Regulations of Shenzhen Special Economic Zone on Lease of Houses

 (Originally adopted at the thirteenth meeting of the Standing Committee of the First Shenzhen Municipal People' s Congress on December 26, 1992. Revised for the first time at the nineteenth meeting of the Standing Committee of the Second Shenzhen Municipal People' s Congress on December 17, 1997 in accordance with the Resolution on Revision of the Regulations of Shenzhen Special Zone on Lease of Houses. Revised for the second time at the fifteenth meeting of the Standing Committee of the Third Shenzhen Municipal People' s Congress on April 26, 2002 in accordance with the Resolution on Revision of the Regulations of Shenzhen Special Zone on Lease of Houses.)

Chapter¢ñ General Provision 

Article 1 In order to maintain the lease market order of Shenzhen Special Economic Zone (hereinafter referred to as "Special Zone" ) and protect lawful rights and interests of the parties, these regulations are formulated in accordance with the basic principles of laws and administrative regulations and the actual circumstances of  Special Zone,

Article 2 "Houses" in these regulations include dwelling-houses, industry and commerce houses, office houses, warehouses and houses for other uses.

   "Lease of houses" means the lessor provides the house to the lessee for the lessee' s use, and the lessee pays the rent to the lessor and returns the house to the lessor when the lease relationship ends.

   Article 3 The parties of house leasing shall abide by the principles of voluntariness, fairness, honesty and credibility to establish lease relationship.

   The parties of house leasing shall observe national laws and support the relevant departments to bring social security under control in a comprehensive way.

   Article 4  The administrative department in charge of real estate of Shenzhen Municipal People' s Government is the competent authority (hereinafter referred to as "the competent authority" ) of house leasing, the administrative departments in charge of house leasing designated by District People' s Government is District competent authority of house leasing. The District Competent Authority may establish detached offices at subdistricts. The municipal competent authority shall implement uniform administration of house leasing market.

  The Municipal and District Competent Authority shall perform the following duties:

      (1) To the carry out national laws and regulations on house leasing and these regulations; to draft administrative measures which shall take effect with approval by Municipal People' s Government in accordance with these regulations;

      (2) To register and administrate the house lease contracts in accordance with the provisions of these regulations;

      (3) To investigate and punish the illegal house leasing activities in accordance with the provisions of these regulations;

      (4) To mediate and settle disputes of house leasing according to the application of the parties of house leasing;

      (5) Other duties prescribed in laws and regulations or assigned by Municipal People' s Government.

   The District Competent Authorities shall perform the duties prescribed in these regulations and other duties assigned by the Municipal Competent Authorities. The Municipal Competent Authority shall strengthen the supervision and inspection of law enforcement and strengthen the direction to the District Competent Authority.

Article 5 House leasing shall be subject to Lease Contract Registration.

                Chapter ¢ò   Lease Administration

   Article 6 The parties who establish and alter the house leasing relation shall apply to the District Competent Authority for registration within ten days from the date that the lease contract is concluded.

   Article 7 The parties shall apply to the District Competent Authority for lease registration and submit the following documents:

   (1) The real estate ownership certificate or other valid instruments that testify the parties' property right ;

   (2) The house lease contract;

   (3)The identity certification or juristical competency certification of the lessor;

   (4) The identity certification or juristical competency certification of the lessee.

   Article 8 The District Competent Authority shall conduct registration within five days from the date receiving the lease registration application, if the application conforms to the provisions of these regulations; if the application fails to conform to the provisions of these regulations, the District Competent Authority shall not conduct registration and reply to the applicant in writing.

   If the District Competent Authority fails to make decision of approval or disapproval of registration within the time limit, the registration shall be considered to have conducted. The parties shall handle the registration formalities at the District Competent Authority within fifteen days from the date the time limit expired.

   The District Competent Authority shall submit the duplicate of the registered lease contract to the taxation department at the corresponding level for record within thirty days from the date of registration.

   Article 9 Under any of the following circumstances, the District Competent Authority shall not conduct registration:

   (1) The parties fail to conform to the provisions of Article23, Article33 of these regulations;

   (2) The parties alter the use of land and house without an approval of the relevant department;

   (3) The duration of the lease contract exceeds the regulated duration;

   (4) The duration of the lease contract exceeds the duration of land use;

   (5) The content of the lease contract violates the provisions of these regulations and other relevant laws.

   Article 10 It shall be considered as house leasing in the case that the lessor contracts the house to other persons to operate, or joins the operation indirectly, in name of cooperation and affiliation instead.

Article 11 The Municipal Competent Authority shall issue the directive rent of house leasing periodically according to the price level of house leasing on the market. The parties may bargain the amount of the rent taking the directive rent standard as referrance.

