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Interim Procedures of Shanghai Municipality on the Lease of State-owned land
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| (Promulgated by People' s Government of Shanghai Municipality on May 31,1999) Chapter I General Provisions Article 1 Purpose and Basis In order to promote the optimal disposal and rational utilization of land resources and perfect the system of compensated land use, these Procedures are formulated in accordance with the Regulations of the People' s Republic of China on the Implementation of the Law of the Land Administration and other provisions of the State concerning the compensated use of land and in light of the actual conditions of this Municipality. Article 2 Scope of Application These Procedures are applicable to the lease of state-owned land within the administrative areas of this Municipality. Article 3 Definition The lease of state-owned land as mentioned in these Procedures refers to the lease of state-owned land by the municipal and county governments and the administrative committee of the Pudong New Area, within the limits of authority for approving the use of land for construction, for a certain number of years to land users for rent to be paid by the land user as lessee. Article 4 Administrative Department The Land and Housing Administration of Shanghai Municipality (hereinafter referred to as the Municipal Land and Housing Administration) is responsible for the administration of the lease of state-owned land. Chapter II Scope, Conditions and Procedures of the Lease of State-owned Land Article 5 Scope of Lease With the exception of commodity housing projects where the right to use of state-owned land shall be acquired by transfer, the right to use of state-owned land in all other projects may be acquired by lease in accordance with the provisions of these Procedures. Article 6 Potential Lessees Unless otherwise prescribed by laws or regulations, the natural persons, legal persons and other organizations both within and outside the borders of this country may acquire the right to use of state-owned land by lease in accordance with the provisions of these Procedures. Article 7 Planning Requirements on Land Lease Lease of state-owned land shall comply with the requirements of the overall plan of this Municipality for land use, city planning, the annual plan for land use and the technical provisions of city planning and management. Article 8 Mode of Lease Lease of state-owned land may take the modes of agreement, bid invitation, auction, etc. When leasing state-owned land by agreement, the land user shall, in accordance with relevant provisions of this Municipality, complete relevant procedures, such as applying for approval of his/her construction project, planning permit for use of land for construction, and approval of use of land for construction. When leasing state-owned land by bid invitation or auction, the land user shall complete similar procedures required in the transfer of land use rights. Article 9 Signing of Lease Contract A lease contract shall be signed for lease of state-owned land. The lease contract shall be signed between the Municipal Land and Housing Administration, the land administrative department of Pudong New Area or county land management department hereinafter referred to generically as the lesser and the lessee. Article 10 Contents of the Lease Contract The lease contract shall include the following main contents: 1. The parties to the lease; 2. The location of the lot to be leased, its boundaries and area; 3. The nature of planned use for the lot to be leased and the planned technical parameters: 4. The duration of the lease; 5. The amount of the rent, the time for payment and the mode of payment; 6. The rights and obligations of the parties to the lease; 7. The way of disposal of the original buildings, structures and other fixtures on the lot to be leased and the cost for the disposal; 8. The part of responsibilities and the costs for the municipal construction of complete system of facilities to be born by the lot to be leased; 9. Time of delivery of the lot to be leased; 10. Time of starting and completing the construction project; 11. The way of disposal of the buildings, structures and other fixtures on the leased lot on termination of the contract; 12. Liabilities for breach of contract; 13. Modes of settling disputes; and 14. Other matters agreed on by the parties. The lease contract shall take the standard form, which shall be formulated by the Municipal Land and Housing Administration. Article 11 Duration of Lease The duration of the lease of state-owned land shall be agreed on by the parties to the lease, but shall not exceed the following maximum: 1. 50 years for land for industrial use; 2. 50 years for land for educational, science and technological, cultural, public health , or sports use; 3. 30 years for land for commercial, tourist or entertainment use; or 4. 