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Regulations of Shenzhen Special Economic Zone on Administration of Real estate Industry

Regulations of Shenzhen Special Economic Zone on Administration of Real estate Industry

Chapter I General Provisions

Article 1 In order to strengthen the administration on the real estate industry of Shenzhen Special Economic Zone (hereinafter referred to as the "Special Zone" ), standardize the acts of development and agency organization of real estate industry, and maintain the market order of real estate, these regulations are hereby formulated in accordance with the basic principles of laws and administrative rules and in light of specific conditions of the Special Zone.

Article 2 To engage in development and agency of real estate in the Special Zone, any one shall abide by these regulations.

Article 3 In these regulations, development of real estate referred to those acts such as establishing basic facilities and houses on the lands whose land-use right are legally acquired.

In these regulations, services of agency of real estate include consultation, brokering, evaluation and other agency services of real estate.

In these regulations, consultation of real estate referred to onerous acts that a consultant providing information, consultation, planning, researching feasibility for development and transfer of real estate.

In these regulations, brokering of real estate referred to onerous acts that a broker offering services for both parties of transfer in real estate for the purpose of helping to bring about the transaction.

In these regulations, evaluation of real estate referred to onerous acts that a professional accepting consignment to evaluate institution evaluating the price of a real estate.

Article 4 Any enterprise of real estate development and agency of real estate service, whose lawful rights and interest shall be protected by law, shall operate according to the law.

Article 5 Any enterprise of real estate development shall abide the principle of harmonization of economic benefit, social benefit and environmental benefit to undertake the development business.

An agency of real estate service shall abide the principles of voluntariness, equality, being honest and trustworthy and mutual and equitable benefit to undertake agency service.

Article 6 The Real Estate Administrative Department of Shenzhen Municipal People' s Government, who is the authority in charge of real estate industry (hereinafter referred to as the "Administrative Department" ), shall implement direction, supervision and administration over the real estate industry according to the law.

The Real Estate Association of Shenzhen Municipality (hereinafter referred to as the "Real Estate Association" ), who is the self-disciplined organization of the real estate industry, shall perform its function according to these regulations.

Chapter II An Enterprise of Real Estate Development

Article 7 In these regulations, an enterprise of real estate development shall be referred to a business entity who engages in the development of real estate and operations as its mail business or supplementary business.

Article 8 To establish an enterprise of development of real estate shall meet the following requirements:

(1)   The registered capital of the enterprise shall be no less than RMB 10,000,000;

(2)   There are more than four full time technical personnel of real estate and architecture project, and more than two full time accountants, who have the specialty licenses.

(3)   Having the land-use right which acquired with market price;

(4)   Having its own name, institutional framework and fixed place of business; and

(5)   Other requirements as specified by the laws, regulations.

In the case of adding the business of development of real estate to its original business scope, the enterprise shall meet the requirements specified by Item (1),(2),(3)and(5) of the preceding paragraph.

The Industrial and Commercial Administrative Department shall approve those enterprises who meet the requirements specified by these regulations to handle registration procedure, while the department shall refuse to register those fails to meet these requirements.

Article 9 An enterprise of real estate development, shall go to the Administrative Department for record within 30 days upon acquiring the business license, and concurrently apply for License for Enterprises of Real Estate Development, which shall be authorized and issued by the Administrative Department according to the provisions of the laws and regulations within 15 days

Where an enterprise of development of real estate carries out the development and operation, it shall present the License for Enterprises of Real Estate Development.

Article 10 The License for Enterprises of Real Estate Development shall be subject to annual examination and approval system by the Administrative Department.

Article 11 An enterprise of real estate development shall not sell or sell in disguise form through leasing, offering for subordinating and lending the developing and operating right.

Article 12 An enterprise of real estate development shall submit report forms of developing and operating real estate to the Administrative Department on schedule.

Article 13 Where an enterprise of real estate development sell real estate, it shall apply for a License for Preselling Real Estate in the case of preselling, or apply for a License for Exporting of Commercial Housing in the case of selling abroad.

The Administrative Department shall make a decision on approval or disapproval of issuing a License for Preselling Real Estate or a License for Exporting of Commercial Housing within 30 days upon receiving such an application. In the case of approval, the license shall be issued concurrently.