   Article 12 The lessor shall make up the deficiency in premium in line with the provisions of the Municipal Competent Authority, if the house built on the land whose purchasing price is allocated in administrative way or is reduced and remitted, is approved to be rent.

   Article 13 The lessor shall pay taxes on the basis of the provisions of the laws and regulations.

   Article 14 The lessor shall pay two percent of the monthly rent to District Competent Authority as house leasing management charge. The measures of the management charge payment shall be formulated by Shenzhen Municipal People' s Government.

   In case that the house is subleased and the sublease rent exceeds original rent, the sublessor shall pay the house leasing management charge about the margin part according to the standard prescribed by the preceding paragraph.

   The management charge of house leasing shall be used for the management of housing lease market and shall not be misappropriated for other uses. The surplus shall be turned over to Finance Department.

   Article 15 Taxation Department and the District Competent Authority shall take the directive rent as the accounting base when they impose concerned taxes or collect management charge of house leasing; in case that the rent agreed upon in lease contract exceeds the directive rent, the agreed rent in lease contract shall be taken as the accounting base.

   Article 16 The administrative personnel of the Competent Authority shall show their credentials uniformly made and issued by the Municipal Competent Authority when they carry out their official tasks.

Chapter ¢ó   Lease Contract

Article 17 The parties of house leasing shall use the formality of contract uniformly provided by Competent Authority. The parties may make addition and omission to the contents of the lease contract articles.

Article 18 The parties may entrust other persons to let or rent house.

The entrustee shall hold the authorized letter. The authorized letter of the parties abroad shall be notarized or certified according to the relevant stipulations.

Article 19 A lease contract shall contain the following main terms:

(1)    The name and address of the parties;

(2)    The location, size, decoration and facilities of the house;

(3)    The use of the house;

(4)    Duration of the lease;

(5)    Amount of rent and mode of payment;

(6)    The liability for maintenance of the house;

(7)    The agreement on decoration;

(8)    The agreement about sublease;

(9)    The conditions of canceling a contract;

(10)             Responsibility for breach of lease contract; and

(11)             Other terms agreed by the parties to the lease.

   In respect to item (4) of the preceding clause, the lease duration of houses for residence shall not exceed eight years; lease duration of houses for other uses shall not exceed fifteen years. The lease duration shall be prolonged with the approval of the Municipal Competent Authority if it needs to exceed limitation mentioned above under special circumstances.

Article 20 Once signed in conformity with the law, the lease contract shall take effect. The parties shall make full performance. Anyone of the parties shall not alter or cancel the contract.

Article 21 The lease contract are allowed to be altered or the cancel under the following circumstances:

(1)     The contract can not be performed or not fully performed because of force majeure;

(2)     The parties reach unanimity through consultation;

(3)     Anyone of the parties has reasonable grounds to alter or cancel;

(4)     Anyone of the parties loses the qualification stipulated in Article23, Article33 of these regulations;

  The party that is at fault shall bear the liability if he causes losses to the other party by altering or the canceling lease contract; if both of the parties are at fault, each party shall respectively be liable.

Article 22  In case that the lessee is deceased during the term of the lease and the person lives with him are willing to inherit original lease relation, the lessor shall continue to perform the original lease contract.

   If the lessor is deceased or terminated during the term of the lease, or is altered with the conveyance of the property right of the lease house, his/her legitimate inheritor or successor-in-interest shall continue to perform the lease contract.

Article 23 The lease contract shall terminate at the expiration of the term of the lease.

    If the parties need to continue the lease relation at the expiration of the term of the lease, they shall present the claim one month before the termination of the lease contract, resign a lease contract ten days before the termination of the lease contract and apply for registration in line with the provisions of Article 6 in these regulations.

Chapter ¢ô  The Lessor and Its Rights and Liabilities

Article 24 The lessor shall be the owner or the legitimate user of the house.

Article 25 The lessor shall provide the house to the lessee at the time as agreed in the lease contract.

    The lessor may collect the lease guaranty bond from the lessee, which shall not excess the amount of three month rents, as agreed in the lease contract. The ways of returning the guaranty bond shall be engaged by the parties in the lease contract.

    In case that the lessor fails to provide the house to the lessee as agreed in the lease contract, or the house provided by the lessor fails to conform to the commitment of the lease contract, the lessor shall pay breach of contract damages agreed in the lease contract. If the breach of contract damages is insufficient to compensate for losses of the lessee caused therefrom, the lessor shall make up for the deficiency.

Article 26 When the house under co-ownership is for lease, the other co-owners shall have the priority to lease the house under the same conditions.

Article 27 The lessor shall collect the rent from the lessee as agreed in the lease contract.

