! Although some people buy apartments as investments instead to live in it, I think that something fishy is definitely going on with not just that development but with other building that are going up. There was another development that was in the news that they did the same thing. So terrible!

Tonyad. Seems to me that you are just retelling the official story from the developers (and I guess the local government). You probably have some truths but I can't really see how you are able to point every single buyer out as a greedy profiteers. That's wildly unfair. Our friends are a young Chinese couple who got married two years ago, and they spent all the money they had to come up with the deposit, money they could have spent on another, older, apartment which would have increased almost 10 percent in value. Instead the developers took their money as an interest free loan and left the two in a situation now that has made it very difficult for them to buy anything at all. Two years ago my girlfriend and I went to that place's sales offices to browse -we live nearby, nothing serious- and the people there never even hinted that the prices they gave could be changed at will but only that the small discount they could offer at the time was because of the two year wait and because of the deposit being used to finance the project. Fact: People got lied to big time in this deal.

As to the villagers who lived there before. I expect the developers handing them a solid post-compensation now that the apartments can be sold for a lot more. No?

Danmairen, You are right on the money with your comments. Remember as I said before, this deception is happening all over Kunming and maybe even all over China. They know exactly what they are doing. It's not like you are buying clothes. Of course buying an apartment is an investment. An investment of your future living space probably until you die. There are too many abuses in the housing market and it needs to stop. Too many places are being 'chai le' without the peoples vote. Sad situation.

Hi Danmairen, I agree with you 100% but there's a few things I'd like to point out. I didn't imply that all the buyers are looking to make a profit, merely stating that buyers as a class are just as greedy as the developers and that's why they are in the situation they are in now. I'm sure there are quite a few people who wanted to buy a house to live in, such as your friends, but look at the rational for buying this particular house. They could've bought a second hand house in the same area 2 years ago, they could've gone with another developer project, but why didn't they? Because they thought they were getting a deal that was too good. Yes, the developers outright lied to the people and are despicable, but that doesn't absolve the buyer from using common sense and their judgment.

Also, I didn't realize there was an official story. What's the unofficial version? I said the developers lied to the people and made certain promises, unfortunately these promises weren't written into the contract and so now these people have a hard time suing them in court. So then is the price actually written into the contract? Did the contract state that they would get the house at X amount?

As to the villiagers, why would you expect the developers to share their profits with them? They are greedy, ruthless people. Whatever is given to them to move is what they got, nothing more and quite often, much less.

Does this remind anyone of the US subprime morgage situation? Dishonesty is certainly a problem that should be addressed, but so is a culture where the risks and responsibilities of making investments like buying a house aren't taken seriously. The government can step in and punish the RE company for dishonest marketing, but the more extreme examples of con schemes where nothing is even built will continue if people aren't taught the complexities of purchasing real estate and if they don't take some responsibility for choosing their investments wisely. That said, maybe the scarcity of housing (which does seem the government's responsibility) is making buyers in the RE market so desperate as to prevent smart decision making. But if you're paying a deposit on something 2 years from its being built it doesn't seem to fit that explanation.

Tonyaod, there are many reasons why people want to buy 'a new' apartment as oppose to a second hand. Do you like buying 'second hand' clothes? Generally not I guess. Remember, you are buying an apartment. People want to buy where they want to live. Some people won't live or buy in Wen Lin Jie others will. Besides, when you buy a 'new' apartment, the idea is that it is better than an 'old' apartment. Anyway, I hope that nobody has to go through what some of these people have to go through just to find a place to live.

Tonyaod, there are many reasons why people want to buy 'a new' apartment as oppose to a second hand. Do you like buying 'second hand' clothes? Generally not I guess. Remember, you are buying an apartment. People want to buy where they want to live. Some people won't live or buy in Wen Lin Jie others will. Besides, when you buy a 'new' apartment, the idea is that it is better than an 'old' apartment. Anyway, I hope that nobody has to go through what some of these people have to go through just to find a place to live.