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ADMINISTRATION OF THE URBAN REAL ESTATE

Category  URBAN AND RURAL CONSTRUCTION Organ of Promulgation  The Standing Committee of the National People's Congress Status of Effect  In Force
Date of Promulgation  1994-07-05 Effective Date  1995-01-01  

Law of the People's Republic of China on Administration of the Urban Real Estate



Contents
Chapter I  General Provisions
Chapter II  Land Used for Development of Real Estate
Chapter III  Development of Real Estate
Chapter IV  Transaction of Real Estate
Chapter V  Administration of Real Estate Ownership Registration
Chapter VI  Legal Liability
Chapter VII  Supplementary Provisions

(Adopted at the Eighth Meeting of the Standing Committee of
the Eighth National People's Congress on July 5, 1994, promulgated
by Order No.29 of the President of the People's Republic of China
on July 5, 1994, and effective as of January 1, 1995)
Contents

    Chapter I   General Provisions

    Chapter II  Land Used for Development of Real Estate

        Section 1  Granting of the Land-use Right

        Section 2  Allocation of the Land-use Right

    Chapter III  Development of Real Estate

    Chapter IV   Transaction of Real Estate

        Section 1  General Conditions

        Section 2  Transfer of Real Estate

        Section 3  Mortgage of Real Estate

        Section 4  Lease of Houses

        Section 5  Intermediary Service Agencies

    Chapter V    Administration of Real Estate Ownership Registration

    Chapter VI   Legal Liability

    Chapter VII  Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is formulated in order to strengthen
administration of the urban real estate, maintain the order of
real estate market, protect the legitimate rights and interests of real estate obligees and promote the healthy development of real
estate business.

    Article 2  Obtaining the land-use right for development of
real estate, engaging in development of real estate and
transaction of real estate, and exercising administration of real
estate in the State-owned land within a planned urban district in
the People's Republic of China (hereinafter referred to as the
State-owned land) shall comply with this Law.

    "Houses" as used in this Law means buildings and structures
such as houses on the land.

    "Development of real estate" as used in this Law means
acts of building infrastructure and houses on the State-owned
land, the land-use right for which has been obtained in accordance
with this Law.

    "Transaction of real estate" as used in this Law includes
transfer of real estate, mortgage of real estate and lease of
houses.

    Article 3  The State shall practise a compensatory and
terminable system for the use of State-owned land in accordance
with the law, however, allocation of the land-use right by the
State under this Law shall be excepted.

    Article 4  The State shall, based on the social and economic
development, support the development of construction of
residential houses so as to gradually improve the housing
conditions of the residents.

    Article 5  Obligees of real estate shall abide by the laws,
administrative rules and regulations and pay taxes according to
law. The legitimate rights and interests of the obligees of real
estate shall be protected by the law and shall not be infringed by
any units or individuals.

    Article 6  The department of construction administration and
the department of land administration under the State Council
shall, in accordance with the division of functions and powers
prescribed by the State Council, attend to their own duties, act in
close coordination and manage the work concerning real estate of the whole country.

    Institutional structures, and functions and powers of the
departments of housing administration and land administration
under the people's governments at or above the county level shall
be determined by the people's governments of provinces, autonomous
regions and municipalities directly under the Central Government.
Chapter II  Land Used for Development of Real Estate

    Section 1  Granting of the Land-use Right

    Article 7  Granting of the land-use right refers to acts that
the State grants land users the right to use the State-owned land
(hereinafter referred to as the land-use right) for a certain
number of years and the users shall pay the State a granting fee
for the land-use right.

    Article 8  The land-use right for the collective-owned land
within a planned urban district may be granted with payment only
after it is requisitioned in accordance with the law and turned
into State-owned land.

    Article 9  Granting of the land-use right must conform to the
overall planning for land utilization, urban planning and the
annual plan for land to be used for construction.

    Article 10  Where the local people's governments at or above
the county level grant land-use right for development of real
estate, they must, based on the quota set by the people's
governments at or above the provincial level, draw up plans for the
total area for annual granting of the land-use right, which shall,
according to the provisions of the State Council, be reported to
the State Council or the provincial people's government for
approval.

