Construction Law of the People's Republic of China (Revised in 2011)

Order of the President No. 46

April 22, 2011

(Adopted at the 28th Session of the Standing Committee of the 8th National People's Congress on November 1, 1997, and revised in accordance with the Decisions on Amending Construction Law of the People's Republic of China passed at the 20st Session of the Standing Committee of the 11th National People's Congress on April 22,2011)

Contents
Chapter I General Provisions
Chapter II Building Permit
Section 1 Building Permit for Construction Project
Section 2 Qualifications for Operations
Chapter III Construction Project Contract Issuance and Contracting
Section 1 General Rules
Section 2 Contract Issuance
Section 3 Contracting
Chapter IV Construction Project Supervision and Control
Chapter V Construction Production Safety Management
Chapter VI Construction Project Quality Control
Chapter VII Legal Liability
Chapter VIII Supplementary Provisions

Chapter I General Provisions

Article 1 This Law is enacted with a view to enhancing the supervision and administration over construction activities, maintaining order in the construction market, ensuring the quality and safety of construction projects and promoting the sound development of the construction industry.

Article 2 This Law shall be abided by in engaging in construction activities and in the exercise of supervision and administration over construction activities within the territory of the People's Republic of China.
The construction activities referred to in this Law mean construction of all types of housing and the construction of their ancillary facilities as well as their matching installation operations of wiring, piping and equipment.

Article 3 The construction activities shall ensure the quality and safety of construction projects and ensure that they are in conformity with the state safety standards for construction projects.

Article 4 The State supports the development of the construction industry, supports scientific and technological research in construction to improve the levels in the design of housing construction, encourages energy economy and environmental protection, encourages adoption of advanced technologies, advanced equipment, advanced techniques and new building materials and modern mode of management.

Article 5 In engaging in construction activities, laws and regulations shall be adhered to, and public interest of society and the legitimate rights and interests of others shall not be infringed upon.
No unit or individual shall hinder or obstruct the construction activities conducted in accordance with law.

Article 6 The competent department of construction administration under the State Council exercises uniform supervision and administration over construction activities nationwide.

Chapter II Building Permit

Section 1 Building Permit for Construction Project

Article 7 A construction unit shall, prior to the start of construction of a construction project, apply to the competent department of construction administration of the people's government at or above the county level of the place wherein the project is to be located for a building permit pursuant to the relevant state provisions; however, small projects under the application threshold as determined by the competent department of construction administration under the State Council are exceptions.
A construction project the report for the start of construction of which has been approved pursuant to the terms of reference and procedures prescribed by the State Council shall no longer obtain a building permit.

Article 8 Application for a building permit shall meet the following terms:
1. Having completed the formalities for the approval of land use for the said construction project;
2. Having obtained the planning permit in the case of the construction project in an urban planning zone;
3. In the case of necessity of demolition and shifting, the pace of demolition and shifting conforming to the requirements of construction;
4. Having determined the construction enterprise;
5. Having construction drawings and technical information which meet the requirements for construction;
6. Having specific measures for ensuring project quality and safety;
7. The construction funds having been made available; and
8. Other terms prescribed by laws and administrative regulations.
The competent department of construction administration shall, within 15 days from the date of receipt of an application, issue a building permit for the application which conforms to the terms.

Article 9 A construction unit shall start the construction within three months from the date of obtaining the building permit. For inability to start the construction in time due to unforeseen reasons, an application for extension shall be filed with the permit-issuing organ; the extension shall be limited to two times, and each time shall not exceed three months. The building permit shall be automatically annulled in the case of a construction project which neither gets started nor applies for extension, or which has exceeded the time limit for extension.

Article 10 For suspension of construction of a construction project under construction due to unforeseen reasons, the construction unit shall, within one month from the date of suspension of the construction, submit a report to the permit-issuing organ and carry out maintenance and administration of the construction project in accordance with rules.
A report shall be submitted to the permit-issuing organ when the construction project resumes construction; prior to resumption of construction of a construction project whose construction has been suspended for a year, the construction unit shall submit a report to the permit-issuing organ for the verification and examination of the building permit.

