Buyer denied ownership of frozen property

Pudong New Area People's Court has rejected a local woman's request to unfreeze an apartment she bought from a homeowner so deep in debt that the court froze ownership of the property, the court said Monday.

The woman, surnamed Zhang, 35, submitted the request so she could transfer the property deed under her own name, according to a court press release. Although she had paid the homeowner, surnamed Zhu, for the apartment, the deed remained under his name.

The court froze the apartment in October 2013 after one of Zhu's creditors sued him for 1.3 million yuan ($210,000) in September 2012 to recover the 1 million yuan Zhu had never repaid, plus interest.

At the request of the creditor, surnamed Tong, the court froze the deed to the apartment so it couldn't be transferred to another owner. The court made this decision even though Zhu had already sold the apartment to Zhang on May 29, 2012, for 3.5 million yuan, which she had paid in full by the end of the next month. She also moved in shortly after.

Zhu never used the money to repay his 1.7-million yuan mortgage. Instead, he spent it on business and stalled Zhang when she asked him to transfer the deed to her name, the court said. Zhang felt that she was a victim because she spent her money on an apartment that she couldn't take legal ownership of. However, the court rejected her claim because the ownership of the property was legally frozen.

The court suggested that home buyers should examine a property owner's credit record to protect their rights and minimize financial losses, especially when the owner has outstanding loans or has put up the property as collateral.