Law of the People’s Republic of China on
Administration of the Urban Real Estate
(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 he 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.