Section 2

Allocation of the Land-use Right

Article 23 Allocation of the land-use right refers to acts that the people’s 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 24 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 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 Estate

Article 25 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 26 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 27 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 28 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 29 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 30 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 people’s government at or above the county level in the place where the registration authority is located.

Article 31 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 Estate

Section 1

General Stipulations

Article 32 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 33 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 34 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 35 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 people’s government at or above the county level and shall not make a concealed or false report.

Article 36 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.