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Law of the Peoples Republic of China on the Administration of the Urban Real Estate (Adopted at the Eighth Meeting of the Standing Committee of the Eighth National Peoples Congress on July 5, 1994 and promulgated by Order No.29 of the President of the Peoples Republic of China on July 5, 1994) 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 ProvisionsArticle 1 This Law is formulated in order to strengthen the 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 sound 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 Peoples 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 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 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 peoples governments at or above the county level shall be determined by the peoples governments of provinces, autonomous regions or municipalities directly under the Central Government. Chapter II Land Used for Development of Real EstateSection 1 Granting of the Land-use RightArticle 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 peoples 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 peoples 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 regulations of the State Council, be reported to the State Council or the provincial peoples government for approval. Article 11 Granting of the land-use right shall be carried out by the peoples 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 peoples 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 regulations of the State Council, be implemented by the departments of land administration under the peoples governments of the cities or counties after their submission to and approval by the peoples governments with due authority for approval. Limits of authority as provided in the preceding paragraph for the peoples governments and their departments concerned of the counties under the municipalities directly under the Central Government shall be prescribed by the peoples governments of the municipalities directly under the Central Government. Article 12 The land-use right may be granted by means of auction, bidding or agreement between the two parties. For Land used for commercial, tourism, recreation and luxury housing purposes, where conditions permit, the means of auction or bidding shall be adopted; where conditions do not permit and it is impossible to adopt the means of auction or bidding, the means of agreement between the two parties may be adopted. Fees for granting the land-use right by means of agreement between the two parties shall not be lower than the lowest price determined in accordance with the regulations 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 peoples 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. In default of such payments, 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 peoples government of the city or county must provide the land granted as agreed upon in the granting contract; In default of such provision, 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 peoples 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 for 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 specified 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 specified 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 regulations. Where the term for the use of land specified in the contract for granting the land-use right expires, and the land user has not applied for an extension of the term or his application therefore 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 RightArticle 22 Allocation of the land-use right refers to acts that the peoples government at or above the county level, after the land user has paid compensation and expenses for resettlement, etc., approves in accordance with the law to allocate the land to the land user or gratuitously allocates the land-use right to the land user. Where the land-use right has been obtained by means of allocation in accordance with the provisions of this Law, except as otherwise provided by 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 peoples 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 utilities; (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 laws or administrative rules and regulations. Chapter III Development of Real EstateArticle 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 has been obtained by means 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 in 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 regulations 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. Registration shall not be made, where such conditions are not met. To establish a limited liability company or a joint stock limited company engaged in 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 peoples 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 regulations 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 EstateSection 1 General ConditionsArticle 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, truthfully report the transaction price to the department designated by the local peoples 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 EstateArticle 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 has been obtained by means of granting, however, not meeting conditions set forth in Article 38 of this Law; (2) The rights of real estate have been 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 has been 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 has not been registered in accordance with the law and the certificate of the ownership has not been 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 has been obtained by means of granting, transfer of the real estate shall meet the following conditions: (1) Having 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) Having invested for development as agreed upon in the granting contract and having fulfilled twenty-five percent or more of the total investment for development in the case of housing projects, or having 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 has been obtained by means of allocation, the transfer of the real estate shall, according to the regulations of the State Council, be reported for examination and approval to the peoples government that has the authority for approval. Upon approval of the transfer by the peoples 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 therefore according to the relevant regulations of the State. Where the land-use right has been obtained by means of allocation and where, when the transfer of the real estate is reported for approval, the peoples government that has the authority for approval decides in accordance with the regulations of the State Council that the formalities for granting the land-use right need not be gone through, the transferor shall, pursuant to the regulations 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 means 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 has been obtained by means of granting and after the real estate ha
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