Article 11 For inability to start construction in time or suspension of construction due to unforeseen reasons, a construction project the report for the start of construction of which has been approved pursuant to the relevant provisions of the State Council shall submit a report to the approval authority in time on the situation. For inability to start construction in time exceeding six months due to unforeseen reasons, formalities for the approval of the report for the start of construction shall be completed again.

Section 2 Qualifications for Operations

Article 12 Building construction enterprises, survey units, design units and project supervision units engaging in construction activities shall have the following qualifications:
1. Having a registered capital conforming to state provisions;
2. Having specialized technical personnel with qualifications for legal operations commensurate with the construction activities engaged in;
3. Having technical equipment for engaging in related construction activities; and
4. Other qualifications prescribed by laws and administrative regulations.

Article 13 Building construction enterprises, survey units, design units and project supervision units engaging in construction activities shall be classified into different grades of human quality in accordance with such human quality qualifications as the registered capital, specialized technical personnel, technical equipment in their possession and achievements in construction projects completed, and may engage in construction activities within the scope permitted by their respective human quality grades on obtaining the corresponding grade human quality certificates upon passing human quality examination.

Article 14 Specialized technical personnel engaging in construction activities shall obtain corresponding qualification certificates for operations in accordance with law and engage in construction activities within the scope permitted by the qualification certificates for operations.

Chapter III Construction Project Contract Issuance and Contracting

Section 1 General Rules

Article 15 The contract issuing unit and contracting unit of a construction project shall conclude a contract in writing according to law expressly defining the rights and obligations of the parties.
The contract issuing unit and contracting unit shall comprehensively fulfill the obligations agreed in the contract. The party that fails to fulfill the obligations pursuant to the agreement in the contract shall bear the liability for the breach of the agreement according to law.

Article 16 Invitation to tender and bidding of the tender of contract issuance and contracting of a construction project shall follow the principle of openness, fairness and equal competition and the contracting unit shall be selected on merit.
For invitation to tender and bidding of the tender of construction projects not prescribed by this Law, provisions of laws relating to invitation to tender and bidding of the tender shall apply.

Article 17 A contract issuing unit and its staff members, in the contract issuance of a construction project, shall not accept bribes and commissions or seek other benefits.
A contracting unit and its staff members shall not employ such unfair means as offering bribes, commissions or giving other benefits to the contract issuing unit and its staff members to contract the project.

Article 18 The cost of a construction project shall, pursuant to relevant state provisions, be agreed upon by the contract issuing unit and the contracting unit in the contract. For a construction project with invitation to open tender, the agreement on its cost shall abide by the provisions of laws on invitation to tender and bidding.
The contract issuing unit shall, pursuant to the agreement in the contract, make allocations for the project in time.

Section 2 Contract Issuance

Article 19 Construction projects shall practice contract issuance by invitation to tender in accordance with law; those construction projects not suitable for contract issuance by invitation to tender may adopt direct contract issuance.

Article 20 For a construction project for invitation to open tender, the contract issuing unit shall, pursuant to the legal procedures and mode, publish a tender notice providing tender documents carrying such contents as major technical requirements of the project open to tender, main articles of the contract, standards and methods of bid evaluation as well as procedures of bid opening, bid evaluation and bid finalization.
Bid opening shall be held in public at the time and place prescribed in the tender document. Evaluation and comparison of bid proposals shall be carried out pursuant to the standards and procedures for bid evaluation prescribed in the tender document after the bids are opened, and selection of the winning bidder made from among bidders with corresponding human quality qualifications on merit.

Article 21 Bid opening, bid evaluation and bid selection of the construction project open to tender shall be organized and carried out by the construction unit according to law and subject to the supervision of the competent administrative departments concerned.

Article 22 For a construction project following contract issuance through tender, the contract issuing unit shall award the contract of the construction project to the contracting unit winning the bid in accordance with law. For a construction project following direct contract issuance, the contract issuing unit shall award the contract of the construction project to the contracting unit with corresponding human quality qualifications.

Article 23 The Government and its subordinate departments shall not abuse their administrative powers in restricting contract issuing units in awarding contracts of construction projects following contract issuance through tenders to designated contracting units.

Article 24 General contracting of construction projects shall be encouraged and dismemberment of contract issuance of construction projects shall be prohibited.
The contract issuing unit of a construction project may award in total the contract of surveying, design, construction and equipment procurement of the construction project to a general contracting unit of the project. It may also award one item or several items of surveying, design, construction and equipment procurement of the construction project to a general contracting unit of the project; however, it shall not dismember a construction project which should be completed by one single contracting unit into several parts for awarding contracts to several contracting units.

