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China: Chongqing home buyers cheated

The new property law has been much-discussed on the millions of homeowner forums across the country, and property rights consciousness is definitely spreading across the country, but it's not every city that has private interest-defending heroines like Chongqing‘s Wu Ping (the video linked to there has been deleted but this one shows Wu in action, and more here).

From the same city this past week, Chongqing residents eager to buy flats in the new Top Class Sixteen (上品十六) property had gathered on August 5 for the next step of flat selection. Two thousand VIP cards had been sold, as is often done in China, which at CNY 6,666 bought the holder the advance privilege of choosing which particular flat they would purchase. Only when flat selection day came, with several thousand potential future residents carrying the required down payment of CNY 10,000 in cash gathered in a gymnasium, it was announced that there were not enough flats to go around, and the crowd rioted.

There had been discussion of what ensued on Netease, which has since been deleted. Video of the scene during the flat selection inside the gymnasium can be found here:

Extensive discussion and accounts of the events leading up to and following the destruction of the developer's Sales Office and resulting clash with police can be found on several local Chongqing internet forums, however. Here's what one homeowner wrote:

场面过于混乱以及时间段长(早6:30—-凌晨2:00),只能简单叙述。

The scene was too chaotic, and I was there for too long a time (6:30 am-2:30 am), so I can only give a simple recount

早在6月初,上品开始发放VIP卡,交6666抵扣10000房款,本来很多开发公司都以这种方式积累客户,但上品是在几个开发证件不齐的情况下发放,并不能随时退,协议要求在开盘20天后才予以退还。现场销售人员介绍开盘时间7月份,置业计划预算单价格为3600(后有3700、3800、3900)一说,直至8月5号摇号,前后2个月时间,周边房价涨了300-500元。要说房价普涨,它不涨也没道理,问题是客户已交的钱不能退,并在销售人员那里得到种种暗示:买卡一定能选到房,价格不变。在目前房屋都疯抢的情况下,很多业主寄希望于上品,即便是涨点价,但先期买了卡,至少可以保证选到房。基于此种心理很多客户放弃购买其他楼盘的机会,安心等待上品开盘。

Already in early June, ‘Top Class’ began issuing VIP cards; CNY 6,666 gave you 10,000 down on a flat. Many developers use this kind of method to accumulate clients, but Top Class distributed the cards despite there being some irregularities in their development permits, and the cards could not just be refunded at any time with the agreement stipulating that refunds could only be sought twenty days after the flats went on sale. Sales staff had said the opening date was slated for July, and the costs were estimated to be around CNY 3,600 per square meter (later there were CNY 3,700, 3,800, 3,900) and maintained that right up until the the number draw on August fifth. Over these two months, the prices for housing in the surrounding area had risen by 300-500 per square meter. Sure, there's standard inflation in house prices, but the problem is that the money the customers had already paid could not be refunded. And from what the sales staff had suggested repeatedly, those who had purchased VIP cards would get first selection of the flats, and that the price would stay the same. At present, as housing everywhere keeps getting madly snatched up, many homeowners placed their hopes in Top Class, even if the prices were a little higher, and bought VIP cards in advances, which at least ensured they'd have their choice of flat. With this in mind, many people gave up chances to buy housing in other properties, and reassuredly waited for the Top Class opening.

The writer continues on with the story, of showing up at the gymnasium at 6:30 on the morning of August 5 with a VIP card and CNY 10,000 in cash down payment in hand ready to wait for his number to be called and to claim a flat for himself, noting that many potential homebuyers there were around 25 years old, and estimating the crowd at between 7,000 to 8,000 people.

Your number gets called, you choose your flat, and then you paid, with the lineup allegedly having quickly stretched several hours long. Between the straining to listen for their numbers from the gymnasium bleachers, he writes, and clutching tensely the bundles of cash they brought—credit cards weren't being accepted—it wasn't long before people got worked up. Eventually the chairman of the proceedings began calling people up on their mobile phones, informing them that many of the flats had already been informally reserved by the developer for in-house use. Quite tired by this point, people were unsatisfied at hearing this. One woman charged down onto the floor and began demanding a refund. This quickly led to the situation getting out of hand, and the angry mob's departure for the developer's office, demanding refunds.