Article 14 Where an enterprise of real estate development or an unit entrusted by it publish advertisement on selling real estate, it shall submit the duplications of the following materials and concurrently present the original documents to an unit which undertakes business of advertising and publishing:

(1)    the business license;

(2)    the License for Enterprises of Real Estate Development; and

(3)    the License for Preselling Real Estate in the case of preselling, or the Certification of Real Estate in the case of actual selling, or the License for Exporting of Commercial Housing in the case of selling abroad.

Where an enterprise fails to provide the material specified in the preceding paragraph, an unit which undertakes business of advertising and publishing shall not make or release the real estate advertisement for it.

Article 15 The contents of the advertisement of selling of real estate of an enterprise of real estate development shall include:

(1)    the location of the building, the time of completion and the selling price;

(2)    the numbers of the License for Enterprises of Real Estate Development and the License for Preselling Real Estate in the case of preselling; also the number of the License for Exporting of Commercial Housing in the case of selling abroad; and

(3)    the numbers of the License for Enterprises of Real Estate Development and the Certification of Real Estate; also the number of the License for Exporting of Commercial Housing in the case of selling abroad.

A unit which undertakes business of advertising and publishing shall not publish an advertisement which does not meet the requirements specified in the preceding paragraph.

Article 16 An enterprise of real estate development shall not trade in the real estate which prohibited by the laws, regulations and rules to transfer.

Article 17 Where an enterprise of real estate development offers a land to cooperate with others to build a house, it shall use the land-use right acquired by market-oriented price as the basis of cooperation; where such enterprise cooperates with others to build a house as a subscriber, it shall provide credit certificate, while its own capital shall be no less than 25% of gross budgetary investment of the cooperative project.

Where the land-use right, which obtained through being abated of or exempted of payable price of the land, or through administrative allocation, is used as the basis of cooperation to build a house, the enterprise shall meet the requirements specified in the preceding paragraph and report it to the Administrative Department for approval.

Article 18 Without authorization ,an enterprise of real estate development shall be prohibited to change the name of the transferee of an effective contract of sale of real estate.

Article 19 An enterprise of real estate development shall build civicism and commonweal fitting establishment and project according to an contract of assignment of  land-use right and deliver them on schedule.

Chapter III Brokers and Assessors of Real Estate

Article 20 In these regulations, a broker of real estate is referred to a professional who, after having obtained a certification for broker of real estate and taken out a practicing license, engages in real estate management. Where assessors of real estate referred to in these regulations shall include valuers and assessors. A assessor as referred to in these regulations is a professional who, after having obtained a certification for broker of real estate and taken out a practicing license, engages in assessing real estate.

Article 21 Anyone who meets the following requirements may apply to the municipal real estate association for training and take a uniform examination:

(1)    having full civil capacity;

(2)    having an educational degree of above junior college;

(3)    having more than 3 years occupational experiences in real estate industry; and

(4)    having the permanent residence or blue-stamp residence of Shenzhen Municipality.

The Administrative Department shall issue the certification for broker of real estate of Shenzhen Municipality or certification for assessor of real estate of Shenzhen Municipality for those who having passed the exam.

Article 22 Anyone who has acquired a certification for valuer of real estate issued by relevant state authority or having certification for broker and assessor of real estate of the municipality, in case he desires to practice in the Special Zone, he shall apply to the Administrative Department for registration and take out the practicing license for broker of real estate of Shenzhen Municipality or practicing license for assessor of real estate of Shenzhen Municipality.

Article 23 An applicant of registration shall submit the following materials to the Administrative Department:

(1)    an application;

(2)    the duplications of the certification for valuer, broker or assessor of real estate with the original documents presenting concurrently; and

(3)    document of appointment, employment contract or employment remove certificate of the agency of real estate in which the applicant practiced.

Article 24 The Administrative Department shall make the decision on approval or disapproval of the application and inform the applicant in writing within 30 days upon receiving the application. The Administrative Department shall issue the practicing license for broker of real estate of Shenzhen Municipality or practicing license for assessor of real estate of Shenzhen Municipality to the applicant being approved; the applicant, who being disapproved, may apply for administrative review within 15 days upon receiving the decision in case he objects to such decision.