Article 25 For building materials, building structural pieces and parts and equipment to be procured by the contracting unit of the project pursuant to the agreement in the contract, the contract issuing unit shall not designate the contracting unit in the procurement of building materials, building structural pieces and parts and equipment for the project, nor shall it designate the manufacturers and suppliers of the same.

Section 3 Contracting

Article 26 The contracting units of construction projects shall contract projects with human quality certificates obtained in accordance with law and within the business scope permitted by their human quality grades.
Building construction enterprises shall be prohibited to contract projects beyond the business scope permitted by their respective human quality grades or in the name of other building construction enterprises in any form. Building construction enterprises shall be prohibited to permit in any form other units or individuals in the use of their human quality certificates, business licenses to contract projects in the name of their respective enterprises.


Article 27 Large construction projects or construction projects with complex structures may be jointly contracted by more than two contracting units. Parties to the joint contract shall bear joint responsibilities in the implementation of the contract.
In the case of a joint contract by more than two units with different human quality grades, the project shall be contracted in accordance with the business scope granted to the unit with lower human quality grade.

Article 28 Subcontracting to others of the entire construction project contracted by the contracting unit shall be prohibited. Subcontracting to others in the name of subcontracting after dismemberment of the entire construction project contracted by the contracting unit shall be prohibited.


Article 29 The general contracting unit of a construction project may award contracts of parts of the contracted project to subcontracting units with corresponding human quality qualifications; however, except for the subcontracting agreed upon in the general contracting contract, acknowledgement of the construction unit shall be obtained. In the case of general contracting of construction, construction of the main structure of the construction project must be completed by the general contracting unit itself.
The general contracting unit of a construction project shall, pursuant to the agreement in the general contracting contract, be responsible to the construction unit; subcontracting units shall, pursuant to the agreement in the subcontracts, be responsible to the general contractor. The general contracting unit and subcontracting units shall bear joint responsibility to the construction unit in respect of the subcontracted projects.
The general contracting unit is prohibited to subcontract the project to units with no corresponding human quality qualifications. The subcontracting unit shall be prohibited to re-subcontract the project it has contracted.

Chapter IV Construction Project Supervision and Control

Article 30 The State practices the construction project supervision and control system.
The State Council may determine the scope of mandatory supervision and control of construction projects.

Article 31 The construction unit of a construction project under supervision and control shall entrust the supervision and control with an engineering supervision and control unit with corresponding human quality qualifications. The construction unit and its entrusted engineering supervision and control unit shall conclude a contract for entrustment of supervision and control in writing.

Article 32 The construction project supervisor-controller shall, pursuant to the laws, administrative regulations as well as relevant technical standards, design documents and the construction project contractual contract, exercise supervision over the contracting unit in construction quality, construction schedule and use of construction funds on behalf of the construction unit.
Engineering supervisors have the power to ask the building construction enterprise to make corrections when they hold that construction of the project does not conform to engineering design requirements, construction technical standards and agreement in the contract.
Engineering supervisors shall, upon discovery of engineering design not in conformity with construction project quality standards or quality requirements agreed in the contract, report to the construction unit to ask the design unit to make corrections.

Article 33 The construction unit shall, prior to the exercise of supervision and control over the construction project, notify the building construction enterprise to be put under supervision and control in writing of the entrusted engineering supervision and control unit, the contents of supervision and control and terms of reference in supervision and control.

Article 34 An engineering supervision and control unit shall undertake engineering supervision and control business within the scope of supervision and control permitted for its human quality grade.
The engineering supervision and control unit shall, in accordance with the entrustment of the construction unit, conduct the missions of supervision and control objectively and fairly.
The engineering supervision and control unit and the contracting unit of the project under supervision and control as well as supply units of building materials, building structural pieces and parts and equipment shall not have subordinate relationship or other relations of interest.
The engineering supervision and control unit shall not transfer its engineering supervision and control business.