    Article 11  Granting of the land-use right shall be carried out
by the people's governments of the cities or counties in a planned
and step-by-step way. With regard to each lot granted, plans for
its purposes, term of use, and other conditions  shall be worked
out by the departments of land administration under the people's
governments of the cities and counties in conjunction with the
competent departments of urban planning, construction and housing
administration. Such plans shall, according to the provisions of the State Council, be implemented by the departments of land
administration under the people's governments of the cities or
counties after their submission to and approval by the people's
governments with due authority for approval.

    Limits of authority as provided in the preceding paragraph
for the people's governments and their departments concerned of the counties of the municipalities directly under the Central
Government shall be prescribed by the people's governments of the
municipalities directly under the Central Government.

    Article 12  The land-use right may be granted in mode of auction, bidding or agreement between the two parties.

    For Land used for commercial, tourism, recreation and luxury
housing purposes, where conditions permit, the mode of auction or
bidding shall be adopted; where conditions do not permit and it is
impossible to adopt the mode of auction or bidding, the mode of agreement between the two parties may be adopted.

    Fees for granting the land-use right in the mode of agreement
between the two parties shall not be lower than the lowest price as
determined in accordance with the provisions of the State.

    Article 13  The maximum term for the granting of the land-use
right shall be prescribed by the State Council.

    Article 14  Granting of the land-use right shall be conducted
through concluding a written granting contract.

    The contract for granting the land-use right shall be
concluded between the departments of land administration under the
people's governments of the cities or counties and the land users.

    Article 15  A land user must pay the fees for the granting of the land-use right as agreed upon in the granting contract. Where
fees are not paid as agreed upon in the granting contract, the  
department of land administration shall have the power to rescind
the contract and may demand compensation for the breach of contract.

    Article 16  Where a land user has paid the fees for the
granting of the land-use right as agreed upon in the granting
contract, the department of land administration under the
people's government of the city or county must provide the land
granted as agreed upon in the granting contract; where the land
granted is not provided as agreed upon in the granting contract,
the land user shall have the right to cancel the contract, the
fees for granting the land-use right shall be returned by the
department of land administration,  and the land user may demand
compensation for the breach of contract.

    Article 17  Where a land user who needs to modify the land-use
purpose agreed upon in the contract for granting the land-use
right, he must obtain the consent of the granting party and the
competent administrative department for urban planning under the
people's government of the city or county, conclude an agreement on
the modification of the granting contract or conclude a new
contract for granting the land-use right and the fees for granting
the land-use right shall be accordingly readjusted.

    Article 18  All the fees for granting the land-use right shall
be turned over to the State Treasury and incorporated into the
budget so as to be used for the construction of urban
infrastructure and land development. Specific measures for the
turning over and use of the fees for granting the land-use right
shall be formulated by the State Council.

    Article 19  Before the term for the use of land as agreed upon
in the contract for granting the land-use right expires, the
State is not to recover the land-use right obtained by the land
user in accordance with the law. Under special circumstances as
required by  public interests, the State may, in accordance with
legal procedures, recover the land-use right before the expiration
of the term  and shall make appropriate compensation based on the
number of years of utilization and the actual development of the
land by the land user.

    Article 20  The land-use right shall be terminated with loss
of the land.

    Article 21  Where the term for the use of land as agreed upon
in the contract for granting the land-use right expires, and the
land user needs to continue the use of the land, the land user
shall apply for an extension of the term no later than one year
ahead of the expiration. Such an application shall be approved
except for the land to be reclaimed as required by public
interests. Upon approval of the extension, the land user shall
enter into a new contract for the granting of the land-use right
and pay fees for the granting in accordance with the relevant
provisions.

    Where the term for the use of land as agreed upon in the
contract for granting the land-use right expires, and the land
user does not apply for an extension of the term or his application
therefor is not approved in accordance with the provisions in the
preceding paragraph, the land-use right shall be reclaimed by the
State without compensation.

    Section 2  Allocation of the Land-use Right

    Article 22  Allocation of the land-use right refers to acts
that the people's government at or above the county level approves
in accordance with the law to allocate the land to a land user
after the latter has paid compensation and expenses for
resettlement, etc. for the allocated land, or gratuitously
allocates the land-use right to the land user.

