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Regulations of Shanghai Municipality on the Lease of Houses

Regulations of Shanghai Municipality on the Lease of Houses
 
(Adopted at the 15th Session of the Standing Committee of the 11th Shanghai Municipal People' s Congress on December 27, 1999)
    
     Chapter I General Provisions
     Article 1
     These Regulations are formulated pursuant to the Contract Law of the People' s Republic of China, the Law on the Administration of Urban Land and Housing of the People' s Republic of China and other relevant laws and administrative rules and regulations and with the actual circumstances of this Municipality taken into consideration, to standardize the acts of leasing of houses of this Municipality, to protect the legitimate rights and interests of the parties to leasing of houses, and to safeguard the order of the market of house leasing.
     Article 2
     These Regulations apply to the lease of houses and the administration of house leasing within the administrative area of this Municipality.
     Article 3
     "Lease of House" referred to in these Regulations means the act by which the lessor delivers the house to the lessee for the lessee to use or to exploit for profit in return for a rent paid to the lessor by the lessee.
     Article 4
     In house leasing transactions, the parties shall follow the principles of equality, free will, fairness and good faith.
     House leasing shall be subject to tax according to law.
     Article 5
     The Shanghai municipal land and housing administrative department is the authority in charge of house leasing in this Municipality. The district/county land and housing departments are the administrative departments in charge of house leasing within their respective jurisdictions, and are professionally under the leadership of the municipal land and housing administrative department.
     Relevant administrative departments shall coordinate in the implementation of these Regulations in accordance with their respective duties.
    
     Chapter II Scope and Conditions of a Lease
     Article 6
     The lessor of a house shall be a natural person, a legal person or other organization that has the ownership of the house in question. However, the managing agent who manages housing for the benefit of others in accordance with the law and any other person who has right to or interest in the house may also be the lessors.
     Article 7
     The lessee may be a natural person, a legal person or other organization both within and outside the territory of the People' s Republic of China, unless otherwise provided by laws, rules and regulations, or otherwise stipulated by the land use right assignment contract or land lease contract.
     Article 8
     A house that falls within any of the following categories shall not be leased:
     1. A house that has not been registered in accordance with the law, and for which now real estate ownership certificate or other legal ownership certificate has been obtained;
     2. A house that is jointly owned and the lease of which has not been approved by all the co-owners;
     3. Housing the lease of which involves a change of its uses that must be but has not been approved by relevant authorities;
     4.A house which has been identified as dangerous premises; or
     5.A house in other circumstances that the lease of which is prohibited by laws, rules, or regulations.
     Article 9
     Real estate developers shall lease in advance only those of their commodity houses that shall meet the requirements for sale in advance and shall obtain a permit for selling commodity houses in advance verified and issued by the municipal or district/county land and housing administrative department.
     Real estate developers shall not lease in advance the commodity house in advance that have been sold in advance, nor shall a person who purchases the commodity house put out the commodity house purchased in advance to lease.
     Article 10
     Lessors who lease houses built on land acquired through allotment shall turn in the fruit of the land contained in the rent to the state treasury, except when the house is leased for rents at the rate stipulated by the municipal people' s government.
     The specific standard rate and method of collection of fruit of the land shall be stipulated by the people' s government in a separate document.
    
