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Law of the People’s Republic ofChina on Urban Real Estate Administration

《中华人民共和国城市房地产管理法》

(adopted by the 8thmeeting of the Standing Committee of the 8th National People’s Congress on July5, 1994 and amended according to the Decision on Amending the Law of the People’sRepublic of China on Urban Real Estate Administration which was adopted at the29th meeting of the standing committee of the 10th National People’s Congressof the People’s Republic of China on August 30th, 2007)

CONTENTS

CHAPTER I GENERALPRINCIPLES
CHAPTER II LAND FOR REAL ESTATE DEVELOPMENT
PART 1 LEASING OF RIGHT OF LAND USE
PART 2 ALLOCATION OF RIGHT TO USE LAND
CHAPTER III REAL ESTATE DEVELOPMENT
CHAPTER IV TRANSACTIONS OF REAL ESTATE
PART 1 GENERAL PROVISIONS
PART 2 TRANSFER OF REAL ESTATE
PART 3 MORTGAGE OF REAL ESTATE
PART 4 LEASING OF HOUSES
PART 5 INTERMEDIATE SERVICE AGENCIES
CHAPTER V REGISTRATION OF REAL ESTATE TITLE
CHAPTER VI LEGAL LIABILITIES
CHAPTER VII SUPPLEMENTARY PROVISIONS

CHAPTER I GENERALPRINCIPLES

Article 1 This law isformulated for the purpose of safeguarding the real estate market order,protecting lawful rights and interests of real estate owners and promotinghealthy development of the real estate industry through a strengthening ofurban real estate administration.

Article 2 Those whoacquire the right to use the State-owned land within the designated urban areaof the People’s Republic of China (hereinafter referred to as" State-ownedland") for real estate development, engage in real estate development ortransactions of real estate and exercise real estate administration shall abideby the law.

The buildingsreferred to in this law shall mean houses and other structures on the land.

The real estatedevelopment referred to in this law shall mean the activities of constructionof infrastructures and buildings on the land that the right to use theState-owned land has been assigned in accordance with this law.

The transactions ofreal estate referred to in this law shall mean transfer of real estate, mortgageof real estate and leasing of buildings.

Article 3 The Statepractices system of using State-owned lands under due compensation and terms ofusing the land except the use of State- owned land allocated by the Stateaccording to this law.

Article 4 The Stateshall, in accordance with the social and economic development level, supportsconstruction of residential houses to gradually improve the living conditionsof local residents.

Article 5 Real estateowners shall abide by the laws and administrative decrees and pay tax accordingto the law. The lawful rights and interests of real estate owners are protectedby the law against any infringement by institutes and individuals.

Article 6 For publicinterests, the state can expropriate any entity or individual’s house built onstate-owned land, but the state shall give relocation compensations accordingto law and safeguard the legitimate rights and interests of the entity orindividual. If an individual’s residential house is to be expropriated, the stateshall guarantee the housing conditions of the individual. The specific measuresshall be formulated by the State Council.

Article 7 Theadministrative department in charge of construction and the land administrationdepartment of the State Council shall administer the work of real estatenationwide individually or cooperatively under their own powers.

The organizationalset-up and power of the reall estate administration and land administrationdepartments of the local people’s governments above the county level shall bedetermined by the provincial, autonomous regional or municipal people’sgovernments.

CHAPTER II LAND FORREAL ESTATE DEVELOPMENT

PART I LEASING OFRIGHT OF LAND USE

Article 8 Leasing theright of land use means that the State leases the right of using theState-owned land to land users within a certain period and the land users shallpay the State fees for using the land.

Article 9 For acollectively-owned land within a designated urban area, it must berequisitioned and turned into State-owned land in accordance with law first andthen for leasing out to land users with due compensation.

Article 10 The leaseout of land for use must comply with the overall land use plan, the urban planand the annual construction land use plan.

Article 11 Forleasing out the right of their land for real estate development, they people’sgovernment above the country level must first of all draft plans of total areasof land to be leased out in a year in accordance with the control quotasassigned by the people’s government at or above the provincial level, andfollowing the provisions of the State Council, report to the State Council orprovincial-level people’s government for endorsement.

Article 12 The rightto use land shall be leased step by step in a planned manner by city or countypeople’s governments. A city or county people’s government and the urbanplanning, construction and real estate administration departments shall jointlydraft a plan on the tracts of land to be leased out with their uses, term ofuse and other conditions, and following the provisions of the State Council,report to the empowered people’s government for approval and then hand down theplan to the land administration department of the city or county people’sgovernment for execution.