   The lessor shall draw the invoice that uniformly printed by the Taxation Department when he collects the rent.

   The lessor shall not collect other charges from the lessee except the rent in respect to house leasing.

Article 28 The lessor has right to supervise the lessee' s use of the house.

    The lessor shall not make disturbance or obstruction to the lessee' s normal and reasonable use of the house.

Article 29 The lessor has right to cancel the lease contract if the lessee commits any of the following acts:

(1)   Using the house to conduct illegal activities which may cause damages to the public interest and the interest of other person;

(2)   Altering the house' s structure or the agreed usage without authorization;

(3)   Subleasing the house to the third party without authorization;

(4)   The rent has not paid yet exceeding the term agreed in the contract; or delaying to pay the rent for more than three months if there is no provisions in the contracts.

    If the lessor suffers damage because of the behaviors mentioned above, the lessor has right to claim for compensation from the lessee.

Article 30 The lessor has the duty to check and maintain the house and its facilities, and guarantee security of the house as agreed in the lease contract.

Article 31 The lessor shall obtain the consent of the lessee to reconstruct, extend or decorate the house; if approval by relevant departments is required according to  regulations, the lessor shall submit the application to relevant departments for approval.

Article 32 The house leasing shall not hamper the conveyance of the real estate right.

    After the conveyance of the real property right, the transferee shall bear the obligations of the former lessor and enjoy the rights of the former lessor, unless otherwise provided by laws and regulations.

Article 33 If, upon the expiration of the term of the lease no new lease contract is signed, the lessor has the right to take back the house in accordance with the term agreed in the event that the lessor cancels the lease contract because the lessee violates Article29 of these regulations, the lessor has the right to take back the house.    If the lessee does not move out the house at the expiration of the term without consent of the lessor, in addition to handling in accordance with Article43 of these regulations, the lessor may ask the District Competent Authority to issue a notification of moving out within the time limit to the lessee and may bring a lawsuit to the People' s Court.

Chapter ¢õ  The lessee and his rights and obligations

Article 34 Natural person, legal person and other organizations shall offer the lease contract registered by the District Competent Authority, if they apply to the Public Security Department for the temporary residence certificate of Shenzhen, apply to Industry and Commerce Administration Departments for business license, or apply to the relevant department for the effective certification of establishment where the certification of the house leasing is required to provide according to laws and regulations. 

Article 35 The lessee shall pay the rent to the lessor in accordance with the terms in the lease contract.

    The lessee shall pay the prescribed breach of contract damages if he violates the preceding paragraph.

Article 36 The lessee shall have the right to refuse to pay part or full of rent and cancel the lease contract if the lessor commits any of the following behaviors:

(1)  Violating the provision of the item (1) of Article25 in these regulations;

(2)  Violating the provision of the item (3) of Article27 in these regulations;

(3)  Violating the provision of the item (2) of Article28 in these regulations;

(4)  Violating the provision of Article30 in these regulations.

Article 37 If the lessee fails to exercise the right of use the house due to his own reason, the lessee shall not be exempt from the obligation of paying the rent.

Article 38 The lessee shall use the house reasonably according to the provisions of the lease contract and shall not alter construct and use of the house without authorization.

    The lessee shall obtain the consent of the lessor if there is necessary to change the use of house or decorating the house; if the approval of the change and decoration of the house by relevant authorities is required under provisions, the lessee shall file an application for approval and shall be liable for the expenses brought about therefrom.

Article 39 In case that the house' s faults defect effects the normal use of the house during the term of the lease, the lessee shall take effective measures to prevent the defect from enlarging, notify the lessor in writing immediately and apply to the District Competent Authority for record.

    If the lessor fails to repair the house after receiving the written notice from the lessee, the lessee shall apply to the District Competent Authority for instantaneous examination and verification and may repair it by himself with approval of the District Competent Authority. The expenses brought about therefrom shall be borne by the lessor.

    If the lessee has a dispute with the lessor over the defect mentioned in paragraph one of this article, he may apply to the relevant department for appraisal.

Article 40 If the lessee causes damages to the house because of his improper use, he shall be responsible for repairs and the expenses brought about therefrom.

Article 41 If the lessee moves out the house by himself without canceling the lease relation during the lease, and whereafter, the third party occupies and uses the house, which results in damages to the house, the lessee and the third person shall both bear joint and several liability for compensation.

Article 42 After the expiration of the lease term, the lessee may put forward to the lessor the offer for renewal of lease in accordance with the Article23 of these regulations. The lessee shall have the priority to rent the house under the same conditions.

Article 43 The lessee shall pay double rent to the lessor if lease term expires, or he fails to move out of the house without consent of the lessor or without the agreement for renewal of lease between the parties in violation of Article29 of these regulations; if the lessee causes damages to the lessor, he shall bear the responsibility for compensation. 