     Chapter III Conclusion, Registration and Entering in the Record of the Lease Contract
     Article 11
     The parties to a housing lease contract shall conclude a lease contract in writing.
     The municipal land and housing administrative department, jointly with other relevant departments, shall prepare a model form contract for lease of house to be used as reference by the parties to the lease. For lease of State-owned residential houses, the certificate for the lease of State-owned houses uniformly printed by the municipal land and housing administrative department may be used.
     Article 12
     The lease contract shall contain the following:
     1. The name and address of the parties to the lease;
     2. The location, area, structure, auxiliary facilities and the conditions of the facilities;
     3. The use of the house;
     4. Date of delivery of the house;
     5. Term of the lease;
     6. Amount of rent, mode of payment and the term of payment;
     7. Restrictions on the use of house, and responsibility for maintenance;
     8. Condition of the house upon return to the lessor;
     9. Liability for breach of lease contract;
     10. Method of settlement of disputes; and
     11. Other matters agreed upon by the parties to the lease.
     Article 13
     The rent of the house under the lease shall be determined by the parties upon consultation, however, the rent of the following types of houses shall be based on the rate stipulated by the Municipal People' s Government
     1. State-owned residential houses;
     2. Non-residential houses leased by way of administrative allotment; and
     3. Non-residential houses built on the investment of the government for the benefit of the general public.
     The handling of the rents and the relationship of the parties to the lease of privately owned residential house which, prior to the implementation of these Regulations, has been leased for rent at the rate stipulated by the Municipal People' s Government, shall be separately stipulated by the Municipal People' s Government.
     Article 14
     The term of the lease shall be determined by the parties to the lease upon consultation, however, such term shall not exceed the term of land use provided in the land use right assignment contract, and the term of the use of land stipulated in the land lease contract shall not exceed 20 years.
     Upon the expiration of the term of the lease of a house, the parties to the lease may renew the lease contract, however, the renewed term shall not exceed the term of land use provided in the land use right assignment contract, and term of land use stipulated in the land lease contract shall not exceed 20 years.
     When the parties to the lease have not stipulated the term of the lease of the house, nor can it be determined by provisions of law, the lease shall be regarded as a lease without a definite term. The parties to a lease contract without a definite term may terminate the leasehold relation at any time, however, the lessor shall notify the lessee of the termination a reasonable time prior to the termination of the lease.
     The lessor of State-owned residential houses shall not terminate the leasehold relation unless otherwise provided by these Regulations.
     Article 15
     The parties to the lease shall complete the formalities of filing with the district/county real estate registration office whose jurisdiction encompasses the place where the housing in question is located.
     Without the filing, housing lease contract shall not be held against third parties.
    
     Chapter IV Delivery, Use and Maintenance of a Leased House
     Article 16
     The lessor shall deliver the house to the lessee according to the stipulations of the lease contract.
     Upon lessor' failure to make timely delivery of the house, the lessee may notify the lessor and urge the lessor to deliver the housing within a reasonable period of time. Upon lessor' s failure to deliver after the reasonable period of time, the lessee may discharge the lease contract.
     If the house delivered by the lessor fails to conform to the terms of the lease contract, thus making the lessee incapable of achieving the purpose of the lease, the lessee may discharge the lease contract.
     Article 17
     If the defects exist at the time of delivery of the house, and affect the lessee' s normal use, the lessee may demand the lessor to make repairs within a time limit or a reduction of the rent. If the defects jeopardize the safety of the lessee, the lessee may discharge the contract at any time.
     Article 18
     If the house under the lease has been mortgaged before the lease, or if the transfer of ownership of the house is restricted by law, the lessor shall inform the lessee of the mortgage or restriction in advance by writing.
     Article 19
     The lessor and the lessee may agree on a deposit based on such factors as the term of the lease, the term for the payment of the rent, the uses of the house, and the responsibilities for maintenance, however, the lessor of State-owned residential houses shall not collect deposits for lease of houses.
     Upon termination of the leasehold relation, the deposit shall be returned to the lessee after deducting the amount for setting off the expenses as stipulated by the lease contract to be borne by the lessee.
     Article 20
     The lessee shall use the leased house in a reasonable manner in accordance with the purpose set forth in the lease contract, and abide by the provisions of the State and this municipality on the use of house and management of property. When the lessee needs to change the use of the house, the lessee shall obtain written consent from the lessor. If examination and approval by relevant authorities is required under law, the lessor, or the lessee by the authorization of the lessor, shall submit the application to relevant authorities for approval.
     If the lessee changes the use of the housing without acquiring lessor' s consent, and as a result the house is damaged, the lessor may discharge the lease contract.
     The lessor may inspect the lessee' s use of the house, however, such examination shall not affect the lessee' s normal use of the housing. The lessee shall render cooperation necessary for such inspection.
     Article 21
     If the house under the lease contract is not a separate and complete suite, the lessor shall define expressly in the lease contract the scope, condition and requirement with respect to right to use the parts of the house of the lessee shares with others.
     When a neighboring lessee has a dispute over the shared parts, the lessor of both the lessees shall coordinate in the settlement of the dispute and provide a written opinion on the principle of fairness and reasonableness, within 30 days after a disputing party submits its request for settlement of the dispute.
     When the lessee has a dispute over the shared parts with an owner or lessee of adjacent house, the lessor shall settle the dispute after consultation with the owner of the adjacent house.
     Article 22
     When the lessee fits up the house, or adds auxiliary facilities, the lessee shall obtain the approval of the lessor in writing. The parties to the lease upon consultation thereof, shall determine ownership of the added auxiliary facilities, and the responsibility for maintenance. If approval by relevant authorities is required under law, the lessor, or the lessee by the authorization of the lessor, shall submit the application to relevant authorities for approval.
     If the lessee fits up the house or adds auxiliary facilities without the approval of the lessor, or if the lessee fits up the house or adds auxiliary facilities beyond the scope or requirement of lessor' s approval, the lessor may request the lessee to restore the house to its former state, or to pay damages.
     Article 23
     The lessee shall pay the rent as agreed on in the lease contract.
     The lessor shall collect the rent as agreed on in the lease contract. The Lessor shall collect no other payment of expenses from the lessee, unless otherwise provided in the lease contract.
     The lessee shall pay penalties for delayed payments of rent. The amount of penalty shall be computed on the basis of the rate agreed on in the lease contract. In the absence of such agreement, the penalty shall be computed at the rate of 0.04% of the delayed rent for each day of delay.
     If the lessee defaults on the payment of the rent for more than 6 months, the lessor may discharge the contract, unless otherwise provided for in the lease contract.
     Article 24
     Expenses that incur as a result of the lessee' s use of water, electricity, gas, communication facilities and air-conditioning shall be borne by the lessee, unless otherwise provided in the lease contract.
     Article 25
     The gains from the lessee' s use of the house shall belong to the lessee, unless otherwise provided in the lease contract.
     Article 26
     The lessor shall conduct maintenance operations for the house on a regular basis, and shall keep the house in a state fit for use. When the lessee finds that the house is damaged, the lessee shall request repair by notifying the lessor. The lessor shall repair the house in a timely manner, unless otherwise provided in the lease contract.
     Article 27
     In conducting repair and maintenance operations, the lessor shall take measures to reduce the impact of such operation on the use of the house by the lessee. The lessee shall render cooperation necessary for the lessor' s repair and maintenance operations.
     Article 28
     The lessee shall not be liable for the wear and tear of the house to the extent that the use of the house is in accordance with the terms of the lease contract.
     If the lessee causes damages, the lessee shall be responsible for repair. If the lessee caused damages to the structure of the house, the lessor shall have the right to discharge the lease contract.
    