The power consignedto county people’s governments and the relevant departments of the municipalitydirectly under Central Government for execution as referred to in the aboveparagraph shall be determined by the municipal people’s government.

Article 13 The rightof use land shall be leased through auction, bidding or negotiations betweenthe related parties.

The right to use theland for construction of commercial, tourist, recreational facilities or luxuryhousing must be leased out through auction or bidding, when conditions permit;when conditions do not permit and auction or bidding cannot be adopted, it maybe leased through negotiations between the related parties.

Prices for the use ofthe land leased out through negotiations between related parties shall not belower than the bottom price stipulated by the State provisions.

Article 14 Themaximum term of land use shall be stipulated by the State Council.

Article 15 A written contract for the lease shallbe signed on the lease of the right to use land.

The contract for thelease of the right to use land shall be signed by the land administrationdepartment of a city or county people’s government and land users.

Article 16 Land usersshall pay the lease fees of the right to use land in accordance with thecontracts signed for the lease; when one fails to pay the fees for the use ofthe land in accordance with the related contract of the lease, the landadministration department has the right to rescind the contract and ask forcompensation for violation of the contract.

Article 17 When landusers pay the lease fees for the right of land use in accordance with thecontract for the lease, the land administration department of a city or countypeople’s government must provide the land in accordance with the contract forthe lease; when the land is not provided in accordance with the contract forthe lease, the land user has the right to cancel the contract with the feehanded over for the use to be returned by the land administration departmentand the land user may also ask for compensation for the violation of thecontract.

Article 18 Land userswho need to change the use of the land prescribed by the contract must first ofall get the consent from the land lessor and the urban planning department ofthe city or county people’s government, sign an agreement for revision of thecontract for the lease of the right to use land or sign a new contract for thelease of the right to use land and readjust the lease fees of the right to useland accordingly.

Article 19 Lease feesfor the right of land use must be handed over to the financial department to beentered into the budget and used for the construction of urban infrastructuresand land development. The hand- over procedure and the use of the lease feesfor the right of land use shall be stipulated by the State Council.

Article 20 The Stateshall not take back the right of land use that the land users have obtained inaccordance with the law before the expiration of the agreed term prescribed inthe contract; under special circumstances, the State may take back the land inadvance out of public interest consideration in accordance with legalprocedures and corresponding compensation shall be given to the related landuser in accordance with the real term that the land had been used and the realconditions of the land development.

Article 21 The rightof land use shall terminate with extinction of the land.

Article 22 Upon acontinuous use of the land after expiration of the agreed term prescribed bythe contract, the land user has to apply for extension at least one year beforethe expiration of the term. The application shall be approved except that thetract of land needs to be taken back out of public interest consideration. Whenextension is approved, it is necessary to re-sign a contract for the use of theland and pay fees accordingly for the use in accordance with the provisions.

When the agreed termprescribed by the contract for use of the land expires and the land user hasnot applied for extension or the application for extension has not beenapproved in accordance with the provision of the above paragraph, the right touse the land shall be returned to the State gratis.

PART II ALLOCATION OFRIGHT TO USE LAND

Article 23 The allocationof the right to use land shall mean the hand over of a tract of land by thepeople’s governments above the county level for use by a land user inaccordance with the law for compensation, settlement, etc. or gratis.

The right of land useobtained through allocation in accordance with this law, except thoseprescribed otherwise by the laws and administrative rules, has no time limit.

Article 24 The rightof land use for construction of the following projects, may be allocated by thepeople’s governments above the country level when necessary:

(1) land used byState organs of for military purpose;

(2) land used forconstruction of urban infrastructures and public utility;

(3) land used forconstruction of the State-supported key energy, transport and water conservancyprojects; and

(4)land used forother purpose stipulated by the laws and administrative rules.

CHAPTER III REALESTATE DEVELOPMENT

Article 25 Realestate development should be made in strict accordance with the urbandeveloping plan under an overall planning, rational layout, comprehensivedevelopment and balanced construction of all facilities to achieve anintegration of economic, social land environmental effect.

Article 26 Those whohave obtained the right of land use through lease for real estate developmentmust develop the land in accordance with the use and term as prescribed by thecontract for the land use. When the development has not started one year laterthan the date for starting the development as prescribed by the contract, anidle land fee less than 20 percent of the lease fees for land use may becollected and when the development has not started two years later, the rightto use the land may be taken back without any compensation, except that thedelays are caused by force majeure, the activities of government orgovernmental departments, or the necessary preparatory work for starting thedevelopment.

Article 27 The designand construction of a real estate development project must comply with theState relevant standards and norms.