Article 25 Where an applicant falls into one of the following circumstances, the Administrative Department shall disapprove such registration or revoke such registration registered:

(1)    being without civil capacity or with qualified civil capacity;

(2)    being an in-service government employee of state authority;

(3)    providing false assessment report or committing the illegal acts such as taking a bribe during his practicing;

(4)    providing false application materials; and

(5)    violating provisions of these regulations being punished by revoking the practicing license for broker or assessor of real estate of Shenzhen Municipality.

Where the party being revoked of registration has some objections, he may apply for administrative review according to the law within 15 days upon receiving the notice on revoking of registration.

Article 26 Anyone, who has acquired a practicing license for broker or assessor of real estate, can only practice in one real estate agency in contemporaneity.

Article 27 The Administrative Department shall carry out the annual examination system in the examination of practicing license of broker or assessor of real estate of Shenzhen Municipality. Only the one who has passed the annual examination can continue his practice.

Chapter IV The Real Estate Service Agency

Article 28 The forms of organization of real estate agencies shall include individual, partnership and legal person.

Where an individual establishes a real estate agency, he shall bear unlimited joint and several liabilities for debts of the agency. While the partners of a partnership real estate agency shall bear unlimited joint and several liabilities for debts of the agency.

A real estate agency with juristic personality shall bear liabilities for debts of the agency with all of its assets.

Article 29 An individual shall meet the following requirements to establish an individual real estate agency:

(1)    The registered capital shall be no less than RMB 300,000;

(2)    There are more than three full-time practicing personnel (including the initiator) who have practicing licenses for brokers of real estate;

(3)    There is a fixed place for providing services; and

(4)    Other requirements as specified by the laws and regulations.

Article 30  Anyone shall meet the following requirements to establish an institution of real estate consultation in partnership or with legal person qualification or to add real estate consultation business into its business scope:

(1)    The registered capital shall be no less than RMB 1,000,000;

(2)    There are no less than two personnel (including the initiator) who have the practicing licenses for brokers of real estate, no less than two personnel who have the practicing licenses for assessor of real estate and no less than four personnel of other specialty such as economics, engineering, law and financing;

(3)    Having its own name and a fixed place for practicing; and

(4)    Other requirements as specified by laws and regulations.

Article 31 Anyone shall meet the following requirements to establish a agency or assessment institution of real estate in partnership or with the legal person qualification or to add the broker or assessment business into its business scope:

(1)    The registered capital shall be no less than RMB 1,000,000;

(2)    There are more than three personnel (including the initiator) who have the practicing license for broker of real estate in the case of establishing an agency of real estate; or more than three personnel who have the practicing license for assessor of real estate in the case of establishing an assessment institution of real estate;

(3)    Having its own name and a fixed place for practicing; and

(4)    Other requirements as specified by the laws and regulations.

Article 32 The Administrative Department may, according to the amount of professionals, registered capital and time of registration, rate the assessments institution of real estate and award the Graded Qualification Certificate for Assessments Institution of Real Estate annually.

Article 33 Anyone shall apply to the industrial and commercial authority and submit relevant testifying materials specified by these regulations for the establishment of an agency of real estate or adding the broker business to its business scope.

Article 34 Once application of for establishing intermediary service institution of real estate or enlarging business scope of intermediary service of real estate to the Department of Industrial and Commercial Management is examined to be in line with this rule, it will be registered and issued business license. Otherwise, it will not be registered.

Article 35 Following materials should be submitted to the administrative department in charge within 30 days by the real estate intermediary service institution from the date when they take out the license.

1.       Registration of Record for Real Estate Intermediary Service Institution

2.       Copy of Business License

3.       Real estate broker' s Certificate to practice, copy of assessors' certificate to practice and certificated materials of other professional staff.

Article 36 The business of real estate intermediary service institution will be stopped by the Department of Industrial and commercial Management and be required to reach the required establishing conditions within 90 days for the changes of the employed or other changes not reaching the required conditions after its establishment.

Article 37 When the real estate advisory institution carries out its business and both parties think it necessary to sign an written contract, the written contract should be signed.
Following contents should be contained in the advisory contract:

1. Full names or designation of both parties and full names of legal representatives

2. Advisory matters, time limit and requirements,

3. Amount for advice, method of payment and date,

4. Responsibility for breach of contract

5. Other matters that parties think necessary to be recorded

Article 38 The standard for real estate consultation reward shall be decided by the two parties.

