TMTPOST— China’s Supreme People’s Court has sent a strong signal in support of homebuyers caught in stalled property developments, affirming that purchasers of “rotten-tail buildings” — projects that have been halted with no near-term prospects of delivery — can terminate both their purchase and mortgage contracts without further repayment obligations. The landmark stance follows a recent case in Yancheng, Jiangsu Province, where a local court ruled to dissolve a housing purchase and mortgage contract due to the developer’s failure to complete the project. The court ordered the developer to return both the principal and interest on the homebuyer’s down payment and mortgage loan. The ruling has now been included in the Supreme People’s Court's official case database, indicating it has passed multiple layers of judicial review and reflects national-level guidance on similar disputes. This is not an isolated ruling. In June 2025, a court in Xiangzhou District, Zhuhai, issued a similar decision in favor of a buyer surnamed Zhang, whose home was also undelivered due to the developer’s default. The court voided both the purchase and financing contracts, ordering the developer to refund the buyer and cover related costs. Legal experts note that the inclusion of these cases in the Supreme Court’s database signals an official stance from China's highest judicial authority. Cases admitted into this database undergo rigorous review by relevant judicial departments and are seen as guiding precedents for courts across the country.