    Where the land-use right is obtained by mode of allocation in
accordance with the provisions of this Law, except as otherwise
provided by the laws, administrative rules and regulations, there
shall be no restriction with respect to the term of use.

    Article 23  The land-use right for the following land used for
construction may, if really necessary, be allocated upon approval
by the people's government at or above the county level in
accordance with the law:

    1. land used for State organs or military purposes;

    2. land used for urban infrastructure or public facilities;

    3. land used for projects of energy, communications or water
conservancy, etc. which are selectively supported by the State; and

    4. land used for other purposes as provided by the laws,
administrative rules and regulations.
Chapter III  Development of Real Estate

    Article 24  The development of real estate must be strictly
subjected to the urban planning and carried out in a manner of overall planning, rational distribution, comprehensive development
and construction with supporting facilities, in line with the
principle of combining the economic, social and environmental
benefits.

    Article 25  Where the land-use right is obtained by mode of granting for development of real estate, the land must be developed
according to the land-use purpose and the time limit for starting
the development as agreed upon in the contract for granting the
land-use right. Where one year has elapsed from the date for
starting the development as agreed upon in the granting contract
and the land is not yet developed, fees for idle land which is
equivalent to twenty percent or less of the fees for granting the
land-use right shall be collected; where two years have elapsed and
the land is still not developed, the land-use right may be
reclaimed without compensation, however, the circumstances wherein
the delay of starting the development is caused by force majeure
or acts of governments or their departments concerned or by the
early preparations necessary for starting the development shall be
excepted.

    Article 26  The design and construction of a project of real
estate development must conform to the relevant standards and norm
of the State.

    A completed project of real estate development may be turned
over for use only after it is checked and accepted.

    Article 27  The land-use right obtained pursuant to the law
may, in accordance with the provisions of this Law and relevant
laws, administrative rules and regulations, be valued and
contributed as shares in developing and operating real estate in
the form of joint ventures or contractual joint ventures.

    Article 28  The State shall adopt preferential measures in
aspects such as taxation to encourage and support real estate
development enterprises to develop and construct residential
houses.

    Article 29  A real estate development enterprise is an
enterprise engaged in real estate development and operation for
purpose of profit. To establish a real estate development
enterprise, the  following conditions shall be met:

    1. to have a name and institutional structure of its own;

    2. to have fixed premises for business operation;

    3. to have registered assets conforming to the provisions of the State Council;

    4. to have sufficient professional and technical personnel;
and

    5. other conditions as provided by laws, administrative rules
and regulations.

    To establish a real estate development enterprise, an
application for registration of establishment shall be made to the
administrative department for industry and commerce. Where
conditions specified in this Law are met, the administrative
department for industry and commerce shall register the
establishment and issue a business license. And registration shall
not be made, where such conditions are not met.

    To establish a limited liability company or a joint stock
limited company engaged the real estate development and
operation, relevant provisions of the Company Law shall also be
complied with.

    A real estate development enterprise shall, within one month
after obtaining a business license, report its establishment
for the record to the department designated by the local people's
government at or above the county level in the place where the
registration authority is located.

    Article 30  The proportion of registered assets of a real
estate development enterprise to its total investment shall comply
with the relevant provisions of the State.

    Where a real estate development enterprise develops real
estate in phases, the amount of phased investment shall be
commensurate with the scale of the project and the capital shall
be put into construction of the project on schedule as agreed upon
in the contract for granting the land-use right.
Chapter IV  Transaction of Real Estate

    Section 1  General Conditions

    Article 31  In the transfer or mortgage of real estate, the
ownership of the house and the land-use right to the house site
shall be transferred or mortgaged therewith.

    Article 32  The basic land price, standard land price and
replacement prices for houses of various types shall be determined
and made public regularly. Specific measures shall be formulated
by the State Council.

    Article 33  The State shall practise an appraisal system for real
estate prices.

    The appraisal of real estate prices shall adhere to the
principles of justice, fairness and openness, and be carried out
according to the technical standard and appraisal procedures
prescribed by the State, based on the basic land price, standard
land price and replacement prices for houses of various types and
in the light of local market prices.

    Article 34  The State shall practise a report system for
real estate transaction prices.

    An obligee of real estate shall, in transfer of his real
estate, faithfully report the transaction price to the department
designated by the local people's government at or above the county
level and shall not make a concealed or false report.