Article 39 Real estate brokering institution can offer procuratorial services except offering brokering service to conveyance of real estate, leasing parties.

The brokering and procuratorial services of conveyance and lease of real estate, and so on that offered to the consignors for the purpose of profits could only be done by the real estate brokering institutions.

Article 40 Written contracts should be signed by the real estate brokering institutions which offer the brokering and procuratorial services.

Following contents should be contained in the brokering or procuratorial contracts:

1.       Full names or designations of both parties and full names of the legal representatives

2.       Brokering and procuratorial matters, time limit and requirements

3.       Amount of brokerage commission or procuracy, method of payment and date

4.       Responsibility for breach of contract

5.       Other matters that parties think necessary to be recorded

Article 41 Any real estate brokerage institution will not collect or will reduce the recompense if the real estate brokering and procuratorial contract can not be performed or can not be performed fully except it is caused by the consignor.

Real estate brokerage institution should pay for the consignor' s economic losses which are caused by the institution.

Article 42 Any real estate brokerage institution which offers the brokering and procuratorial services has right to acquire relative materials for consignor and the consignor should provide overall true relative materials to the institution. The institution has right to reject to serve the consignor if he provides fault inconsistent materials or hold the truth back.

Article 43 Any real estate which offers brokerage service has right to go halves with dealers in commission except it is stipulated.

Article 44 Any real estate brokerage institution which offers services should provide overall true materials and messages concerning the establishment of the contract to dealers and shall not provide the fault inconsistent materials or hold back the truth of deals.

Article 45 Any real estate brokerage institution shall not go into trading or leasing relationship with either negotiators on real estate concerning the same brokering business.

Article 46 Any real estate brokerage institution shall not be broker and procurator synchronously on the same business.

Article 47 Any real estate brokerage institution shall not carry out the prohibited real estate business that is stipulated in laws, regulations and rules.

Article 48 Any real estate business contract managed through brokerage shall have stamps of the brokerage institution and signatures of holders of Certificate to Practice of Shenzhen Real Estate Broker.

Article 49 Any real estate sale advertisement released by the real estate brokerage institution shall be in line with Article14 and Article 15 and have the name and address of the institution. The institution which release leasing advertisements shall have the Leasing License of real estate and have the license number shown in the advertisements.

Any advertisement with no indication of the name and address of the real estate brokerage institution shall be released by the advertising operator or the releasing unit.
Article 50 Assessment of following real estates can be perform according to this regulation:

1.       Trades and exchanges of property right;

2.       inheritance, division, coalition, donation and other forms of transferring property;

3.       performing lease, affiliated operation, operation by buying a share or performing alternations of stock system;

4.       mortgage, entering insurance;

5.       Performing annexation and liquidation;

6.       Making up compensation or amends to parties suffering from relocation due to pull-down of original homes

7.       Other real estates needing assessment.

Article 51 Any real estate assessing institution offering assessing service should execute a contract of proxy assessment.

Following contents should be contained in the contract of proxy assessment:

1.       Full names or designations, addresses of parties and names of the legal representatives

2.       Names of the assessing subject matter, address, proportion, location, structure, quality, function, fitment, environment, use condition;

3.       Matters of assessment, time limit and requirement;

4.       Amount of assessment earnings, method of payment and date;

5.       Responsibility for breach of contract;

6.       Other matters that parties think necessary to be recorded.

Article 52 Any real estate assessing institution which offers assessing service has right to acquire relative materials from consignor and consignor should provide overall true relative materials to the institution.

Article 53 Any real estate assessing institution has right to acquire assessing earnings.

The standard of assessing earnings shall be made by joint cooperation of department in charge and organization for prices.

The assessing earnings shall not be over or under the prescriptive standard.

Article 54 Any real estate assessing organization must provide real estate assessing report to the consignor after the assessment has been done according to the stipulations in the contract.

