Beijing house sells in online judicial auction

A house in Beijing was successfully sold through online judicial auction on Wednesday, according to Beijing No 2 Intermediate People's Court.

To save time and auction commissions, the court has been developing auctions on Taobao, China's largest online shopping platform, since April and made it first deal on Wednesday morning.

The house, located in the Tongzhou district of the city, sold for 1.4 million yuan ($224,758), slightly below the market price.

The starting price of the house was 1.29 million yuan and the online auction attracted four bidders, the court said.

Information about the house was first put online by the court 15 days earlier and the auction started at 10 am on Tuesday.

The former house owner, who also ran a company, had a dispute with an employee and had no money to pay compensation, so the court ordered him to use the house, said Zhang Yao, the judge responsible for the case.

"Holding a judicial auction online is also a good way for the public to supervise our work and for more people to learn about and participate in it," said Zhan Tong, a legal officer at the court who was responsible for the auction.

It was the first time the capital's courts have held an Internet auction, Zhan said, adding that procedures for such auctions are required to be transparent to the public.

Previously, courts had to pay commissions to auction companies, "but now we don't need to pay those fees in accordance with the current rules on online judicial auctions," he said, adding that could also help the buyer save money.

For example, if a buyer wins an online judicial auction with a bid of 1 million yuan, the usual commission of more than 10 percent of the total price will not be applied.

"It means the bidder can save more than 100,000 yuan if he makes the deal online," Zhan said. "Putting real estate online will also avoid some auction companies colluding with courts to deal with cases in a hidden way."

"People can contact us to look at properties in the auction and then decide whether to bid or not," he said. "Taobao employees first examine bidders' identities, and then we’ll check again when a deal is made."

In addition to the intermediate people's court, the court in the city's Fengtai district is also testing a pilot program of online judicial auctions.

"We'll extend auctions in this way across the city if it can be done well," Zhan said.

About two years ago, courts in Zhejiang province started exploring holding judicial auctions on Taobao, which was considered a way to make legal work more transparent.

Zhan added that online judicial auctions need more time to be accepted by the public, "because it's indeed difficult to let the public believe all trading procedures online are safe."