     Chapter V Sublease
     Article 29
     Sublease means the leasing by the lessee of the house or a portion of the house during the term of the lease.
     Article 30
     Under any of the following circumstances, the house shall not be subleased:
     1. The lessee defaults on the payment of the rent;
     2. The lessee builds structures in the house without authorization; or
     3. A commodity house leased in advance.
     Article 31
     If it is stipulated in the lease contract that the house may be subleased, the lessee may sublease the house according to the stipulations. If the lease contract does not stipulate that the house may be subleased, the lessee shall obtain the written approval from the lessor before subleasing the house. If the lessee subleases the house without the lessor' s approval, the lessor may discharge the lease contract.
     Lessee of State-owned residential house does not have to obtain the approval from the lessor for sublease. But the lessor shall be given written notice before the execution of the sublease contract. If the lessor is not notified of the sublease, he may discharge the lease contract.
     When the leased house is not a separate and complete suite, the sublease shall not affect the neighboring parties, normal use of the shared parts.
     Article 32
     If during the term of sublease the lease contract is modified and such modification affects the performance of the sublease contract, the sublease contract shall be modified accordingly. If during the term of the sublease the lease contract is discharged, the sublease contract shall also be discharged.
     Article 33
     Rents for sublease shall be determined upon consultation between the parties to the sublease.
     Article 34
     The final date of the termination of the term of the sublease shall not extend beyond the date of expiration of the term of the lease contract.
     Article 35
     During the term of the sublease, the lessee shall continue to perform the lease contract, unless otherwise provided by agreement between the lessor and the parties to the sublease.
     During the term of the sublease, the rights and obligations of the parties to the sublease shall be determined by reference to the rights and obligations of the lessor and lessee provided by these Regulations.
     Article 36
     The lessor of a State-owned residential house shall not acquire a profit from the gains of the lessee from a sublease.
    