50 years for land for other uses. The number of years for lease of state-owned land by enterprise legal persons shall not exceed that allowed for business by their business license. Article 12 Rate of Rent The rent for land lease may be set by agreement, bid invitation or auction, but it shall not be lower than the minimum standard. In any of the following cases, the minimum rent of a leased lot shall be the discount of the marked price for the lot: 1. The land is used for commerce, tourism, entertainment, finance or services. Land for such use shall be referred to hereinafter as land for operational purposes; 2. The lessee is a natural person, legal person or other organization from abroad; or 3. Other circumstances prescribed by the Municipal People' s Government. In cases other than those set forth in the preceding paragraph, the minimum rent standard for leased land shall be the land use fees set for foreign-invested enterprises in this Municipality. The discount rate for the marked price of the leased land shall be set by the Municipal Land and Housing Administration jointly with the municipal departments of price control and finance. Article 13 Registration of Leased Land Use Rights The lessee of land shall go to land and housing registration organizations to complete registration procedures for the leased land use rights in accordance with the following provisions: 1. If the original buildings, structures and other fixtures on the leased land have already been removed or the buildings, structures and other fixtures on the leased land are leased together with the land, the lessee shall go with the lease contract to complete the registration procedures for the leased land use rights. 2. If the lease contract provides that the lesser shall be responsible for removal of the buildings, structures and other fixtures on the leased land, the lessee shall go through the registration procedures for the leased land use rights when the lesser has delivered the lot in accordance with the provisions of the contract. 3. If the lease contract provides that the lessee shall be responsible for removal of the buildings, structures and other fixtures on the leased land, the lesser shall issue a certificate for temporary use of the land and the lessee shall go through the registration procedures for the leased land use rights when he/she has completed removal of the buildings, structures and other fixtures on the leased land. When registration of the leased land use rights has been completed, the Municipal Land and Housing Administration shall issue a title deed of real estate on which "leased land" shall be marked. Chapter III Rights and Obligations of Parties to the Lease Article 14 Requirements on the Development, Use and Management of the Land The lessee shall develop, use and manage the leased land in accordance with the planned nature, requirements and other conditions for the development of the land as provided in the lease contract. Article 15 Alteration of the Planned Nature or Requirements on the Use of the Land In case the lessee needs to change the planned nature or requirements on the use of the land stipulated in the lease contract before the termination of the contract, he/she shall submit an application to the lesser and the urban planning administrative departments. Provided approval is obtained, the lessee shall sign a new contract or sign a supplementary contract with the lesser and make appropriate rent adjustments. If the application is denied, the lesser or the urban planning administrative departments shall inform the lessee of the decision in writing. Article 16 Conditions for the Transfer of Real Property on the Leased Land If the use rights to state-owned land are obtained by lease, transfer of real property on the land shall comply with the following conditions: 1. The land is developed in accordance with the provisions of the lease contract, and the surface buildings, structures and other fixtures have been completed; and 2. The lessee has completed the registration of the land use rights of the leased lot, and ownership registration of the surface buildings, structures and other fixtures, and has acquired the title deed to the real property. If the use rights to state-owned land are obtained by lease, the rights and obligations stipulated in the lease contract shall be transferred with the transfer of the real property. Article 17 Restriction on the Transfer of Real Property on Lease Lot If the lease contract provides that the transferee must be a natural person, legal person or other organization from within the country, approval shall be obtained from the lesser in case the real property on the leased lot needs to be transferred to a natural person, legal person or other organization from abroad. If the lesser agrees to the transfer, a new contract shall be signed between the transferee and the lesser and appropriate rent adjustments shall be made. Article 18 Division of Use Rights to Leased Lot When the buildings, structures and other fixtures on the leased lot are transferred, the use rights to the leased land occupied by such buildings, structures and other fixtures go with them. When the use rights to the leased lot are divided, the transferees shall acquire appropriate land use rights in proportion to the buildings, structures and other fixtures transferred, and shall be entitled to the rights and subject to the obligations