Laws of the People's Republic of China

CONTENTS

CHAPTER I GENERAL PRINCIPLES CHAPTER II LAND LEASING CHAPTER III SUBLEASING OF LAND-USE RIGHTS CHAPTER IV RENTING OF LAND-USE RIGHTS CHAPTER V MORTGAGE OF LAND-USE RIGHTS CHAPTER VI TERMINATION OF LAND-USE RIGHTS CHAPTER VII ALLOTMENT OF LAND-USE RIGHTS CHAPTER VIII SUPPLEMENTARY PROVISIONS

CHAPTER I GENERAL PRINCIPLES

   Article 1. These Procedures are formulated in accordance with the Provisional Regulations of the People's Republic of China on the Leasing and Subleasing of Urban State-owned Land under suitable consideration of the actual conditions of the city for the purpose of developing, utilizing and managing the State-owned land in a rational way and strengthening the administration of the land to further the construction and economic development of the city.

   Article 2. These Procedures apply to land owned by the whole people within the administrative areas of the city (hereinafter referred to as land), but excepting underground resources and treasure troves and public utility installations.

   Article 3. All corporations, enterprises and other organizations and individuals in and out of the People's Republic of China, except otherwise regulated by law, can acquire land-use rights and engage in land development, utilization and management according to stipulations of the present Procedures.

   Article 4. Land-use rights acquired by the land users in accordance with these Procedures can be subleased, rented out, mortgaged or used for other economic purposes within the term of the lease and the legitimate rights and interests of the users are protected by law.

   Article 5. The development, utilization and management of land by the lessees should be carried out in observance of State laws and regulations and relevant rules of this city and shall not be in any way in counter to public interests.

   Article 6. The city land administration bureau (hereinafter referred to as city land bureau) is in charge of leasing and termination of land-use rights, and management of the properties subleasing, renting out and mortgage. The city real estate administration bureau (hereinafter referred to as city estate bureau) is in charge of subleasing, renting out and mortgaging of landuse rights.

The land and estate offices of the districts and counties participate in various activities of land leasing and subleasing, and administer such activities in accordance with their functions and powers.

The city land bureau, and the district and county land administration offices exercise supervision and inspection of the leasing, subleasing, renting out, mortgaging and termination of land-use rights according to law and their respective responsibilities.

CHAPTER II LAND LEASING

   Article 7. Land leasing denotes a transference of land-use rights for a price and set term by the municipal people's government in the capacity of landowner to the users.

   Article 8. The city land bureau, in joint efforts of the city planning bureau, estate bureau and other offices in charge of construction, shall work out plans regarding the locations, areas, present uses and planned uses of the tracts of land for lease. The plans shall be reported to the city people's government for approval and carried out by the city land bureau.

   Article 9. A land lease shall be effected through the signing of a contract.

The contract shall be signed between the city land bureau and the lessee on the principle of equality, volunteering and non-gratuitousness.

   Article 10. The lease of a cultivated land of more than 1, 0 mu (15 mu to 1 hectare) or other land more than 2,000 mu is subject to approval by the State Council and that of a cultivated land of less than 1,000 mu or other land of less than 2,000 mu is subject to the approval by the city people's government.

   Article 11. The city land bureau should provide the prospective lessees with the following information:

1. Location, boundaries, area, present ground condition and infrastructures of the land;

2. Topographic map of the land;

3. City planning requirements of the land including uses, construction density, volume rate and headroom limits;

4. Requirements for environmental protection, greening of the environment, sanitation and disease prevention, communications, anti-seismic measures and fire prevention; 5. Term of the lease and form of leasing;

6. Standard forms of the lease contract;

7. Other rules and procedures for the land leasing.

   Article 12. The prospective lessee shall submit to the city land bureau the following papers for qualification examination:

1. Certificate of registered legal persons or identity papers;

2. Latest statement of assets and liabilities verified by the registered accountant and letter of credit standing issued by the financial institution that has routine business connection with the intending lessee;

3. Credentials of a legal representative or certificate of entrustment.

The aforesaid papers submitted by the prospective lessee from a foreign country (region) should be verified by a notary office of his country of residence and certified by the Chinese diplomatic (consular) mission in that country.

Prospective lessees from regions of Hong Kong, Macao and Taiwan can proceed with reference to above stipulations.

   Article 13. The longest terms of land lease are:

1. 70 years for land used for residences;

2. 50 years for land used for industries;

3. 50 years for land used for education, science and technology, culture, health and sports;

4. 40 years for land used for commerce, tourism and recreation;

5. 50 years for land used for comprehensive or other uses.