After its completion,a real estate development project must be inspected and accepted before it canbe put into operation.

Article 28 The rightto use a land obtained in accordance with the law may be evaluated to be turnedinto shares for a joint equity of cooperative real estate venture in accordancewith this law, the relevant laws and administrative decrees.

Article 29 The Stateadopts preferential tax and other measures to encourage and support real estatedevelopment enterprises to develop and build residential buildings.

Article 30 A real estate development enterpriseshall mean an enterprise engaged in development and operation of real estatefor the purpose of profit. The establishment of a real estate developmententerprise shall have the following conditions:

(1) Its own name andorganization;

(2) A fixed site forbusiness operations;

(3)The registeredcapital complying with provisions of the State Council;

(4) Sufficientprofessionals and technicians; and

(5) Other conditions prescribedby the law and administrative decrees.

To establish a realestate development enterprise, a registration should be made with theAdministration for Industry and Commerce. The Administration for Industry andCommerce shall handle registration procedures of those which comply withconditions as prescribed by this law and issue licenses to them; and refuse tohandle registration procedures of those which do not comply with conditionsprescribed by this law.

Those which establisha limited liability company or limited stock company to engage in real estatedevelopment and operations shall also execute the relevant provisions of theCorporate Law.

A real estateenterprise shall report for record to a department designated by the people’sgovernment above county level where the registration department is locatedwithin one months after obtaining the license.

Article 31 The ratiobetween the registered capital and the total investment of a real estateenterprise must comply with the relevant State provisions.

When a real estateenterprise develops a real estate project in phases, the amount of investmentin each phase shall suit the project scale of that phase and, in accordancewith the provisions of the contract for the lease of the right to use land,funds shall be put into construction on schedule.

CHAPTER IVTRANSACTIONS OF REAL ESTATE

PART 1 GENERALPROVISIONS

Article 32 When areal estate is transferred or mortgaged, the ownership of the building and theright to use the land occupied by the building are transferred or mortgaged atthe same time.

Article 33 Thestandard land prices, the nominal land prices and the appraised prices ofvarious buildings shall be determined and published regularly. The specificmethods shall be stipulated by the State Council.

Article 34 The Stateinstitutes a real estate price evaluation system.

The evaluation ofprice for a real estate follows the principles of being just, fair and publicin accordance with the technological standards and evaluation procedures asstipulated by the State basing on the standard land price, nominal land priceand the appraised prices of various buildings and referred to the local marketprices.

Article 35 The Stateinstitutes a report schedule for real estate transacted price.

Owners of real estateright who transfer real estate shall report the real settlement price to thedepartment designated by the local people’s government above the county level.None shall conceal a transfer or make untrue report.

Article 36 When areal estate is transferred or mortgaged, the parties involved shall go throughthe title registration procedures in accordance with the provisions of ChapterV of this law.

PART 2 TRANSFER OFREAL ESTATE

Article 37 Transferof real estate shall mean the move of the ownership of a real estate from theoriginal owner to another person through sale, donation and other lawful means.

Article 38 Realestate with following conditions shall not be transferred:

(1) The acquirementof the right of land use through lease does not comply with conditions asprescribed in Article 39 of this law;

(2) The title to thereal estate has been sealed up or restricted in any form upon ruling ordeciding of judicial authorities or administrative departments in accordancewith the law;

(3) The right of landuse has been taken back in accordance with the law;

(4) Without a writtenconsent of other owners as under joint ownership;

(5) There aredisputes on the title;

(6) Those which havenot been registered and obtained title certificates in accordance with the law;and

(7) Other conditionthat the transfer is forbidden according to the law or administrative rules.

Article 39 Thetransfer of real estate with the right of land use shall comply with thefollowing conditions:

(1) All the fees inconcern with the lease of the right of land use have been paid in accordancewith provisions prescribed by the contract for the lease and the certificate ofthe right to use the land has been obtained; and

(2) Investment anddevelopment have been done in accordance with the provisions prescribed by thecontract for the lease; for housing construction projects, 25 percent of thetotal investment has gone through; for development of large tracts of land,land has been available for the construction of industrial or other projects.

When a real estate istransferred with a finished building, title certificate for the building isalso needed.

Article 40 Whentransfer of a real estate with the right of land use being obtained throughallocation, an application should be submitted to an empowered people’sgovernment for approval, in accordance with the provisions of the State Councilgovernment. After the approval by a related people’s government, the transfereeshall go through the procedures for transfer of the right of land use and paylease fees for land use in accordance with the relevant State provisions.