as provided in the lease contract. The boundaries and areas involved in the division of the use rights to the leased land shall be delimited and determined by the district/county land administrative departments in the location of the leased land. Article 19 Cooperation and Joint Operation of Leased Land Use Rights Within the term of lease of state-owned land, the lessee may use the rights to the leased land as a condition for cooperation or joint operation with others. Article 20 Mortgage of Real Property on Lease Lot Within the term of lease of state-owned land, the buildings, structures and other fixtures lawfully erected on the leased lot may be mortgaged. Upon disposal of the mortgaged property, the lease contract shall be performed by the transferee who has lawfully acquired the mortgaged property. Article 21 Lease of Real Property on Leased Lot Within the term of lease of state-owned land, the buildings, structures and other fixtures lawfully erected on the leased lot may be leased, but the term of lease shall not exceed the difference between the contracted years of lease for the state-owned land and the number of years the lessee has already used the land. Article 22 Handling of Cases Involving the Lessee' Death, Alteration, or Termination In case of the lessee' death, alteration or termination within the term of lease of state-owned land, the lease contract shall be handled in accordance with the following provisions: 1. In case the legal person or other organization who leased the land is terminated, merged or split in accordance with the law, the lease contract may be continued and performed by the natural person, legal person or other organization who has lawfully acquired the buildings, structures and other fixtures on the leased land; or 2. In case the natural person who leased the land dies, the lease contract may be continued and performed by the legitimate heir to or the person who has been bequeathed the buildings, structures and other fixtures on the leased land. Article 23 Payment of Rent The lessee shall pay rents to the lesser in the amount, time and mode of payment as stipulated in the lease contract. The rents shall be paid in two installments each year unless otherwise provided for in the lease contract. If the use of the land after delivery is less than half a year in the year of the signing of the lease contract, rent for that year is exempted. If the use of the land after delivery is more than half a year in the year of the signing of the lease contract, half a year' s rent shall be paid. Article 24 Adjustment of Rent Rent of the leased land shall be adjusted appropriately in accordance with the time and extent of adjustment of the minimum standard. If there are provisions in the lease contract for rent adjustment, such provisions shall be followed, but the rent shall not be lower than the lowest standard rate of the same period. Article 25 Turning In of Rent and Tax on Leased Lot The land administrative departments shall turn in the rents collected to the finance departments. Urban land use tax on the use of the leased land shall be withheld by the taxation departments from the rents. Chapter IV Recall of Use Rights to Leased Land Article 26 Renewal of Use Rights to Leased Land The use rights to the leased land shall terminate with the expiration of term of lease of state-owned land. In case the lessee needs to renew the lease of the land, he/she shall apply for renewal 6 months before the expiration of the contract. The lessee' s application for renewal of the lease shall be approved, except in cases where the public interests demand the recall of the use rights to the leased land. When approval for the renewal is granted, the lessee shall sign a new contract with the lesser and go through the registration procedures for the leased land use rights. Article 27 Recall of Land Use Rights upon Expiration of the Lease If the lessee' s application for renewal of the lease is denied, the use rights to the state-owned land shall be recalled by the lesser on the expiration of the lease contract. In such cases, the lesser shall make appropriate compensations to the lessee for the buildings, structures and other fixtures on the leased land unless otherwise provided for in the lease contract. If the lessee did not apply for renewal upon expiration of the lease contract, the lesser may recall the use rights to the state-owned land without compensating the lessee unless otherwise provided for in the lease contract. Article 28 Recall of Use Rights to Leased Land Before Expiration of Contract The use rights to leased land shall not be recalled before expiration of the lease contract. However, the use rights to leased land may be recalled before expiration of the lease contract in accordance with the procedures stipulated by law in either of the following circumstances: 1. Public interests demand that the use of land be adjusted; or 2. Implementation of city planning demands that the use of land be adjusted. Article 29 Procedures for Recall of Use Rights to Leased Land Before Expiration of the Contract In case the use rights to the leased land needs to be recalled before expiration of the contract, the