   Article 14. The leasing of land-use rights can be carried out through the following forms:

1. By agreement;

2. Public tender;

3. Auction.

   Article 15. Procedures for land leasing by agreement:

1. The prospective lessee shall submit an application for use of land to the city land bureau;

2. The city land bureau shall provide the prospective lessee with information and regulations concerning the land to be leased;

3. The prospective lessee shall submit to the city land bureau within a specified time documents on land development and construction projects as well as methods of payment of the lease price;

4. After reaching agreement through negotiation, the city land bureau and the lessee shall sign the lease contract and the lessee shall pay 20% of the lease price as earnest money to the city land bureau. Only after a full payment of the lease price by the lessee for the right to use the land and obtain the land-use certificate.

   Article 16. Procedures for land leasing through public tender:

1. The city land bureau shall make public announcement on or invitation for the tender;

2. The prospective bidder shall go to a designated place to buy the rules on use of land, directions for bidding, the bid document, the standard form of the contract for land use and other documents;

3. The city land bureau shall be responsible for explanation of questions related to tenders;

4. The bidder shall pay the bid bond (bearing no interest) and put his sealed bid document in the tender box before the deadline for putting in tenders;

5. The city land bureau shall invite relevant departments to form a tender appraisal committee which will be in charge of the opening, evaluation and awarding of the winners;

6. After an appraisal of the effective bid documents, the city land bureau shall issue to the bid winner a certificate on his winning the bid and refund to the unsuccessful bidders with their bid bonds;

Land administration offices have the right to reject all the bid documents if they do not meet the basic conditions for bidding;

7. The bid winner, upon presenting the certificate on his winning the bid, shall sign the land lease contract with the city land bureau within a set period of time and pay 20% of the lease price as earnest money (the bid bond can be calculated as part of the earnest money);

8. After a full payment of the lease price as stipulated in the contract, the bid winner shall go to the city land bureau to register for his land-use rights and get the land-use certificate.

   Article 17. Procedures for land leasing by auction:

1. The city land bureau shall make public announcement on land leasing by auction;

2. The city land bureau shall supply the bidders with the standard form of the land-use contract, rules on uses of the land and other relevant documents;

3. The city land bureau shall certify the qualifications of the bidders;

4. The city land bureau shall be responsible for explanation of questions related to the auction;

5. The city land bureau shall issue bidding placards to the bidders;

6. The city land bureau shall preside over the whole auction; the auctioneer shall strike the gong to accept the highest bid; the auctioneer shall have the right to terminate the auction activities upon finding the prices offered by the bidders are on the low side;

7. The city land bureau and the lessee shall sign the lease contract on the spot and the lessee shall pay 20% of the lease price as earnest money;

8. After a full payment of the lease price to the city land bureau as stipulated in the contract, the lessee shall go to land administration offices to register for his land-use rights and get the land-use certificate; if the lessee does not sign the lease contract with the lessor before the specified date, his right to the lease shall be withdrawn and his earnest money shall not be refunded.

   Article 18. The lessee shall pay up the lease price (the earnest money can be calculated as part of the lease price payment) within 60 days of signing the lease contract. The land user shall bear responsibility for the breach of contract upon failing to pay in full the lease price before the specified time, and the city land bureau shall have the right to rescind the contract in which case the earnest money shall not be refunded.

   Article 19. The city land bureau shall transfer the use-rights of the leased land according to stipulations of the contract. The city land bureau shall bear the responsibility for the breach of contract if it should fail to transfer the land-use rights as stipulated in the contract, and the land user shall have the right to rescind the contract and demand a refunding of double amount the earnest money.

   Article 20. The land user shall develop, utilize and manage the land in accordance with stipulations of the contract and requirements of city planning. If the user fails to do so as required, the city land bureau shall ask for correction and, if necessary, shall give out a warning or resort to a fine of 5-30% of the lease price, and in serious cases, up to a withdrawal of the land-use rights without compensation.

The city land bureau will withdraw the land-use rights from the land user without compensation should the latter fail to develop or utilize the land within two years of the coming into force of the contract.

   Article 21. If the lessee wishes to change in the uses of the land stipulated in the contract, he shall seek approval by the city land bureau and the city planning bureau, and if succeed, renew the lease contract in accordance with these Procedures,readjust the lease prices, and perform the formalities of registration again.

CHAPTER III SUBLEASING OF LAND-USE RIGHTS

   Article 22. Subleasing of land-use rights denotes an act of further transference of land-use rights by a leaseholder to a sublessee, including a sale, exchange or donation.

