Recently, the lawyer team led by Guo Jinhui, a senior partner of Gaopeng Law Firm, received a first instance judgment from the court regarding a dispute over a housing lease contract for a client (a state-owned unit in Beijing). The case went from the initial passive situation where the customer (lessor) faced the need to compensate the lessee for more than 60 million yuan in renovation, expansion, and decoration fees, to the final reversal and winning the lawsuit. In total, it saved the customer nearly 100 million yuan in losses, which was extremely difficult.

The customer, as the lessor, signed a 10-year lease contract with a catering company as the lessee in 2005. Due to the need for the lessee to renovate, expand, and decorate the three rented houses, the agreed rent in the lease contract is much lower than the market price. It is also agreed that after the expiration of the contract, the lessor needs to compensate the lessee with 60% of the renovation, expansion, and decoration parts, and 40% of the compensation for movable equipment. After the expiration of the lease contract in 2015, due to the abuse of power and violation of relevant regulations by the original person in charge of the lessor, a supplementary agreement was signed with the lessee that was very unfavorable to the lessor (the rent price remained unchanged, the compensation terms remained unchanged, and the original lease contract terms continued to be valid until the new lease contract was signed), resulting in the lessor not only continuously renting the three commercial buildings to the lessee at a much lower rent than the market price, It also faces the need to provide high compensation to the lessee for expansion, decoration, and other expenses after the contract is terminated, putting the customer in a very disadvantaged position.

After discovering the above situation during the inspection work, the client's superior unit shall order the client to retrieve the rented house as soon as possible and reduce the loss of state-owned assets. The customer then negotiated with the lessee to terminate the lease contract and take back the property, but the lessee refused to terminate the contract. Due to the inability to resolve the matter through negotiation, the client had to entrust a lawyer to resolve the matter.

After accepting the client's commission, Lawyer Gaopeng studied the facts and laws of the case. In order to help the client achieve the goal of terminating the contract and retrieving the house as soon as possible, based on the evidence at the time, the lawyer suggested that the client first notify the lessee in writing to terminate the supplementary agreement and vacate the house, citing the supplementary agreement signed by both parties as an indefinite contract. However, the lessee replied by refusing to terminate the lease contract. At the suggestion of the lawyer, the client filed a lawsuit with the court, requesting the court to confirm that the supplementary agreement has been terminated, ordering the lessee to vacate the house and pay the market price assessed occupancy and usage fee from the date of contract termination to the actual date of vacation. The lessee then filed a counterclaim, requesting the judgment to continue to fulfill the supplementary agreement, and requiring the lessor to pay for expansion, decoration, and decoration according to the lease contract and supplementary agreement The compensation for mobile devices is over 60 million yuan.

Following the above approach to the termination of the contract, it is possible to file a lawsuit to help the client terminate the supplementary agreement and reclaim the leased property. However, it cannot solve the problem of huge rental losses caused by the client's long-term low-priced rental prior to the lawsuit (the difference between the agreed rent in the contract and the assessed market rent price is about five times, and the rent difference is about 50 million yuan), as well as the lessee's agreement based on the lease contract and supplementary agreement, Claim compensation of over 60 million yuan from the lessor for expansion, renovation, and other related issues. In order to solve the above difficulties and try to recover losses for the client, Guo Jinhui's lawyer team has conducted repeated research on laws and similar cases, proposed new litigation ideas, and after studying and communicating with the client, the client recognized it. Through joint efforts with the client, criminal legal proceedings were initiated, and evidence supporting the invalidity of the supplementary agreement was obtained before the civil case trial was concluded. Based on this, In accordance with the provisions of the Civil code on the invalidity of the civil act of malicious collusion between the perpetrator and the counterpart to damage the interests of others, we applied to the court to change the claim, claiming that the supplementary agreement signed by both parties in 2015 was invalid, requiring the lessee to vacate the house and pay the house occupancy fee from 2015 to the date of vacating according to the market price of the same location. In addition, in response to the lessee's counterclaim request for compensation of over 60 million yuan for expansion, decoration, and movable equipment from the lessor, we have taken drastic measures to negate the compensation provisions of the lease contract that are severely unfavorable to the customer, citing the invalidity of the contract. We also propose that the main fault for the invalidity of the contract lies with the lessee, and that the lessee should bear the majority of the losses caused by expansion and decoration.

After the change of the above litigation request, we submitted sufficient evidence and legal basis to support our new claim. After intense court debate, the first instance court adopted our agency opinion and ultimately supported our changed litigation request and the defense opinion against the lessee's counterclaim request. We ruled that the supplementary agreement signed by both parties in 2015 was invalid and ordered the lessee to vacate three houses involved in the case to us, We support our request for the lessee to pay the rent based on the market evaluation price starting from 2015, and have ruled that the lessee is primarily responsible for the invalidity of the contract. Therefore, we have only been held responsible for 30% compensation for losses related to decoration and decoration.

The above winning judgment not only helped the client successfully recover three state-owned property properties, but also managed to recover the rent difference from previous years based on the evaluation price, and abolished the unequal provisions on compensation for decoration and other compensation in the supplementary agreement. The dispute over the rental contract of this house was initially estimated to compensate the lessee for 60 million yuan in renovation and expansion fees, and finally the lessee was judged to pay our client over 70 million yuan in rent. The client was also judged to reduce the compensation for renovation, expansion, decoration, and other expenses to the lessee by over 30 million yuan, which in total saved the client nearly 100 million yuan in losses. The client was very satisfied with the judgment result.

Due to the unfavorable leasing contract and supplementary agreement signed by both parties in this case, it is very difficult to achieve the aforementioned victory. From the initial litigation plan design to the later adjustment of litigation ideas, Guo Jinhui's team of lawyers, through strong professional ability and professionalism, assisted the client in winning the lawsuit from multiple perspectives, including criminal litigation, and maximally protected the client's legitimate rights and interests, It has also won high recognition from clients for the professional skills of the Gaopeng lawyer team.