     Chapter VI Change and Termination of the Lease Contract Relationship
     Article 37
     If a house is transferred during the term of the lease, the transferee of the house shall continue to perform the lease contract, and sign with the lessee a contract for alteration of the subject of the lease.
     If a house in question is sold during the term of the lease, the lessor shall notify the lessee of the sale 3 months in advance, and the lessee shall have the preemptive right on the same terms and conditions of purchase.
     Article 38
     When the lessee assigns his right under the lease to a third party during the term of the lease, he shall acquire written approval from the lessor for the assignee of his right of lease to continue the performance of the lease contract, and sign with the lessor a contract for altering the subject of the lease contract.
     The lessee of a State-owned residential house shall acquire prior written approval from those cohabitants of the houses that have permanent resident status in this Municipality before he assigns his right under the lease.
     Article 39
     When lessees exchange their leased houses for use, they shall acquire prior written approval from the lessors. Such approval shall not be withheld bye the lessors without justifiable cause if the houses in question are State-owned residential houses.
     The parties to such exchange of the house for use shall conclude a contract for such exchange in writing, and they shall conclude contracts for altering the subject of the lease contract with their respective lessors.
     When the lessees of State-owned residential houses exchange their leased houses for use, they shall acquire prior written approval from those cohabitants who have permanent resident status in this Municipality.
     Article 40
     When, upon consultation and agreement, the lessee of a State-owned residential house and the cohabitants who have permanent resident status in this Municipality request to have the name of the lessee changed to one of the cohabitants who have permanent resident status in this Municipality, the lessor shall give his approval
     When the lessee of a State-owned house cancels the registration of his/her residency in this Municipality, and the cohabitants who have permanent resident status in this Municipality, upon consultation and agreement, request to have the name of the lessee changed to one of the cohabitants who have permanent resident status in this Municipality, the lessor shall give his approval. If the cohabitants are unable to agree after consultation, the lessor shall designate a lessee from among the cohabitants who have permanent resident status in this Municipality.
     After the change of the lessee, the cohabitants of the former lessee shall continue to have the right to live in the house.
     Article 41
     In the event of the death, change, or termination of either party to the lease contract during the term of the lease, relationship of the parties to the lease shall be handled in accordance with the following provisions:
     1. If the lessor dies or terminates by operation of law, the inheritor or successor-in-interest of the house shall continue to perform the lease contract.
     2. If the lessee of residential house dies, his/her surviving cohabitants may continue to perform the lease contract. When the lessee of a State-owned residential house dies, his surviving cohabitants who have permanent resident status of this Municipality may continue to perform the lease contract. If the residency of such cohabitants are not registered in the place where such house is located, or if the deceased had no cohabitants, the living spouse or the direct relatives of the deceased may continue to perform the lease contract, if they have permanent resident status in this Municipality.
     3. If the lessee of a non-residential house dies or terminates by operation of law, the lease contract shall be modified or terminated in accordance with the law.
     4. If either of the parties to the lease has a split-off or a merger, the surviving party to the lease shall continue to perform the lease contract.
     When under item (2) of the preceding clause more than one person may continue to perform the lease contract, the lessee shall be designated after consultation between them. If they are able to agree after consultation, the lessor shall have the name of the lessee changed. If they are unable to agree, the lessor shall designate one as lessee from among those who may continue to perform the lease contract.
     After such change in the relationship of the parties to the lease, the cohabitants of the former lessee shall continue to have the right to live in the house.
     Article 42
     If during the term of the lease the house is renovated, extended or demolished for reconstruction, resulting in a change in the area or relocation of the leased house, the lessor shall sign with the lessee a contract for modifying the lease contract upon agreement after consultation.
     If the house needs to be demolished as a result of urban development during the term of the lease, the relationship of the parties under the lease shall be as stipulated in the lease contract. If the lease contract has no such stipulation, the relevant provisions for administrating the demolition of urban houses shall apply.
     Article 43
     In the event of any of the following circumstances, the relationship of the parties under the lease shall be terminated:
     1. The land use right apportioned to area occupied by the house has been taken back in accordance with the law;
     2. The house has been requisitioned for public needs in accordance with the law; or
     3. The house is damaged or destroyed, or is found to be dangerous premises by experts.
     In the event of any of the occurrences set forth in items (1) and (2) of the preceding clause, the unit that takes back the land use right in accordance with the law or the unit that requisitions the house in accordance with the law shall resettle the lessee. In the event of the occurrence set forth in item (3) to the State-owned residential house, the lessor shall resettle the lessee.
     Article 44
     If, upon the expiration of the term of the lease the house in question is continued to be leased, the lessee of the lease contract shall have the priority to lease the house on the same terms and conditions.
     Article 45
     When the contractual relationship of the parties under the lease is terminated, the lessor shall have the right to take back the house and the lessee shall have the obligation to return the house to the lessor. If the lessee does not return the house in the prescribed period of time, the lessor shall have the right to collect in arrears money for the use of the housing during such occupation.
     The house returned to the lessor shall be in state after normal use, or in a state stipulated by the parties to the lease. If the state of the house does not comply with the aforesaid, the lessor may request the lessee to repair, or the lessor may undertake to repair and the reasonable expenses of such repair shall be borne by the lease.
    