Article 44 If the lessor sells the leased house, he shall notify the lessee in writting one month before sale; the lessee has the priority to buy the house on the same conditions.

Chapter¢ö     Sublease

Article 45 With the consent of the lessor, the lessee may sublease part or whole of the leased house to the third party.

    The lessee shall not sublease the house without the consent of the lessor.

Article 46 Sublessee shall abide by the provisions of Article34 of these regulations.

    Sublessee shall not sublease the leased house again.

Article 47 Sublessor and sublessee shall conclude the lease contract according to the provisions of these regulations and apply for registration.

Article 48 The deadline of the sublease contract shall not exceed the deadline of the original lease contract.

Article 49 Once the lease sublease contract takes effect, the sublessor shall enjoy the rights and bear the obligations referring to the rights and obligations of the lessor that prescribed in Chapter Four and shall continue to perform the obligations agreed in the original contract; subleassee shall enjoy the rights and bear the obligations referring to the rights and obligations of the lessee that prescribed in Chapter Five, unless otherwise provided in these regulations or agreed in the contract.

    Sublessor and sublessee shall bear the joint and several liability to the original lessor.

Article 50 If during the term of sublease, the original lease contract is modified, canceled and terminated, the sublease contract shall be modified, canceled and terminated accordingly.

Chapter ¢÷    Legal Responsibility

Article 51 If the parties disagree to the reply of disapproval of registration made by the District Competent Authority, they may apply for reconsideration to the Municipal Competent Authority within fifteen days from the day receiving the answer notification. If the applicant disagrees on the decision of reconsideration, he may bring a lawsuit to the People' s Count within fifteen days from the day receiving the notification of decision of reconsideration.

Article 52 If the parties have disputes, they shall settle the disputes through consultation; if they fail to consult, they may apply to the Municipal Competent Authority or the District Competent Authority for conciliation, appeal to arbitration at arbitral agency or bring a lawsuit to the People' s Court.

Article 53 If the house is leased without registration in violation of Article 6, Article 47 of these regulations, the sublessor and sublessee shall be penalized with a fine of an amount not less than one time but not more than two times the amount of monthly rent, and shall be recovered the charge for management and, the fine for delaying payment; the sublessor and sublessee who has faults shall be penalized a fine not more than one time the amount of lunar rent.

Article 54 If the lessee violates the provisions of Article 45(2) or the sublessee violates Article 46(2) of these regulations, he shall be confiscated his unlawful gains and be penalized a fine of not more than one time the amount of monthly rent.

Article 55 If the sublessor and sublessee violates the provisions of Article 13, Article 27(2), the taxation department shall handle such such cases according to the relevant stipulations.

Article 56 If the sublessor and sublessee fails to pay or delays paying the charge for the management of the lease house in violation of the provisions of Article 14(1)(2), the competent authority shall order him to pay and, for each delaying day, collect 3¡ë of the amount of the management charge that should be paid as the fine for delaying payment.

Article 57 If the parties disagree to the sanction made by the relevant administration department, they shall apply for reconsideration to relevant departments within fifteen days from the day receiving the notice of penalty decision. If the applicant disagrees to the decision of reconsideration, he may bring a lawsuit to the People 's Count.

    In respect of the administrative penalty decision that takes effect, the competent authority may apply the People' s Count for coercive execution.

Article 58 If the Competent Authority embezzles the charge for management of the lease house in violation of Article 14(3) of these regulations, the Audit Department shall recover the whole money that embezzled. The person direct liable and the leader in charge shall be given disciplinary sanction by their units or by superior administration departments in charge of their units. If their wrongful act constitutes a crime, they shall be prosecuted for criminal liability.

Article 59 If the management official in the competent authority neglects his duty and commits fraudulent acts for personal gains, he shall be subject to disciplinary sanction by his units or by superior administrative departments in charge of his units. If his wrongful act constitutes a crime, he shall be prosecuted for criminal liability.

Chapter ¢ø   Supplementary Provisions

Article 60 If the lease contract has been signed, however, the registration formalities has not been handled before the enforcement of these regulations, the parties shall handle the registration formalities according to the provisions of these regulations within three months from the date on which these regulations take effect. If the parties fail to handle in the prescribed period of time, such cases shall be settled in line with the provision of Article53 of these regulations.

Article 61 People' s Government of Shenzhen Municipality may enact detailed rules for implementation in accordance with these regulations.

Article 62 These regulations shall take effect as the day of May 1,1993.

   Where there are contradictions between the provisions of these regulations and other relevant rules that enacted in the Special Zone before, these regulations shall prevail.