They ripped the door off the Sales Office when they arrived, storming in and smashing walls and other things. The police arrived, who then quickly called for backup and there were some scuffles, but no fighting either way. Eventually the police let the remainder of the crowd into the office where among what they found was an official notice from the State Land Administration for the developer to cease illegally issuing VIP cards, as well as a list of flats which had been reserved by company executives which included the names and phone numbers of those involved, the size and location of the flat.

实事求是,昨天幸亏有警察维持现场,否则事态会更加恶化。正如有个警察向上级的汇报电话:“我们人一直在维持,要晚点售楼部都要遭烧”。

The reality of the situation is, it's lucky the police were there yesterday to maintain the scene, or else things would really have gotten ugly. Just like one officer said on the phone to his superior: “our people are holding the fort; if we'd gotten here any later they would have burnt the Sales Office down.

又退到外面静坐,这时,突然看到售房部那个台湾人和另一工作人员,身后围着10多个满脸横肉“光头”。原本一直克制、冷静的我心火顿冒,这都是什么样的社会啊,在几百警察的眼皮底下,竟然出现这种场面,连我一平头百姓都能感觉到这些人是干什么的,这些警察难道是瞎子,看不出来?并在不远就是他们的公安局长。暗下决心如果这些人敢动手打客户,我绝对参加反抗,豁出去,拼了!后来,一直都是内外闹哄哄的,不知道什么时候再没看到那群“光头”,也许是开发公司请来给工作人员壮胆,怕被客户认出打伤,但那台湾人和工作人员一直在工地大门不远处坐着。

So we went back outside and sat peacefully on the ground. At this time, the Taiwanese guy from Sales and another colleague showed up with ten round-faced, thick-bodied “baldies”. Where I'd kept my cool all up until then, I suddenly blew my lid; what kind of society is this? Right in front of the eyes of five hundred cops, something like this would actually happen, and even flat-head civilians like me could now see they were up to something. It's not like the cops were blind, that they couldn't see this? And not far away was their police chief. I decided that if any of these guys tried making a move to hit us homebuyers, I was sure as heck gonna start fighting back, no matter how serious the consequences. Later, after all the racket inside and out, I didn't see those thugs again; they might have just been hired by the developer to give their staff some chutzpah, for fear of being recognized by the clients and beaten up. But that Taiwanese and his workers just sat all along nearby.

Someone came out to speak—whom he wasn't able to see—and the crowd charged again, with violent clashes between police and homeowners now taking place and, the writer says he personally saw, at least two women be surrounded by seven or eight police officers and beaten. Another charge, and then a letter of guarantee stamped and signed by the developer suddenly arrived, promising those who wished a CNY 10,000 refund for their CNY 6,666 VIP card. No time reference is given, but his account ends here; judging from what many others have written, the crowd dispersed around 2 am on August 6.

Tencent has set up a page devoted strictly to the incident, and much more in eye-witness accounts is to be found at the Chongqing section of the real estate website Soufun.com, including a market description and layout diagram of the housing estate.

Discussion on the forums is covering all sorts of topics: members proposing votes on whether to follow through with purchasing the flat or seek a refund, a space devoted to personal testimonies of violence seen or felt that night, including a photo of one woman ostensibly injured during the rumble.

There's even been a Sina blog set up for this incident which is still being updated. Within can be found many photos of the smashed plants—even a temporary roadblock—from earlier in the day, and the mob action later at night.

Details and many photos can also be found at local website Chongqing Focus, but the discussion seems most lively at the Soufun site.

Comparison has is made to The Nailhouse and details of the day and night's proceedings are provided.

Some forum members are accused of attempting to influence the course of discussion in several forum threads which if true would explain the quick change of tune seen in some newer threads, with anonymous users writes reassuringly of the developers, heralding their exceptional integrity in resolving the situation, garnering little response from other users.