If the relatedpeople’s government refuses to carry out the procedures of the transfer ofright of land use in accordance with the provisions of the State Council, thetransferor shall, in accordance with the provisions of the State Council, handover the income for transfer of the land arising form the transfer of realestate to the State or handle them otherwise.

Article 41 A written contract must be signed inreal estate transfer, and the contract shall carry the clause on the form ofobtaining the right of land use.

Article 42 When areal estate is transferred, the rights and obligations carried in the contractfor the lease of the right of land use are transferred accordingly.

Article 43 Whentransfer of a real estate with the right of land use obtained through lease,the term of the right to use the land is the remaining time of the termprescribed by the original contract after deducting the time that the land hasbeen actually used by the original land user.

Article 44 After thetransfer of a real estate with the right of land use obtained through lease, ifthe transferee wants to change the use of the land prescribed by the originalcontract for the lease of the right of land use a consent must be acquired fromthe transferor and the urban planning department of the city county people’sgovernment with an agreement signed on revision of the contract or a signing ofa contract with an adjustment of the lease fees of the right of land use.

Article 45 Anadvanced sale of commodity houses must meet the following conditions:

(1) All the leasefees of the right of land use have been paid and a land use certificate hasbeen obtained;

(2) A constructionplanning permit has been held;

(3) Funds put forconstruction of the houses for advanced sale have exceeded 25 percent of thetotal budgetary investment for the project and the construction schedule anddate of completion of the project have been set; and

(4) An advance salesregistration has been made with the real estate administration of the people’sgovernment above the county level and a permit of advance sales of commoditieshouse has been obtained.

The advance seller ofthe commodity houses shall, in accordance with the relevant State provisions,report the advance sales contracts for record to real estate administration andland administration departments of the people’s government above the countylevel.

The funds derivedfrom advance sales of commodity houses must be used in construction of therelevant projects.

Article 46 Theprocedures for the transfer of houses in advance sales by the buyers of thehouses will be stipulated by the State Council.

PART 3 MORTGAGE OFREAL ESTATE

Article 47 Mortgageof real estate shall mean provision of legal real estate in non-transfer modeby the debtor to mortgagee as guarantee of debt payment. When the debtor failsto carry out the debt service, the mortgagee has the priority of being paidback first through the auction of the mortgaged real estate according to law.

Article 48 The titleof a housing property plus the right to use the land occupied by the housingproperty obtained lawfully may be designated as mortgage right.

The right to use landobtained through lease may be used as a mortgage.

Article 49 Themortgage of real estate shall be made upon the presentation of the land usecertificate and housing property title certificate.

Article 50 In mortgage of real estate, themortgagor and mortgagee shall sign a written mortgage contract.

Article 51 In mortgage of real estate with theright of land use obtained through allocation, the mortgagor has the priorityto be paid first only after a fund equivalent to the lease fees for the rightto use the land has been paid upon an auction of the real estate according tolaw.

Article 52 After areal estate mortgage contract is signed, the newly added housing property onthe land does not belong to the mortgaged property. When the mortgaged realestate must be auctioned, the newly added housing property may be auctionedtogether with the mortgaged property, but for the fund derived from the auctionof the newly added housing property, the mortgagee has not the priority forfirst payment.

PART 4 LEASING OF HOUSES

Article 53 Theleasing of houses shall mean ranting of houses with a certain amount of rentalpaid by lessees to the lessors.

Article 54 Whenleasing a house, the lessor and lessee shall sign a written lease contract,prescribing such provisions as the leasing term, use of the house, rental andrepair liabilities, and other rights and obligations of both parties; and gothrough registration procedures for record with the real estate administrationdepartment.

Article 55 Whenleasing a residential house, it is necessary to implement the leasing policystipulated by the State and the people’s government of the city where the houseis located. When leasing a house for production or commercial use the twoparties for the leasing shall determine the rental and other terms of leasethrough consultation.

Article 56 When theowner of a house rents out a house built on the State-owned land with the rightto use the land through allocation for a profit, the rental arising from theland shall be handed over to the State. The specific methods shall bestipulated by the State Council.

PART 5 INTERMEDIATESERVICE AGENCIES

Article 57 The realestate intermediate service agencies include real estate consultants, realestate evaluation agencies and real estate brokerages.

Article 58 A real estate intermediate serviceagency shall meet the following conditions:

(1) It has an owntitle and organization;

(2) It has a fixedbusiness site;

(3) It has thenecessary assets and funds;

(4) It has asufficient number of professionals; and

(5) It has otherconditions stipulated by the laws and administrative rules.

The establishment ofa real estate intermediate service agency shall apply to the administration forindustry and commerce for registration and a license before it goes intooperation.