Article 35 An engineering supervision and control unit shall bear corresponding liability of compensation in the case of failure to fulfill the obligations of supervision and control agreed in the contract of entrustment of supervision and control, not carrying out inspection or carrying out inspection not in accordance with the provisions over items which should have been put under supervision and inspection, thus causing losses to the construction unit.
An engineering supervision and control unit shall bear joint liability of compensation with the contracting unit for collusion in gaining illegal interests for the contracting unit thus causing losses to the construction unit.

Chapter V Construction Production Safety Management

Article 36 Construction project production safety management must adhere to the policy of safety first and prevention first, establish and perfect the responsibility system of production safety and the system of prevention and treatment by the masses.

Article 37 Construction project design shall conform to the construction safety procedures and technical standards formulated in accordance with state provisions to ensure the safety performance of the project.

Article 38 A building construction enterprise shall work out corresponding safety technical measures according to the characteristics of the construction project in the compilation of design for construction organization; for specialty-intensive items of the project, design for special-purpose safety construction organization shall be compiled and safety technical measures taken.

Article 39 A building construction enterprise shall take such measures as the maintenance of safety, precautions against danger and fire prevention at the construction site; where there are the required conditions, construction site closed management shall be followed.
A building construction enterprise shall take safety protection measures in the case of the construction site causing possible damage to its adjoining buildings, structures or special operational environment.

Article 40 The construction unit shall provide the building construction enterprise with the relevant information on underground piping and wiring of the construction site, and the building construction enterprise shall take measures for their protection.

Article 41 The building construction enterprise shall abide by the provisions of the laws and regulations relating to environmental protection and safety in production and take control and disposal measures at the construction site of various kinds of dust, waste gas, waste water, solid waste as well as noise, vibration polluting and damaging the environment.

Article 42 A construction unit shall, pursuant to the relevant state provisions, go through the formalities of application for approval in case of any of the following circumstances:
1. Need of temporarily occupying sites beyond the approved planned scope;
2. Possibility of damaging such public facilities as roads, pipes and cables, electricity, postal service and telecommunications;
3. Need of temporary suspension of water supply, electricity supply and suspension of road traffic;
4. Need to conduct explosion operations; and
5. Other circumstances requiring going through the formalities of application for approval as prescribed by laws and regulations.

Article 43 The competent department of construction administration shall be responsible for the administration of construction safety in production and subject to the guidance and supervision of the competent department of labor in construction safety in production in accordance with law.

Article 44 A building construction enterprise must, in accordance with law, strengthen construction safety production management, implement the safety production responsibility system and take effective measures to prevent casualties and other accidents in safety production from taking place.
The legal representative of a building construction enterprise shall be responsible for the safety in production of the enterprise.

Article 45 The building construction enterprise shall be responsible for the construction site safety. The general contracting unit shall be responsible for the construction site safety of the project under general contract for construction. Subcontracting units shall be responsible to the general contracting unit and subordinate themselves to the management of the general contracting unit for construction site safety in production.

Article 46 Building construction enterprises shall establish and perfect the educational and training system of safety in labor and production, step up the education and training of workers and staff members in safety in production; no personnel without undergoing education and training in safety in production shall take up posts in operations.

Article 47 Building construction enterprises and their personnel shall, in the process of construction, abide by the laws and regulations relating to safety in production and safety regulations and procedures of the construction industry, and shall not give command in contravention of regulations or operate in contravention of regulations. Operators have the right to put forth suggestions for improvement with regard to the operational procedures and operational conditions adversely affecting physical health and have the right to obtain protective gear necessary for safety in production. Operators have the right to make criticism, report the case of and file charges against acts endangering lives, safety and physical health.

Article 48 Building construction enterprises shall pay the premiums of the industrial injury insurance for employees to participate in such insurance as required by law. Enterprises are encouraged to take out accident insurance and pay premiums for workers engaged in hazardous operations.


Article 49 In restoration or rehabilitation project involving the main body of the building and changes in the weight-bearing structure, the construction unit shall, prior to the construction, entrust the original design unit or a design unit with corresponding human quality qualifications to put forth a design proposal; where there is no design proposal, no construction shall be undertaken.

Article 50 Dismantling of houses shall be undertaken by building construction units with conditions to ensure safety and the person-in-charge of the building construction units shall be responsible for the safety.

Article 51 In the event of an accident in the process of construction, the building construction enterprise shall take emergency measures to reduce casualties of personnel and losses caused by the accident, and submit a report in time to the departments concerned pursuant to relevant state provisions.