Following contents should be contained in the real estate assessing report:

1.                    Name of the real estate, address, proportion, location, structure, quality, function, fitment, environment, use condition;

2.                    Warranty and method of assessment;

3.                    Result of assessment;

4.                    Other matters needing explanation.

Relative drawings, photos, background materials, primordial materials and data of field reconnaissance used as Warranty in the process of assessment should also be contained in the real estate assessing report.

Article 55 Stamp of assessing organization and signatures of certified assessing stuff and the legal representative or person in charge shall be presented in the real estate assessing report.

Article 56 Any real estate assessing organization is responsible to the reality, correctness and validity of its real estate assessing report.

Article 57 The assessing report used as warranties of collecting relative real estate tax and confirming amount of compensation for losses or amends made up to the real estate by the government, shall be examined by the municipal real property institution and permitted by the department in charge or department of taxes.

Article 58 Any real estate intermediary service organization and its stuff shall well kept the materials and articles provided by the consignor and present a copy of the list.

   Any real estate intermediary service organization and its stuff shall guard secrets for consignor according to the law.

Chapter V The Association of Real Estate

Article 59  Association of municipal real estates is self-disciplined corporation of the real estate industry registered according to the law. Its main responsibilities are as follow:

1.     Establishing standards of actions and ethics for the industry;

2.     Organizing training and tests for the real estate industry stuff;

3.     Accepting and hearing the complaints of the members, organizing investments and providing management advices to the relative departments;

4.     Reporting the opinions and requests of the industry to the department in charge, vindicate the legal rights and interests of the industry;

5.     Interceding the inner disputes of the industry;

6.     Organizing communications of business;

7.     Transacting other matters consigned by the department in charge.

Article 60 Enterprise of real estate development and the real estate intermediary service organization established according to the law shall apply to join the association of municipal real estate and become a member of it.

Article 61 Member of the association and the individual member shall abide by the constitutions of the association and pay for the tax according to the stipulations.

Article 62 General assembly of the association of the municipal real estate is the organization of supreme power, and the council is the enforcement body of the general assembly. The authorities of the general assembly and council are stipulated in the constitutions.

Article 63 The council is made up of directors consigned by the department in charge and the directors elected by the association. The directors consigned by the department shall not surpass one third of the total directors. The total number of directors is stipulated in the constitutions.

Chapter VI Legal Liabilities

Article 64 The department in charge will order to rectify and sequestrate the illegal earnings if the organization presumes five to develop and manage real estates without the License for Enterprises of Real Estate Development.

 The institution whose Certificate of Real Estate Development is revoked by the department in charge continues to develop and manage real estate will suffer not only a punishment made according to the previous stipulation but also a penalty of over fifty thousand RMB and a hundred thousand RMB.

Article 65 The License for Enterprises of Real Estate Development will be revoked by the department in charge if the enterprise of real estate development has not been engaging in business for two consecutive years.

Article 66 The enterprise will be suffer a order to rectify and a penalty of over ten thousand RMB and below twenty thousand RMB if it disobeys Article 10 of this ordinance and does not attend the yearly examination. The enterprise will suffer a punishment of degrading one level from the department in charge if it does not attend the yearly examination in the period of order to rectify. The License for Enterprises of Real Estate Development will be revoked by the department in charge if the enterprise has not attended the yearly examination for two consecutive years.

Article 67 The enterprise of real estate development will suffer a penalty of twenty thousand RMB below a hundred thousand RMB and its illegal earnings of will be sequestrated by the department if it disobeys Article 11, Article 16, Article 17 and Article 18 of this ordinance. Its License for Enterprises of Real Estate of Development will be revoked by the department in charge if its scenario is serious.

Article 68 The enterprise will suffer a order to stop releasing advertisements, a punishment of sequestrating its illegal earnings and a penalty of over one time and twice below of its illegal earnings if it disobeys the stipulations of Item 2 of Article 14 and Item 2 of Article 15.

Article 69 The enterprise will suffer a order to stop pre-sell, present-sell and to amend with a time limit, and a penalty of over twenty thousand and below fifty thousand RMB if it disobeys the stipulation of Item 1 of Article 15. The License for Enterprises of Real Estate of Development will be revoked if its scenario is serious.

Article 70 The enterprise will suffer a order to make available for use with a time limit and a penalty of over five percents and below ten percents of the total amount of the city planning accessorial facilities and the total amount of the investment of the commonweal accessorial programs. The License for Enterprises of Real Estate of Development will be revoked by the department in charge if it does not make available use in the charged period.