    Article 35  Where real estate is transferred or mortgaged, the
party concerned shall register the ownership of the real estate
pursuant to the provisions of Chapter V of this Law.

    Section 2  Transfer of Real Estate

    Article 36  Transfer of real estate refers to acts that an
obligee of real estate transfers his real estate to another person
through sale, donation or other legal means.

    Article 37  No following real estate shall be transferred:

    1. The land-use right is obtained by mode of granting, but not
meeting conditions set forth in Article 38 of this Law;

    2. The rights of real estate are sealed up by order of the
judicial organ or decision of the administrative organ pursuant to
law or limited by other ways;

    3. The land-use right is reclaimed in accordance with the law;

    4. For jointly-owned real estate, written consent of other
co-owners has not been obtained;

    5. The ownership is under dispute;

    6. The real estate is not registered in accordance with the law
and the certificate of the ownership is not obtained; or

    7. Other circumstances under which transfer is  prohibited by
the provisions of laws, administrative rules and regulations.

    Article 38  Where the land-use right is obtained by mode of granting, transfer of the real estate shall meet the following
conditions:

    1. to have paid all the fees for the granting of the land-use
right as agreed upon in the granting contract and obtained the
certificate of the land-use right; and

    2. to have invested for development as agreed upon in the
granting contract and have fulfilled twenty-five percent or more of the total investment for development in the case of housing
projects, or have constituted conditions of land-use for industrial
purposes or other construction projects in the case of developing
tracts of land.

    Where real estate is transferred with the construction of houses completed, the certificate of the house ownership shall be
acquired.

    Article 39  Where the land-use right is obtained by mode  of allocation, the transfer of the real estate shall, according to the
provisions of the State Council, be reported for examination and
approval to the people's government that has the authority for
approval. Upon approval of the transfer by the people's government
with the authority for approval, the transferee shall go through
the formalities for the granting of the land-use right and pay the
fees therefor according to the relevant provisions of the State.

    Where the land-use right is obtained by mode of allocation
and the transfer of the real estate is reported for approval, and
where the people's government that has the authority for approval
decides in accordance with the provisions of the State Council that
the formalities for granting the land-use right need not be gone
through, the transferor shall, pursuant to the provisions of the
State Council, turn over to the State the proceeds obtained from
land in the transfer of the real estate or dispose of such proceeds
otherwise.

    Article 40  For the transfer of real estate, a written transfer
contract shall be concluded in which the mode of obtaining the
land-use right shall be stated.

    Article 41  When real estate is transferred, the rights and
obligations stated in the contract for granting the land-use right
shall be transferred therewith.

    Article 42  Where the land-use right is obtained by mode of granting and after the real estate is transferred, the term for the
use of the land-use right shall be the remaining years after
subtracting the years of use by the former land user from the
original term agreed upon in the contract for granting the land-use
right.

    Article 43  Where the land-use right is obtained by mode of granting and after the real estate is transferred, the transferee
modifies the land-use purpose agreed upon in the contract for
granting the land-use right, the transferee must obtain consent
from the transferor and the administrative department in charge of
urban planning under the people's government of the relevant city
or county, and conclude an agreement on the modification of the
contract for granting the land-use right or enter into a new
contract for granting the land-use right and readjust the fees for
granting the land-use right accordingly.

    Article 44  For the presale of commercial houses, the following
conditions shall be met:

    1. to have paid all the fees for the granting of the land-use
right and obtained the certificate of the land-use right;

    2.  to have a permit for construction project planning;

    3. the funds put into the development construction have
reached twenty-five percent or more of the total investment for
the construction project, computed on the basis of the commercial
houses provided for presale, and the schedule of construction and
the date of completion for delivery have been set; and

    4. to make registration for presale at the administrative
department in charge of house property under the people's
government at or above the county level and to obtain the
certificate of permission for the presale of commercial houses.

    Pre-sellers of commercial houses shall, in accordance with the
relevant provisions of the State, submit the presale contracts to
the departments of housing administration and departments of land
administration under the people's governments at or above the
county level for registration and record.

    The proceeds obtained from the presale of commercial houses
must be used for the relevant construction projects.

