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Procedures of Shanghai Municipality on the Administration of Transactions in Property Rights
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| (Promulgated by the Shanghai Municipal People' s Government on December 22, 1998) Chapter I General Provisions Article 1 Purpose These Procedures are formulated in order to cultivate and develop the market of transactions in property rights, standardize the acts of transactions therein and promote the optimization of resources disposition. Article 2 Scope of Application Whoever conducts activities in property right transactions within the jurisdiction of this Municipality shall abide by these Procedures. Article 3 Principles of Transfer Transactions in property rights shall follow the principles of voluntariness, compensation of equal value, good faith, openness, fairness and impartiality. Article 4 Conducting Transactions Transaction in rights of State-owned or collectively owned property under the jurisdiction of this Municipality shall be conducted at the Shanghai Property Rights Exchange (hereinafter referred to as Property Rights Exchange). Transactions in rights of other properties may be conducted at the Property Rights Exchange. Transactions of property rights otherwise provided for by laws and regulations shall be conducted in conformity with the laws and regulations. Article 5 Protection of Lawful Rights and Interests of the Employees The transferor and the transferee shall protect the lawful rights and interests of the employees in accordance with the law, and shall incorporate the stipulation that both parties agree on in the contract of property right transaction that they shall make appropriate arrangements for the employees (including retired employees) of the transferor. In the event of a transfer of a state-owned enterprise, the congress of workers and staff and the trade union of the transferor shall be consulted for their opinion before a decision is made. In the event of a transfer of a collectively owned town enterprise, the transfer shall be approved by the assembly of workers and staff (representative) of the transferor and a resolution therefor shall be made. Article 6 Administrative Department The Shanghai Municipal Administrative Office of State-Owned Property (hereinafter referred to as the Municipal State-Owned Property Office) is the competent administrative department for transactions in property rights and shall be responsible for the administration and coordination of transactions in property rights in accordance with the law. The Shanghai Municipal Administrative Office of Transactions in Property Rights (hereinafter referred to as the Municipal Property Right Transactions Administrative Office) is the supervisory organization for the market of transactions in property rights in this Municipality, and shall be responsible for the specific supervision and administration of the transactions in property rights under the leadership of the Municipal State-Owned Property Office. All relevant departments of this Municipality shall, in accordance with their respective duties, assist the Municipal State-Owned Property Office in doing a good job of the administration of transactions in property rights. Chapter II Organizations of Transactions in Property Rights Article 7 Nature of Property Rights Exchange The Property Rights Exchange is a non-profit self-disciplined institutional legal person established with the approval of the Municipal People' s Government. It provides premises, facilities and information service for transactions in property rights and perform relevant functions. Article 8 Rules for Transactions in Property Rights and Constitution of Property Rights Exchange The Municipal Property Right Transactions Administrative Office shall be responsible for the formulation of rules for transactions in property rights and supervise the implementation of those rules. The general meeting of the members of Property Rights Exchange shall formulate the constitution of the Property Rights Exchange and report it to the Municipal Property Right Transactions Administrative Office for the record. Article 9 Membership Whoever undertakes broking activities in property rights transactions at the Property Rights Exchange, shall apply for registration to the Administrative Department of Industry and Commerce, and upon acquiring the qualification of a broking organization may become a member of the Property Rights Exchange after its qualification has been authenticated by the Municipal Property Rights Transactions Administrative Office. The Property Rights Exchange shall issue to each broking organization having acquired membership a membership certificate defining the scope of its broking activities in conducting property right transactions. Chapter III Mode and Procedure of Property Right Transactions Article 10 Mode of Transaction Transactions in property rights may be conducted in the mode of transfer by agreement, auction or bid invitation, or it may be conducted in other ways provided for by laws, rules or regulations. Article 11 Transaction on Commission or Transaction Through Direct Application To be engaged in property right transaction at the Property Rights Exchange, a transferor or transferee may commission a broking organization with membership qualifications to conduct a property right transaction, or it may apply directly to the Property Rights Exchange to conduct a property right transaction. A broking organization shall not accept commission from both the transferor and the transferee in the same property right transaction at the same time. Article 12 Documents to be Submitted by the Transferor In commissioning a broking organization or directly applying for transfer of property rights, the transferor shall submit to the broking organization or the Property Rights Exchange the following materials: 1. The transferor' s qualification certificate or other valid certificate; 2. Property right ownership certificate; 3. Certificate approving the property right transfer; 4. Description of the subject-matter to be transferred; and 5. Other materials to be submitted as required by the Municipal People' s Government. Article 13 Documents to be Submitted by the Transferee In commissioning a broking organization or directly applying for the purchase of property rights, the transferee shall submit to the broking organization or the Property Rights Exchange the following materials: 1. The transferee' s qualification certificate; 2. Certificate of the transferee' s credit standing; and 3. Other materials to be submitted as required by the Municipal People' s Government. Article 14 Price of Transaction The price for a property right transaction may be determined on agreement by the transferor and the transferee, or it may be determined by auction or bid invitation. The assessed value for the State-owned property right as affirmed by the department for the administration of State-owned property shall be taken as the basic