Article 59 A real estate evaluation person shouldgo through an assessment by a qualification agency.

CHAPTER VREGISTRATION OF REAL ESTATE TITLE

Article 60 The Statepractices the registration and certificate issuances system for the right touse land and title to a housing property.

Article 61 In the case of the right to use landthat is obtained through lease or allocation, it is necessary to apply forregistration with the land administration department of the people’s governmentabove the county level, and through the verification of the department, thepeople’s government at the same level shall issue a land use certificate.

When a building isfinished on the land for real estate development with the land use rightobtained in accordance with the law, it is necessary to apply, by presentingthe land use certificate, with the real estate administration department of thepeople’s government above the county level for registration, and through aproper verification, the department should issue a real estate titlecertificate.

When a real estate istransferred or changed, an application should be made with the real estateadministration department of people’s government above the county level forregistration of the change and upon the modified title certificate, anapplication should be made with the land administration department of thepeople’s government at same level for a change to the right of land use. Aftera verification made by the land administration department of the people’sgovernment at the same level, the people’s government at the same level shallrenew or modify the land use certificate.

If there are otherstipulations by the law, the registration shall be handled in accordance withsuch stipulations.

Article 62 When areal estate is mortgaged, an application should be made with a departmentdesignated by the people’s government above the county level for registration.

When the right ofland use with the title of the building(s) thereon is obtained through a handlingof the mortgaged housing property, a registration of the transfer should bemade in accordance with the stipulations of this chapter.

Article 63 Withaffirmation of the provincial, autonomous regional or municipal people’sgovernments, a kind of title certificate in a unified form should be made anddisseminated in a unified way by a department designated by a people’sgovernment above the county level for unified administration of real estate andland in accordance with Article 61 of this law, separately record theverification and change of the building title and the use right of the land onwhich the building is located in the real estate certificate.

CHAPTER VI LEGALLIABILITIES

Article 64 In the case of an unauthorizedapproval for lease or lease out of the right to use a land for real estatedevelopment in violation of Article 11 and Article 12 of this law, the superiorauthorities or the relevant department shall impose administrative penalty onthe persons responsible.

Article 65 For aviolation of Article 30 of this law to engage in real estate developmentwithout authorization and license, the administration of industry and commerceof the people’s government above the county level shall order a stop of thedevelopment, confiscate the illegal income and may impose a fine on the conductthereof.

Article 66 For aviolation of Clause 1 of Article 39 of this law to transfer the right of landuse, the land administration department of the people’s government above thecounty level shall confiscate the illegal income and may impose a fine on theconduct thereof.

Article 67 For aviolation of Clause 1 of Article 40 of this law to transfer real estate, theland administration department of the people’s government above the countylevel shall order a payment of the lease fees of the right to use the land,confiscate the illegal income and may impose a fine on the conduct thereof.

Article 68 Forviolation of Clause 1 of Article 45 of this law to sell commodity houses inadvance, the real estate administration department of the people’s governmentabove the county level shall order a stop to the sales, confiscate the illegalincome and may impose a fine on the conduct thereof.

Article 69 For aviolation of Article 58 of this law to engage in real estate intermediateservice without authorization and license, the administration for industry andcommerce of the people’s government above the county level shall order a stopto the business of the real estate intermediate service, confiscate the illegalincome and may impose a fine on the conduct thereof.

Article 70 For a levyof fee from real estate development enterprises without legal basis, thesuperior department shall order a return of the fee that has been paid; whenthe case is serious, the superior department or the relevant department shallimpose an administrative penalty on the person(s) directly responsible.

Article 71 For anegligence of duty or abuse of power, a worker of the real estateadministration department or the land administration department shall beinvestigated and be affixed with criminal responsibility in accordance with thelaw if the case is serious enough to constitute a crime and subjected to anadministrative penalty if the case does not constitute a crime.

For taking theadvantage of power to extort other’s wealth or illegally accepting other’swealth to seek interest for other person(s), a worker of the real estateadministration department of the land administration department shall beinvestigated and be affixed with criminal responsibility in accordance withsupplementary provisions on punishment of graft and bribe crimes, if the caseis serious enough to constitute a crime and subjected to administrative penaltyif the case does not constitute a crime.

CHAPTER VIISUPPLEMENTARY PROVISIONS

Article 72 Those whoobtain the right to use the State-owned land for real estate developmentoutside the urban planning area, engage in real estate development andtransaction or carry out real estate administration shall go through or handlethe procedures with reference to this law.

Article 73 This law shall come into effect on January 1,1995.