Article 71 The enterprise will suffer a order to stop its business, a sequestration of its illegal earnings and a penalty of over ten thousand RMB and below fifty thousand RMB, if it has not attain the relative real estate intermediary service operating right but has presumed to engage in the business of real estate in consultation, brokering, assessment and substitution and holds no relative certificate to practice and engage in the intermediary service activities under the title of real estate broker and assessing stuff.

Article 72 The certificate to practice will be revoked by the department in charge if the enterprise which has disobeyed the stipulations of Article 26 and Article 27 and has been ordered to amended rejects to amend.

Article 73 The Business Certificate will detained for a short duration by the industrial and commercial department if the real estate intermediary service organization has disobeyed the stipulation of Article 36 of this ordinance can not reach the required establishing conditions in the prescriptive time limit. When it is examined to have reached the required conditions, the certificate will be given back.

Article 74 The enterprise' s illegal earnings will be sequestrated by the department in charge if it disobeys the stipulations of Item 3 of Article 43 and Item 3 of Article 53. It will receive a penalty of over one time and below twice of its illegal earnings from the department in charge if its scenario is serious.

Article 75 The brokerage organization shall pay for the economic losses of the parties caused by its disobeying of the stipulation of Article 44. The certificate to practice of the stuff who are responsible to the serious scenario will be revoked by the department in charge.

Article 76 The enterprise will receive a sequestration of its illegal earnings by the department in charge and a penalty of over twenty thousand RMB and below fifty thousand RMB. The certificates to practice of the direct responsible stuff to the serious scenario will be revoked by the department in charge.

Article 77 The illegal earnings of the brokerage organization will be sequestrated by the department in charge and the organization shall compensate consignor' s economic loss caused by its disobeying stipulation of Article 46 of this ordinance. The certificates to practice of the direct responsible stuff to the serious scenario will be revoked by the department in charge.

Article 78 The organization will receive a sequestration of its illegal earnings and a penalty of over one time and below twice of its illegal earnings if it disobeys the stipulation of Article 47 of this ordinance. The business license will be temporarily detained by the industrial and commercial department and a order to rectify will be released if its scenario is serious. When it is examined to have reached the amended requirements, the license will be given back. The certificates to practice of the direct responsible stuff will be revoked by the department in charge.

Article 79 The organization will receive a order to stop advertising from the industrial and commercial department, a sequestration of its illegal earnings and a penalty of over one time and below twice of its illegal earnings if it disobeys the stipulation of Article 49 of this ordinance.

Article 80 The assessing organization shall be responsible to the relative consignor' s economic loss caused by its disobeying stipulation of Article 56 of this ordinance. The organization will receive a penalty of over fifty thousand RMB and below a hundred thousand RMB from the department in charge. The certificates to practice of the direct responsible stuff to the serious scenario will be revoked by the department in charge.

Article 81 The intermediary service organization shall be responsible to the consignor' s economic loss caused by its disobeying stipulation of Article 58 of this ordinance. The certificates to practice of the direct responsible stuff to the serious scenario will be revoked by the department in charge.

Article 82 The parties who are disaffected to the administrative punishment can apply to the agency of administrative review of Shenzhen government for reconsideration or bring litigation to the people' s court within fifteen days dating from the date of receiving the decision of punishment.

Article 83 In case the department in charge and its employees are remiss their duties, abuse their duties, or make irregularities for favoritism, they shall be given administrative sanction by the department in charge or its superior department. If it constitutes a crime, they shall be prosecuted for criminal liabilities.

Chapter VII Supplementary Provisions

Article 84 Specific implementing rules are to be formulated by Shenzhen Municipal People' s Government in accordance with these regulations.

Article 85 Any enterprise of real estate development which established before the implementation of these regulations, shall apply to the Industrial and Commercial Authority for re-registration within 1 year from the date of the implementation of these regulations.

Any agency of real estate service which established before the implementation of these regulations, shall apply to the Industrial and Commercial Authority for re-registration within 6 months from the date of the implementation of these regulations.

Article 86 These regulations shall take effect as of March 1, 1996.


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