The leaseholder in this case is referred to as sublessor and the party receiving the sublease is referred to as sublessee.

   Article 23. A land sublease shall be effected by signing a contract.

   Article 24. The rights and obligations specified in the land lease contract and registration document are transferred with the sublease.

   Article 25. The actual term of a sublease shall equal to the original lease term minus the years in which the land having been used by the sublessor.

   Article 26. Subleasing of land shall not be made under following conditions: 1. No investment has been made in the development and utilization of the land within the stipulated period of time and according to conditions laid down in the contract;

2. The user of allotted land has not made up the procedures for the leasing of the land and the payment of lease price in accordance with these Procedures.

3. No certificates have been acquired according to law for the land-use rights and property rights to the buildings and other attached installations on the ground;

4. Land-use rights and property rights to buildings and other attached installations on the ground are uncertain or in dispute;

5. The city people's government deems it unsuitable for the land to be subleased.

   Article 27. Buildings and other attached installations on the ground are transferred with the sublease of the land or with the sublease of property rights of the buildings and other attached installations on the land, the use right of the land underneath shall also be transferred, except in sublease of chattels.

   Article 28. The owners of units in a building shall have a proportion of rights to the use of the land which can be subleased with a sublease of the units. But the right to the use of land occupied by the same building are indivisible.

   Article 29. When the value of the land increases at the time of its sublease, the sublessor shall pay added value of the land according to stipulations of the city people's government. The city estate bureau is in charge of collecting added value of lands.

   Article 30. Procedures for land subleasing are:

1. The sublessor shall apply, with the legal lease contract, the land-use certificate and certificates of property rights to the buildings and other attached installations on the ground or other relevant documents of certification, to the city estate bureau for the sublease which shall be examined and approved by the bureau in conjunction with the land administration and other relevant offices;

2. The city estate bureau, acting in conjunction with the city land, finance, price and other offices concerned, shall then make a land price appraisal;

3. The two parties to the sublease shall sign a contract on the sublease;

4. The two parties to the sublease shall, within 30 days of their signing the sublease contract, go to change the certificate of land-use at the city land bureau and the property rights certificate of the buildings and other attached installations at the estate bureau with the sublease contract.

The contracting parties can also entrust their proxies with legitimate letters of entrustment to complete the aforesaid procedures.

   Article 31. After a sublease of the land-use rights, a request for changes in the conditions and uses of land stipulated in the lease contract is to be handled according to regulations of Article 21 of these Procedures.

CHAPTER IV RENTING OF LAND-USE RIGHTS

   Article 32. Renting of land-use rights denotes the renting out of land-use right with the buildings and other attached installations on the ground by the owner to a tenant to collect a certain amount of rental.

The use-rights to the land shall not be rented out in case no investment has been made in the development and utilization of the land before a set time limit or in accordance with stipulations of the lease contract.

   Article 33. The renter and the tenant should sign a rental contract on the renting of land-use rights, which shall not contravene State laws and regulations and the land lease contract.

After a renting out of the land-use rights, the renter shall continue to carry out the lease contract.

   Article 34. The renter shall register for the renting out of land-use rights and the buildings and other attached installations on the ground according to rules.

CHAPTER V MORTGAGE OF LAND-USE RIGHTS

   Article 35. Land-use rights acquired through land leasing or subleasing can be mortgaged.

   Article 36. The buildings and other attached installations on the ground are mortgaged with a mortgage of the use-rights to the land they are on.

The use-rights to that part of the land used by buildings and other attached installations on the ground is mortgaged with a mortgage of the buildings and installations.

   Article 37. The mortgagor and the mortgagee shall sign a mortgage contract, which shall not contravene State laws and regulations and the land lease contract.

   Article 38. The mortgage of land-use rights and buildings and other attached installations on the ground shall be registered according to regulations.

   Article 39. In case of the mortgagor failing to clear his debts due or declaring a dissolution or bankruptcy during the contract term, the mortgagee shall have the right to dispose of the mortgaged property. Article 40. The mortgagee shall have first priority in getting compensation from the proceeds of a disposal of the mortgaged property.

   Article 41. Upon the termination of a mortgage due to debt clearance or for other reasons, the mortgage registration shall be cancelled according to regulations.

CHAPTER VI TERMINATION OF LAND-USE RIGHTS

   Article 42. Land-use rights shall terminate with the expiry of the term for the use of the land as stipulated in the lease contract, or as a result of their withdrawal before the expiry of their term or extermination of the land.