    Article 45  In the case of presale of commercial houses,
matters concerning the transfer of incomplete pre-sold commercial
houses that the buyers have purchased shall be prescribed by the
State Council.

    Section 3  Mortgage of Real Estate

    Article 46  Mortgage of real estate refers to acts that a
mortgagor provides the mortgagee security for the payment of a
debt with his legal real estate in the manner that the possession
of his real estate is not transferred. Where a debtor fails to pay
his debt, the mortgagee shall have the right in accordance with the
law to enjoy the priority in compensation to be paid with funds
obtained from auction of the real estate
mortgaged.

    Article 47  A mortgage may be created on the ownership of a house
obtained according to law together with the land-use right to the
house site.

    A mortgage may be created on the land-use right obtained by
mode of granting.

    Article 48  The mortgage of real estate shall be dealt with on
the strength of the certificate of the land-use right and the
certificate of ownership of the house.

    Article 49  For the mortgage of real estate, the mortgagor and
the mortgagee shall enter into a written mortgage contract.

    Article 50  Where the land-use right on which a mortgage is
created is obtained by mode of allocation, the mortgagee may
enjoy the priority in compensation only after the amount equal to
the fees for the granting of the land-use right is paid from the
funds obtained from auction of the real estate done in accordance
with the law.

    Article 51  After a contract for the mortgage of the real
estate is concluded, newly-built houses on the land shall not be
regarded as the mortgaged asset. If the mortgaged real estate
needs to be sold by auction, the newly-built houses on the land may
be auctioned off according to law together with the mortgaged
assets. However, the mortgagee shall not have the priority in
compensation with respect to the funds obtained from auction of the
newly-built houses.

    Section 4  Lease of Houses

    Article 52  Lease of houses refers to acts that an owner of a
house in the capacity of a leaser leases his house to a leasee for
use and the leasee pays rent for the house to the leaser.

    Article 53  In the lease of a house, the leaser and the leasee
shall conclude a written lease contract defining such matters as
the term, purpose, and price of the lease, liability for repair, as
well as other rights and obligations of both parties, and shall
register the lease with the department of housing administration
for the record.

    Article 54  Lease of residential houses shall be carried out in
accordance with policies on lease formulated by the State and the
people's government of the city where the houses are located.
Where houses are leased for activities of production and business
operation, the rent and other terms for the lease shall be
determined by both parties through consultation.

    Article 55  Where an owner of a house, for profit-making
purposes, leases the house built on the State-owned land, the
land-use right for which is obtained by mode of allocation, he
shall turn over to the State the proceeds derived from the land and
contained in the rent. The specific measures shall be prescribed by
the State Council.

    Section 5  Intermediary Service Agencies

    Article 56  Intermediary service agencies for real estate
include real estate consultant agencies, real estate price
appraisal agencies and real estate broking agencies.

    Article 57  Intermediary service agencies for real estate shall
meet the following conditions:

    1. to have names and institutional structures of their own;

    2. to have fixed premises to provide services;

    3. to have necessary property and funds;

    4. to have sufficient professional personnel; and

    5. other conditions provided by laws, administrative rules and
regulations.

    For establishing an intermediary service agency for real
estate, an application for registration of the establishment shall
be submitted to the administrative department for industry and
commerce and a business licence shall be obtained, before it starts
its business.

    Article 58  The State shall practise a qualification
authentication system for real estate price appraisers.        
Chapter V  Administration of Real Estate Ownership Registration

    Article 59  The State shall practise a system of registration
and certification for land-use right and ownership of houses.

    Article 60  Where the land-use right is obtained by mode of granting or allocation, an application for registration shall be
submitted to the department of land administration under the local
people's government at or above the county level. Upon
verification by the department of land administration under the
local people's government at or above the county level, the
certificate of the land-use right shall be issued by the people's
government at the corresponding level.

    Where a house is built on the land for real estate development
obtained pursuant to the law, an application for registration
shall, on the strength of the certificate of land-use right, be
submitted to the department of housing administration under the
local people's government at or above the county level. The
department of housing administration under the local people's
government at or above the country level shall issue the
certificate of ownership of the house after verification.