     Chapter VII Legal Liability
     Article 46
     Any party to the lease who violates Article 6, 7, 8, 9 or 30 of these Regulations and causes the lease contract to become invalid shall have civil liability in accordance with the law.
     If a party' s non-performance of the obligations provided by these Regulations and the other party discharges the lease contract pursuant to Articles 16 (2) and (3), Article 17, Article 20 (2) , Article 23 (4), Article 28(2), Article 31 (1) and (2), the party to the lease contract that has not performed the obligations shall have civil liability in accordance with the law.
     If the non-performance of the obligations stipulated in the lease contract of a party to the lease causes losses of property or personal injury to the other party or to a third party, he shall have civil liability in accordance with the law.
     Article 47
     If the lessor leases a house that is prohibited from being leased in violation of Article 5(1), (3), (4), or (5) of these Regulations, or if the lessee sublease a house that is prohibited from being subleased in violation of Article 30 of these Regulations, the district/county land and housing administrative department shall enjoin such party to rectify within a prescribed period of time, confiscate his/her unlawful gains, and penalize him/her with a fine of an amount not more than 1 time the amount of the unlawful gains.
     Article 48
     If a party puts a commodity house to lease in advance in violation of Article 9 of these Regulations, the district/county land and housing administrative department shall enjoin such party to rectify within a prescribed period of time, confiscate his unlawful gains, and penalize him with a fine that is not less than 1 time but not more than 3 times the amount of the unlawful gains.
     Article 49
     If the lessor fails to pay land proceeds in violation of Article 10 hereunder, the district/county land and housing administrative department shall enjoin such party to rectify within a prescribed period of time and may penalize him with a fine that is not more than the amount of front of the land due and unpaid.
     Article 50
     If a party changes the rate of rent without authorization in violation of Article 13 of these Regulations, the district/county land and housing administrative department shall enjoin such party to rectify within a prescribed period of time, return the excessive rent he/she has collected, and penalize him/her with a fine of 1,000 to 10,000 yuan inclusive.
     Article 51
     If the official in charge of the municipal or district/county land and housing administrative department or others who are directly responsible persons neglect their duty, abuse their power or commit fraudulent acts for personal gains shall be subject to disciplinary sanction by their units or by superior administrative departments in charge of their units. If their wrongful act constitutes a crime, they shall be prosecuted for criminal liability.
     Article 52
     A party, who refuses to accept as final a specific administrative act done by the administrative department, may petition for administrative review or institute legal proceedings against the administrative decision in accordance with the Law of the People' s Republic of China on Administrative Review and the Administrative Litigation Law of the People' s Republic of China.
     If a party does not apply for administrative reconsideration, nor institute legal proceedings within the prescribed period of time, nor perform the administrative act, the administrative department that has done the administrative act, may petition to the people' s court for enforcement.
    
     Chapter VIII Supplementary Provisions
     Article 53
     The Municipal People' s Government shall provide the procedures on the lease residential houses by families with the minimum level of income.
     Article 54
     These Regulations shall become effective on July 1, 2000. At the same time the Regulations of Shanghai Municipality on the Administration of State-owned Houses in the Urban Area and Towns shall be repealed.
    

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