Chapter VI Construction Project Quality Control

Article 52 The quality of survey, design and construction of a construction project must conform to the requirements of state safety standards relating to construction projects. Specific control measures shall be formulated by the State Council.
State standards relating to safety in construction projects shall be revised in time when they are unable to adapt to the requirements of ensuring safety in building.

Article 53 The State practices the quality system authentication system with respect to units engaging in construction activities. Units engaging in construction activities may, in accordance with the principle of voluntarism, apply for quality system authentication to authentication agencies acknowledged by the department of product quality supervision administration under the State Council or by the authorized departments of the department of product quality supervision administration under the State Council. Authentication agencies shall issue quality system authentication certificates to those having qualified for the authentication.

Article 54 No construction unit shall, with whatever reasons, ask the building design unit or building construction enterprise to lower the project quality in project design or construction operations in violation of the laws, administrative regulations and quality and safety standards of construction projects.
The building design unit and building construction enterprise shall reject the requests of the construction unit for lowering the project quality in violation of the provisions of the preceding paragraph.

Article 55 For a construction project under general contract, the general contracting unit shall be responsible for the project quality. In the case of the general contracting unit subcontracting out the construction project to other units, the former shall bear joint responsibility with the subcontracting units of the quality of the subcontracted projects. The subcontracting units shall subject themselves to the quality control of the general contracting unit.

Article 56 The survey and design units of a construction project shall be responsible for the quality of their survey and design. Survey and design documents shall conform to the provisions of relevant laws and administrative regulations and construction project quality and safety standards and technical standards for construction project survey and design as well as the agreement in the contract. Such technical indexes as the specifications, types and characteristics of building materials, building structural pieces and parts and equipment selected in the design documents shall be annotated and their quality requirements shall conform to the standards prescribed by the state.

Article 57 No building design unit shall designate manufacturers or suppliers of the building materials, building structural pieces and parts and equipment selected in the design documents.

Article 58 The building construction enterprise shall be responsible for the construction quality of a project.
The building construction enterprise must proceed with the construction in accordance with the project design drawings and construction technical standards and shall not do shoddy work and use inferior materials. The original design unit shall be responsible for revisions in the project design and the building construction enterprise shall not revise the project design on its own.

Article 59 The building construction enterprise must carry out inspections over the building materials, building structural pieces and parts and equipment in accordance with the requirements of the project design, construction technical standards and agreement in the contract and shall not use those that fail to pass the inspection.

Article 60 A building must ensure the quality of its ground foundation project and the main part of the structure within its life expectancy of rational use.
No such quality flaws as leakage, seepage and cracks in roofs and on wall surfaces shall remain upon completion of a construction project; the building construction enterprise shall repair the quality flaws discovered.

Article 61 A construction project handed over for completion acceptance checks must conform to the prescribed construction project quality standards, have complete project technical and economic information and signed project warranty, and have qualified other conditions for completion prescribed by the state.
A construction project may only be handed over for use upon passing the acceptance checks; no construction project shall be handed over for use without going through the acceptance checks or passing the acceptance checks.

Article 62 Construction projects practice the quality warranty system.
The scope of warranty of a construction project shall include the ground foundation project, main part structural project, roof waterproof project and other civil engineering projects as well as installation projects of electrical wiring and water piping and drainage and projects of the heating and cooling systems; the duration of warranty shall be determined in accordance with the principle of ensuring the normal use of the building within its rational life expectancy and safeguarding the legitimate rights and interests of the user. Specific warranty scope and minimum warranty duration shall be laid down by the State Council.

Article 63 Any unit or individual has the right to report to, file a charge or lodge a complaint with the competent department of construction administration or other departments concerned about quality accidents and quality flaws of construction projects.

Chapter VII Legal Liability

Article 64 For construction on one's own without obtaining a building permit or without obtaining approval of the report for the start of construction in violation of the provisions of this Law, an order shall be issued for making corrections; that which does not conform to the conditions for the start of construction shall be ordered to stop construction and may be imposed a fine.

