[Ryu Taemin's Real Estate A to Z] If You Prepay the Interim Payment, Can You Not Cancel the Contract?

[Asia Economy Reporter Ryu Tae-min] Recently, as housing prices have started to rise again, the number of homeowners trying to cancel ongoing sales contracts is increasing. So, if the buyer pays the middle payment or the remaining balance earlier than the agreed date out of concern for the seller's change of mind, can the contract cancellation be prevented?

According to civil law, the seller can cancel the contract by compensating double the deposit until the buyer pays the middle payment. In other words, once the buyer pays the middle payment or the remaining balance, the seller can no longer cancel the contract even after repaying double the deposit. In principle, the timing of the middle payment or the remaining balance payment does not matter.

Even if the buyer pays the middle payment earlier than the date stated in the sales contract, it is considered that the buyer has started to fulfill the contract, thus blocking the seller's right to cancel the contract. At this time, the amount of the middle payment or remaining balance is recognized even if only a part of the amount stated in the sales contract is deposited, but if the amount is too small compared to the agreed amount, it may not be recognized.

However, unilaterally paying the middle payment or remaining balance does not automatically block the right to cancel the contract. A typical case is when the seller expresses the intention to cancel the contract before the early payment of the middle payment. Especially, if the seller sends double the deposit to the buyer's account first, it is the most certain contract cancellation. Even if the account number is unknown, if the seller notifies the buyer of the intention to cancel the contract, the seller's contract cancellation takes precedence even if the buyer later pays part of the middle payment or remaining balance.

Including a special clause regarding the payment date when drafting the sales contract is also a method. According to actual precedents, if there is a special clause stating that early payment of the middle payment before the scheduled date is ineffective, the payment is not recognized, and the seller can still cancel the contract by repaying double the deposit. Attorney Jo Se-young of Law Firm Rowin advised, "If you fully understand the special clauses when signing the contract, you can continue the contract in the desired direction without disputes between parties."

This content was produced with the assistance of AI translation services.