lesser shall inform the lessee, 6 month in advance, of the location of the leased lot, its boundaries, reasons for recall and date of recall, and post a public notice within the boundaries of the leased lot. Article 30 Compensation for Recall of Use Rights to Leased Land Before Expiration of Contract In case of recall of use rights to the leased land before expiration of contract, the lesser shall make appropriate compensations to the lessee. The amount of compensation for recall of use rights to the leased land before expiration of contract shall be settled by consultation between the lesser and the lessee, taking into consideration the nature of the planned use for the leased lot, the remaining time of the term of lease and the value of the buildings, structures and other fixtures on the leased lot. Or it may be settled after evaluation of the real property on the leased lot by a real property evaluation organization of appropriate qualifications. If the lessee objects to the fixing of the amount of compensation, he/she may take legal action in a people' s court. Nevertheless, recall of use rights to the leased land may take effect on the date announced in the public notice. Article 31 Exchange of Use Rights to Leased Land In the case of recall of use rights to leased land before expiration of contract, the lesser may, after agreement has been reached by consultation, grant the use rights to another lot in exchange for the use rights to the leased lot . In the case of exchange of use rights to leased land, the lessee shall sign a new contract with the lesser and go through the registration procedures for the use rights to leased land. Article 32 Handling of Cases in Which the Lessee Terminates the Lease Before Expiration of Contract In case the lessee requests termination of the lease before expiration of the contract for lease of state-owned land, he/she shall inform the lesser 3 months in advance. In such cases, the lesser may recall the use rights to the leased land without making any compensation and the lessee shall bear the liabilities for breach of contract unless otherwise provided for in the lease contract. Chapter V Legal Liability Article 33 Penalty for Violation of Provisions for Planning and Management The lessee who does not develop, use or operate the land in accordance with the nature of planned use or the requirements as provided for in the lease contract shall be penalized by planning administrative departments in accordance with relevant laws and regulations. Article 34 Liabilities of the Lessee and Lesser for Breach of Contract In case the lesser does not deliver the leased lot in accordance with the provisions of the contract, the lessee is entitled to cancel the lease contract and may demand damages for breach of contract. In case the lessee does not pay rent in time or does not pay the rent in full, the lesser shall prompt and urge the lessee to make the payment and the lessee shall pay a fine for delaying payment of 0.3% of the rent for each day of delay. If the lessee fails to pay the rent 2 years after the payment is due, the lesser is entitled to cancel the lease contract and may demand damages for breach of contract. If the lessee does not develop, use or operate the land within the time stipulated in the lease contract, or violates the terms of contract for its development, or transfers, sub-leases or mortgages the use rights to the leased land without authorization, the municipal land and housing Administration or the district/county land administrative departments shall enjoin him/her to make rectification within the prescribed period of time. In case the lessee fails to make rectification within the prescribed period of time, the lesser is entitled to terminate the lease contract, recall the use rights to the leased land without making compensations and may demand compensations for breach of contract. Article 35 Administrative Review and Legal Action If a party to the lease finds the administrative department' s specific act unacceptable, he may apply for administrative review or take legal action in accordance with the provisions of regulations and laws on administrative review and litigation. The administrative department that made the administrative decision may, in accordance with the provisions of the Administrative Litigation Law of the People' s Republic of China, apply to the people' s court for enforcement, in case the party concerned neither applies for reconsideration, nor takes legal action, nor performs its specific administrative act within the time limit prescribed by law. Chapter VI Supplementary Provisions Article 36 Provisions on the Formerly Assigned Land Use Rights The person who acquired use rights to state-owned land by assignment before the implementation of these Procedures may switch to the lease mode for the use rights to state-owned land in accordance with these Procedures. Article 37 Lease of Land for Temporary Use These Procedures may be used as a reference in the lease of state-owned land for temporary use. Article 38 Date of Implementation These Procedures shall become effective on September 1, 1999. |
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