price of its selling price. If the selling price is lower than 90% of the basic price, it shall be subject to the approval of the department for the administration of State-owned property. The value assessed by a qualified property assessment organization shall be taken as the basic price of the selling price for the collectively owned property right. If the selling price is lower than 90% of the basic price, it shall be subject to the approval of the owners of the collective property right. Article 15 Signing of Contract and Its Contents The transferor and the transferee, after agreeing on an intent on property right transfer shall sign a contract for the property right transaction. The contract for the property right transaction shall include the following: 1. Subject-matter of transfer; 2. Names, addresses, and legal representatives of the transferor and the transferee; 3. Price of transfer, and mode and time of payment; 4. Method of succession to claim and debt and method of repayment; 5. Matters with respect to turnover of property right; 6. Agreements on the arrangements for the placement of the employees; 7. Liability for breach of contract; 8. Mode of settlement of disputes arising out of the contract; 9. Date of signing of the contract; and 10. Other matters that need to be agreed on by the parties. Article 16 Certification of Property Rights Transaction Contracts of the property right transaction signed and sealed by the transferor and the transferee at the Property Rights Exchange shall be examined and verified by the Property Rights Exchange, which shall issue a certificate of the property right transaction. In case the property right transaction is done on commission through a broking organization, the broking organization shall affix its signature and seal on the contract of property right transaction. Article 17 Procedures on Alteration of Title Deed The transferor and the transferee that have conducted property right transaction at the Property Rights Exchange shall, on the strength of the certificate of property right transaction issued by the Property Rights Exchange and the contract of property right transaction, go through the relevant alteration formalities with the relevant departments of state-owned property, taxation, foreign capital, industry and commerce, banking, real estate, labor and social security, public security, public utilities, etc.. All the relevant departments shall, based on the certificate of property right transaction issued by the Property Rights Exchange, complete the relevant alteration formalities within the period of time prescribed by laws, rules and regulations. If a property right transaction may, according to the provisions, be conducted outside the Property Rights Exchange, the title deed alteration formalities and other related formalities can be fulfilled on the strength of the contract of property right transaction. Chapter IV Norms of Acts in Property Right Transactions Article 18 Evaluation of State-Owned Property In the event of a transaction being done in State-owned property right, evaluation shall be done by a qualified property evaluation organization. State-owned property that has already been evaluated shall not be reevaluated. Article 19 Suspension of Property Rights Transactions Any transaction in property rights carried on at the Property Rights Exchange may be suspended on an application being made by the transferor, the transferee or a third party to the Property Rights Exchange and affirmed by the Municipal Property Right Transaction Administrative Office in case one of the following circumstances arises in the course of transaction: 1. A dispute arises and remains unsettled between a third party and the transferor on the property rights to be transferred; or 2. Other circumstances that warrant the suspension of the property right transaction in light of the law. Article 20 Termination of Property Rights Transaction Any transaction in property rights shall be terminated in case one of the following circumstances arises in the course of transaction: 1. The transferor or the transferee applies to the Property Rights Exchange for termination of the transaction and the application is affirmed by the Municipal Property Rights Transaction Administrative Office; 2. A written notice is issued by the people' s court in accordance with the law for the termination of the transaction; or 3. Other circumstances that warrant the termination of the property rights transfer in light of the law. Article 21 Forbidden Acts in Property Right Transaction The following acts are forbidden in property right transactions: 1. Transaction in State-owned or collectively owned property rights outside the Property Rights Exchange; 2. Manipulation of the transaction market or disturbance of the order of transactions; 3. Participation in the property right transaction by the Property Rights Exchange and its staff members as transferor, transferee or a third party; 4. Acts that are detrimental to a fair deal between transferor and transferee; or 5. Other acts forbidden by laws, rules and regulations. Article 22 Provisions on the Charge of Fees The rates of charge on property right transaction shall be fixed in accordance with relevant provisions of the State by the Municipal Price Control Bureau together with the Municipal Finance Bureau and the Municipal State-Owned Property Office. No fees shall be charged by the Property Rights Exchange on property right transaction done at the Property Rights Exchange between the enterprises subordinate to the same corporation authorized to manage State-owned property. Chapter V Supervision and Settlement of Disputes Article 23 Supervision and Administration The Municipal Property Right Transactions Administrative Office shall, in accordance with the provisions of these Procedures, supervise and administer property right transactions and penalize, according to law, the parties who violate the rules of property right transactions. Article 24 Settlement of Disputes in Property Right Transactions In case disputes arise in the course of property right transactions at the Property Rights Exchange, the parties involved may apply to the Property Rights Exchange or the Municipal Property Right Transactions Administrative Office for mediation; or they may apply for arbitration in accordance with the terms of the contract. In the absence of arbitration terms, they may start legal proceedings at the people' s court in accordance with the law. Chapter VI Supplementary Provisions Article 25 Foreign Investor as Transferee Transfer of property rights to a foreign investor shall conform with the stipulations promulgated by the State guiding the orientation of foreign investment and the guiding catalog of industries with foreign investment and shall go through the formalities in accordance with relevant laws, rules and regulations. Article 26 Date of Implementation These Procedures shall become effective on February 1, 1999 |
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