   Article 43. At the expiry of land-use rights, the land-use rights and property rights to the buildings and other attached installations on the ground shall be acquired by the city people's government without compensation. The land user shall return the land-use certificate and other related documents and cancel the lease registration according to regulations.

The lessee shall dismantle and move out the technical equipment and non-general use buildings in the time limit as stipulated in the lease contract which requires their dismantling and moving out, or pay the expenses for their dismantling and moving out.

   Article 44. The land user can apply for an extension of the lease term upon its expiry. The application shall be made to the city land bureau six months before the expiry. A new contract shall be signed in accordance with stipulations of Chapter Two of these Procedures. The land price shall be paid and registration completed accordingly.

   Article 45. The city people's government shall not withdraw the land-use right of the land user before the expiry of the lease term. In special circumstances and acting in the interest of public welfare, the city government can withdraw the land-use rights before the expiry of their lease through legal procedure and make due compensations with consideration of the period of the use of the land and the actual development and utilization of the land. The city land bureau shall inform the land user and make a public notice six months before the withdrawal of the land-use right on the reasons of the withdrawal, the location of the land affected and the date of the withdrawal. The city land bureau shall be in charge of the withdrawal of the land-use rights and the property rights of the buildings and other attached installations on the ground.

   Article 46. The amount of compensation for a withdrawal before the expiry of the set term of the land-use rights to the land user shall be assessed by the city land bureau together with the city estate bureau and city finance bureau and determined with the land user through negotiation. In case of a dispute over the negotiation, either party can bring that before the court. But a dispute over the amount of compensation shall not affect the early withdrawal of the land-use rights.

   Article 47. With a negotiated agreement with the land user, an early withdrawal of land-use rights can be effected through giving the land user the land-use rights of another tract of land for exchange. The negotiated amount of compensation and the lease price shall offset each other during the exchange.

The city land bureau and the land user shall sign a new land lease contract for the exchange of land-use rights, and the land user shall perform the formalities for registration and change of land-use certificates.

   Article 48. With an extermination of land and cessation of land-use rights, the land user's rights and obligations thereon come to an end. Cancellation of the registration should be made according to regulations.

CHAPTER VII ALLOTMENT OF LAND-USE RIGHTS

   Article 49. The allotment of land-use rights denotes an acquisition by the land users of land-use rights through various forms free of charge according to law.

   Article 50. Allotted land shall not be subleased, rented out or mortgaged except when the land user meets the requirements stipulated in Article 1.

In the case of arbitrary subleasing, renting and mortgaging of allotted land, the land users shall be subject to punishment of confiscation of the illegal proceeds from the act and withdrawal of the rights to use the land by the city land bureau and to a fine of less than 50% of the illegal proceeds or the value of the mortgage according to the actual circumstances of the case.

   Article 51. Under the following conditions and with approval form the city land and estate bureaus, a land user can sublease, rent or mortgage his allotted land and property rights to the buildings and other attached installations on the ground:

1. The land user is a corporation, enterprise or some other economic organization or an individual;

2. The land user possesses the certificate for the use of Stateowned land;

3. The land user possesses legal title deeds for the buildings and other attached installations on the ground;

4. The land user signs a land lease contract and pays up the lease price to the city land bureau according to stipulations of Chapter Two of these Procedures, or uses his proceeds from the sublease, rent or mortgage to offset the lease price.

The authorized subleasing, renting or mortgaging of land acquired in accordance with the preceding paragraph shall be effected according to respective stipulations of Chapters Three, Four and Five of these Procedures.

   Article 52. In the case when an user of allotted land ceases his use of the land owing to a removal, dissolution, cancellation, bankruptcy or other reasons, the city people's government shall withdraw his right to use the land without compensation, and the land can be leased out in accordance with these Procedures.

Acting on the needs of city construction and development and city planning, the city people's government can withdraw the use-right to an allotted land without compensation and the land can be leased out in accordance with these Procedures.

In the withdrawal of the use-right to an allotted land without compensation, the city people's government shall make appropriate compensations for the take-over of the buildings and other attached installations on the ground with consideration of the actual situation.

CHAPTER VIII SUPPLEMENTARY PROVISIONS

   Article 53. The land-use rights acquired by individuals in accordance with these Procedures can be inherited.

The inheritor shall go to the city land bureau to register for a change of the title with the certificate of his right of inheritance.

   Article 54. The land user is obliged to pay taxes according to the tax law.

   Article 55. The Tianjin City Urban and Rural Construction Commission is responsible for explanations of these Procedures.

   Article 56. These Procedures will come into force as of the date of promulgation.