FLIA Insight Invitation– Comparative Research Project: Legal Problems of Renewing the Term of the Right to Use Land for Construction of Dwellings

As a NGO that intends to promote global scholarly communication and education, The Foundation for Law and International Affairs (FLIA) is accountable to this vision and committed to offering reliable comparative research through the network that FLIA members build. FLIA shares the network with passionate members from all over the world and we are able to overcome the barriers of knowledge and language to make meaningful contributions. We initiate academic comparative research projects on various interesting and important topics, in which we gather and summarize information on the same topic across the globe. We publicize the research reports under the FLIA Insight program. We hope these reports will lead academic thought and discourse on the topics, and promote communication between scholars and practitioners from different jurisdictions.

FLIA invites you to join the Comparative Research Project: Legal Problems of Renewing the Term of the Right to Use Land for Construction of Dwellings.

Background

The right to use land for construction of dwellings is a relatively new legal term in China. Recently, the legal problem of renewing the term of the right to use land for construction of dwellings after it expires has become a major concern for the public.

There are two legal grounds governing this issue. One is the Property Law, which was adopted at the 5th session of the Tenth National People’s Congress on March 16, 2007 and promulgated for effect as of October 1, 2007. The other is the Interim Regulations of the People’s Republic of China Concerning the Assignment and Transfer of the Right to the Use of the State-owned Land in the Urban Areas, which is promulgated in accordance by Decree No. 55 of the State Council of the People’s Republic of China on May 19, 1990 and effective as of the date of promulgation.

In the Property Law of China, article 149 states that the term of the right to use land for construction of dwellings shall be automatically renewed upon expiration.

In Interim Regulations of the People’s Republic of China Concerning the Assignment and Transfer of the Right to the Use of the State-owned Land in the Urban Areas, Article 8 states: “The assignment of the right to the use of the land refers to the act of the State as the owner of the land who, within the term of a certain number of years, assigns the right to the use of the land to land users, who shall in turn pay fees for the assignment thereof to the State. An assignment contract shall be signed for assigning the right to the use of the land.”

Article 10 states: “The land administration departments under the people’s governments at the municipal and county levels shall, in conjunction with the administrative departments for urban planning and construction and the housing administration departments, draw up a plan concerning the size and location, the purposes, the term, and other conditions with respect to the assigning of the right to the use of the land. The plan shall be submitted for approval in accordance with the limits of authority for approval as stipulated by the State Council and shall then the implemented by the land administration departments.”

Article 12 states: “The maximum term with respect to the assigned right to the use of the land shall be determined respectively in the light of the purposes listed below: (1) 70 years for residential purposes; ……”

None of the articles mentions how to renew the term of the right to use land for construction of dwellings when it expires. This leads to a serious problem to today. The very first generation that was assigned the right to use the residential land has encountered the problem that the term of the right for 20 years is now expiring. As there is no law made by the Congress or regulation made by the central government explaining what to do with the expiration, the legal grounds to deal with this issues lie in local regulations. In the city of Wenzhou, the government decided that a homeowner has to pay hundreds of thousands or even millions to renew the assigned right to use the land. Meanwhile, in the city of Shenzhen, the government announced that homeowners can renew the right for 70 years for free.

Therefore, a huge debate is going on in China on what should be the legitimate and appropriate way to deal with this issue. This problem not only relates to vital interests of the people but also relates to how the legislators will solve the same problems with lands for industrial, commercial and other purposes. What more, it has serious implications for Chinese people and corporations, as well as foreign investors who must anticipate future costs.

Currently, there are two main opinions in China…

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