    Where transfer or modification of real estate is made, an
application for registration of the modification of house property
shall be submitted to the department of housing administration
under the local people's government at or above the county level
and on the strength of the certificate of the ownership of the
house after modification, an application for registration of the
modification of the land-use right shall be submitted to the
department of land administration under the people's government at
the corresponding level. Upon verification by the department  of land administration under the people's government at the
corresponding level, a new or a modified certificate of the
land-use right shall be issued by the people's government at the
corresponding level.

    Where provided otherwise by laws, the provisions of relevant
laws shall apply.

    Article 61  Where real estate is mortgaged, registration of mortgage shall be made with the department designated by the
local people's government at or above the county level.

    Where the land-use right and the ownership of a house are
obtained from disposal of mortgaged real estate, the change of
ownership for the land-use right and the house shall be registered
in accordance with the provisions of this Chapter.

    Article 62  Where a department of the local people's government
at or above the county level is in charge of both housing
administration and land administration as determined by the
people's government of the relevant province, autonomous region or
municipality directly under the Central Government, such department
may make and issue the uniform certificate of the ownership of real
estate, in which the confirmation and modification of the ownership
of houses and the land-use right of the house site shall be
recorded respectively in accordance with the provisions of Article
60 of this Law.
Chapter VI  Legal Liability

    Article 63  Where anyone, in violation of the provisions of Article 10 or Article 11 of this Law, approves without
authorization the granting of land-use right or grants land-use
right without due approval for development of real estate, the
person who is held responsible shall be given an administrative
sanction by an organ at a higher level or by the unit to which he
belongs.

    Article 64  Whoever, in violation of the provisions of Article
29 of this Law, engages in business of real estate development
without obtaining a business license shall be ordered to stop
activities of real estate development and confiscated of his
unlawful proceeds and may be concurrently imposed a fine by the
administrative department for industry and commerce under the
people's government  at or above the county level.

    Article 65  Whoever, in violation of the provisions of paragraph 1 of Article 38 of this Law, transfers the land-use right
shall be confiscated of his unlawful proceeds and may be
concurrently imposed a fine by the department of land
administration under the people's government at or above the county
level.

    Article 66  Whoever, in violation of the provisions of paragraph 1 of Article 39 of this Law, transfers real estate shall
be ordered to pay the fees for the granting of the land-use
right, confiscated of his unlawful proceeds and may concurrently
be imposed a fine by the department of land administration under
the people's government at or above the county level.

    Article 67  Whoever, in violation of the provisions of paragraph 1 of Article 44 of this Law, pre-sells commercial houses
shall be ordered to stop activities of presale, confiscated of his
unlawful proceeds and may concurrently be imposed a fine by the
department of housing administration under the people's government
at or above the county level.

    Article 68  Whoever, in violation of the provisions of Article
57 of this Law, engages in intermediary services for real estate
business without obtaining a business license shall be ordered to
stop activities of intermediary services for real estate business,
confiscated of his unlawful proceeds and may concurrently be
imposed a fine by the administrative department for industry and
commerce under the people's government at or above the county
level.

    Article 69  Whoever collects fees from a real estate
development enterprise without the basis of laws, rules and
regulations shall be ordered by the organ at a higher level to
return the fees thus collected; if the circumstances are serious,
the person who is held directly responsible shall be given an
administrative sanction by the organ at a higher level or by the
unit to which he belongs.

    Article 70  Where functionaries of departments of housing
administration or land administration commit negligence of duty
or abuse of power and the case constitutes a crime, they shall be
investigated for criminal responsibilities in accordance with the
law; if the case does not constitute a crime, they shall be given
administrative sanctions.

    Where functionaries of departments of housing administration or
land administration take advantage of their functions and powers to
extort money or properties from others or to illegally receive
money or properties from others, thus seeking gains for others, and
the case constitutes a crime, they shall be investigated for
criminal responsibilities in accordance with the supplementary
provisions on punishing crimes of embezzlement and bribery; if the
case does not constitute a crime, they shall be given administrative
sanctions.
Chapter VII  Supplementary Provisions

    Article 71  Obtaining the land-use right for development of real estate, engaging in development of real estate and transaction
of real estate, and exercising administration of real estate in the
State-owned land outside of a planned urban district shall be
carried out by making reference to this Law.

    Article 72  This Law shall enter into force as of January 1,
1995.



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