There's also a thread seeking to organize people for injury compensation, and another which alleges one pregnant woman was beaten and others present even killed, although users are quick to negate the death claim and emphasize that injuries sustained were not serious.

As mentioned above, on early morning August 6 the developers released a letter of guarantee responding to the grievances of those shortchanged with promises to offer them first choice in properties of the same price from the next phase of development, quickly raising questions of when that construction will begin, when it will finish, the quality and appearance of these flats, looking upon these promises with serious skepticism. Another thread summarizes those suspicions and provides a photo of the letter of guarantee, which states that ‘those not willing to buy houses on August 5′ can have their VIP cards refunded for 10,000 on August 7, adding that no more VIP cards will be issued.

The same concerns are echoed yet in more threads, with home buyers vowing to try and seek a refund, resigned to buy elsewhere, as property prices across the city are rising steadily. Like this thread, where one user writes:

时间就是金钱,这句话用在这里是再直白恰当不过了。
前期销售人员也好,KFS也好,给我们大家编制了一个很美很美的梦。大家的期望着,憧憬着,等待着这个美梦的实现。如今只听到“砰”的一声,在没有消散的烟雾中看到几个醒目的大字:这是一个白日梦……
我们这群怀揣美好生活梦想的年轻人呐,大家一定要团结起来,打人也好,恐吓也好,收买少数人也好,我们要KFS、zf为此付出代价

Time is money. Using this phrase here couldn't be more appropriate.
Whether it's the pre-sale sales staff or the developers themselves, they've given all of us a beautiful, beautiful dream. Everyone's anticipating, longing, waiting for this beautiful dream to come true. To this day, though, all we've been given is one big BANG; and in the plume of smoke yet to drift off, we can see the following eye-opening words: this was all just a daydream…
Us bunch of youngsters who carry dreams of a beautiful life, aye, everyone must join together and rise up, no matter if they beat us, terrorize us or even buy a few of us off, we want the developers and the government to pay a price for this.

At least one thread claims that following the house selection in the gymnasium, when the crowed stormed the developer's office, police began beating people at one sergeant's orders.

Homeowners even issued a list of the previous issues and their recommendations for recourse. During the storming of the developer's office, the crowd got their hands on several documents which they've posted online, like this one which shows how many of the flats were reserved for company executives and their friends and relatives:

A series of photos have been gathered at the Cultural Vanguard forum, where not much discussion on this has taken place:

cq14.jpg

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cq5.jpg

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cq7.jpg

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cq10.jpg

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Perhaps related, on August 12 a video was uploaded to China's largest video website 56.com by user cuidi3zhu which shows a group of angry homeowners arguing with what appear to be representatives of a property development company, speaking in the Chongqing dialect:

5 comments

  • […] China berichtet heute John Kennedy: Auch hier sei das Interesse daran, ein Haus zu besitzen, immer größer und das […]

  • Wanna hear another crazy Chinese home buying story?

    200 people in Dalian lose 36 000 000 RMB, when developer of Caifu GuangChang (wealth square) goes bankrupt.

    CCTV carried the story:
    http://news.cctv.com/society/20070627/100067.shtml

    Home owners protest at local government headquarters.
    Police beat 2 of them, and confiscate cameras and camera phones:
    http://dlbbs.soufun.com/1618147665~-1~836/1435581_1435581.htm

    How do I know this?

    I bought one too.

    I’m not sure whether I’ll blog about it or not yet.
    Though I don’t mind letting you guys know about it.

  • nanheyangrouchuan

    Perhaps Chinese people could learn something from Iraqi insurgents?

    Bad, oppressive China

  • Charles Liu

    Yeah, right, like real estate deals never go south in America?

    Please, even the most liberal democratic priciples do not justify taking the law in your own hand. If cheated homeowners in America does this, they too will be arrested by the police.

  • This is just the start of free enterprise unfortunatly.
    I can give you dozens of instances in australia where builders take your deposit $45,000.00 then do the runner can’t PETER HABISH Coffs Harbour.
    I hope your governement can do something as it is always the little person who gets crushed

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