520,000 yuan auction for a house, only to discover it was transferred to someone else 12 days ago. A second transfer within two years would require paying nearly 30,000 yuan in value-added tax and other fees.

Why is the auction company only responsible for 10% due to disclosure flaws?

“During the auction, the page showed the property ownership certificate issued in 2021. After winning the bid for 520,000 yuan, when I contacted the auction company about the transfer of ownership, I discovered that the certificate on the page was already invalid. Before I successfully bid, the house had already been transferred to someone else.” Ms. Gui from Wuhan still feels wronged about this matter.
Although the auction company claims it does not affect the transfer of ownership for Ms. Gui, because the property changed from a “second-hand house” to a “third-hand house” 12 days ago and has not been owned for less than two years, Ms. Gui must bear an additional nearly 30,000 yuan in VAT and other fees. When she refused to pay the remaining amount, the auction company said it was a regret bid, and the 50,000 yuan deposit was not refunded. After a lawsuit, the court recently issued a first-instance judgment: the house exists and can be transferred normally, with the bidder bearing main responsibility. The auction company only refunded 5,000 yuan of the deposit due to the flaw.

The house bid at 520,000 yuan, but the ownership certificate shows invalid?

In May 2025, Ms. Gui from Wuhan saw a property listed on Taobao Alibaba auction platform offered by DingYao Auction (Shenzhen) Co., Ltd. The auction page showed the ownership certificate number as 鄂（2021）武汉市武昌不动产权第0xxxx65号. After 60 rounds of bidding, Ms. Gui successfully won the bid on May 20th at a price of 526,300 yuan.

However, after the auction ended, when Ms. Gui contacted the auction company about the transfer of ownership, she unexpectedly found a shocking fact: the certificate number displayed on the page was invalid. Further inquiry revealed that the property had already been transferred to someone else 12 days earlier (May 8th).

“This is a major change, and I had no way of knowing this at the time of bidding. The auction company also did not proactively inform me,” Ms. Gui said. “They knew the house had already been transferred, but they said nothing.”
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A house that has been owned for over two years turns into less than two years, requiring an additional nearly 30,000 yuan**
This seemingly insignificant “information gap” directly caused Ms. Gui to incur a substantial extra cost.
According to tax policies, individuals selling a property they have owned for less than 2 years must pay 5% VAT in full. If calculated based on the 2021 ownership certificate shown on the auction page, the house had been owned for over two years at the time of auction, and VAT could have been exempted.
“But the auction page did not show this major change, which led to the house being transferred to a third party on May 8th. If I buy again, the third party only held the property for 12 days before the transaction, and I would need to pay an extra approximately 26,300 yuan in VAT, plus additional taxes and fees, totaling nearly 30,000 yuan.”
“The house is the same house, but because the auction company did not disclose this major information and it changed hands again, I have to pay an extra 30,000 yuan,” Ms. Gui feels this is unfair. “Why didn’t the auction company tell me the house had already been transferred? Why didn’t they tell me the tax fees would change?”

After winning the bid, obvious quality issues with the house were discovered

Additionally, after winning the bid, Ms. Gui went to inspect the house and found multiple obvious quality problems such as water seepage and rot on the floors and walls, leaking kitchen sink, mold on the walls, etc. The house was severely aged and damaged, requiring demolition and renovation. “The actual condition is worse and more dilapidated than the photos on the auction page,” Ms. Gui said.
According to the auction process, Ms. Gui needed to pay the remaining amount within 15 days after winning. Due to these issues, she chose to communicate with the auction company to terminate the transaction and request a refund of the 50,000 yuan deposit. The response was that failing to pay the remaining amount on time was considered a regret bid, and the deposit would not be refunded. Ultimately, both parties went to court.

Court rules auction company’s disclosure flaws warrant only 10% responsibility, refund of 5000 yuan deposit

The Shenzhen Longgang Court held that although the house involved was aged and damaged, Ms. Gui did not provide evidence of major structural flaws, and the auction company had uploaded photos and stated that the actual condition prevails. Ms. Gui, participating in the auction, did not visit the property in person as prompted and should bear the risk of quality flaws herself.
Regarding the core dispute over ownership and taxes, the court found that the cancellation of the property certificate was due to the invalid transfer registration of the old certificate, and in August, the property was successfully transferred to a new buyer, indicating no substantive obstacle to ownership transfer. However, the auction company used an invalid old certificate and inconsistent ownership information on the auction page, constituting a disclosure flaw. On the tax side, the court accepted the auction company’s explanation, believing that the tax scope and consultation channels were marked on the page, and Ms. Gui, as a bidder, should verify the property’s holding period and tax standards herself. Her failure to do so was seen as a neglect of her own due diligence.
The court ultimately ruled that Ms. Gui’s regret bid without just cause was a fundamental breach, and she should bear 90% of the responsibility; DingYao Auction, although not hiding major flaws, had minor disclosure errors and bore 10% responsibility. Accordingly, DingYao Auction was ordered to refund Ms. Gui’s 5000 yuan deposit, and other claims were dismissed.
On March 20th, Huashang Daily Dafen News learned from Ms. Gui that she has appealed the first-instance ruling, and the case is currently pending.

Lawyer: First-instance ruling assigning only 10% responsibility to auction company is clearly too lenient, recommends appeal

Zhao Liangshan, senior partner at Shaanxi Henda Law Firm and well-known public interest lawyer, stated: The auction’s publicized owner information is seriously inconsistent with the actual ownership status completed 12 days prior, which is a legally required key disclosure. According to Articles 18 and 61 of the Auction Law, the auctioneer has a legal duty to fully disclose the flaws and ownership status of the target. This information directly affects tax costs, property value, and bidding decisions, and is not a typical physical flaw; it cannot be exempted from disclosure by simply warning of flaws or stating “as-is.”
Zhao Liangshan believes that the first court’s decision to only assign 10% responsibility to the auction company is too light. The company’s deliberate concealment of key ownership change facts constitutes serious misrepresentation, leading to significant misunderstanding by the bidder, and is the main fault causing regret bids. It should bear the main or full responsibility according to law; the first instance court did not consider core factors such as trust damage and tax impact, and the second instance could have grounds for a higher ruling based on the Civil Code.
He reminds participants in online property auctions to strictly follow risk prevention points: before bidding, verify the latest ownership, mortgage, seizure, and transfer records at the real estate registration center independently; carefully read the bidding instructions and require written clarification on key terms such as ownership, taxes, and delivery; inspect the property in person and verify utility arrears; keep complete evidence such as auction pages, communication records, and ownership inquiry documents, and promptly raise objections and defend rights if ownership information is inconsistent.