Article 65 In the case of the contract issuing unit issuing contracts of a construction project to contracting units without corresponding human quality qualifications or issuing contracts of a construction project after dismemberment in violation of the provisions of this Law, the violator shall be ordered to make a rectification and imposed a fine.
For contracting a project beyond the human quality grade of the unit, the violator shall be ordered to stop the illegal act and imposed a fine, it may be ordered to suspend operations for consolidation and lower its human quality grade; where the circumstances are serious, its human quality certificate shall be revoked; where there are illegal gains, they shall be confiscated.
Contracting a project without obtaining the human quality certificate shall be banned and imposed a fine; where there are illegal gains, they shall be confiscated.
For obtainment of the human quality certificate by fraud, the human quality certificate shall be revoked and a fine imposed; where a crime has been constituted, criminal liability shall be investigated according to law.


Article 66 Any building construction enterprise that transfers or lends its human quality certificate or permits others to contract a project in the name of the enterprise in other forms shall be ordered to make a rectification, its illegal gains shall be confiscated and a fine imposed, and may be ordered to suspend operations for consolidation and lower its human quality grade; where the circumstances are serious, the human quality certificate shall be revoked. For losses caused by non-compliance with the prescribed quality standards to the said contracted project, the building construction enterprise and the unit or individual using the name of the enterprise shall share joint responsibility for compensation.


Article 67 Any contracting unit that subcontracts its contracted project or subcontracts it in violation of the provisions of this Law shall be ordered to make a rectification, its illegal gains shall be confiscated, and a fine imposed, may be ordered to suspend operations for consolidation and lower its human quality grade; where the circumstances are serious, the human quality certificate shall be revoked.
Any contracting unit having committed the illegal act of the preceding paragraph shall share joint responsibility for compensation with the unit accepting subcontract or the subcontracting unit for losses caused by non-compliance with the prescribed quality standards to the subcontracted project or the illegally subcontracted project.


Article 68 Whoever seeks bribes, accepts bribes or gives bribes in issuing contract of a project or contracting a project shall, if a crime has been constituted, be investigated of criminal liability; where a crime has not been constituted, fines shall be imposed separately, property of bribes confiscated, and sanctions imposed on the person-in-charge held directly responsible and other persons directly responsible.
In addition to the penalties prescribed in the preceding paragraph, any contracting unit that gives bribes in the contracting of a project may be ordered to suspend operations for consolidation, lower its human quality grade or its human quality certificate shall be revoked.


Article 69 Any project supervision and control unit that acts in collusion with the construction unit or building construction enterprise, practising fraud and lowering project quality shall be ordered to make a rectification, imposed a fine and its human quality grade shall be lowered or the human quality certificate revoked; where there are illegal gains, they shall be confiscated; where losses have been caused, joint responsibility for compensation shall be borne; where a crime has been constituted, criminal liability shall be investigated according to law.
Any project supervision and control unit that transfers its supervision and control business shall be ordered to make a rectification, confiscated of its illegal gains, may be ordered to suspend operations for consolidation and lower its human quality grade; where the circumstances are serious, the human quality certificate shall be revoked.

Article 70 Any construction of a restoration and rehabilitation project without authorization involving the main part of a building or changes in the weight-bearing structure in violation of the provisions of this Law shall be ordered to make a rectification and imposed a fine; where losses have been caused, liability for compensation shall be borne; where a crime has been constituted, criminal liability shall be investigated according to law.

Article 71 Any building construction enterprise that fails to take measures to eliminate the hidden causes of safety accidents in construction in violation of the provisions of this Law shall be ordered to make a rectification and may be imposed a fine; where the circumstances are serious, it shall be ordered to suspend operations for consolidation and lower its human quality grade or its human quality certificate shall be revoked; where a crime has been constituted, criminal liability shall be investigated according to law.
Managerial staff of a building construction enterprise giving command in contravention of regulations and forcibly ordering workers and staff members to engage in operations in the face of dangers thereby leading to an accident of heavy casualties or causing other serious consequences shall be investigated of the criminal liability according to law.

Article 72 Any construction unit that asks the building design unit or building construction enterprise to lower project quality in contravention of construction project quality and safety standards in violation of the provisions of this Law shall be ordered to make a rectification and may be imposed a fine; where a crime has been constituted, criminal liability shall be investigated according to law.

Article 73 Any building design unit that fails to design in accordance with construction project quality and safety standards shall be ordered to make a rectification and imposed a fine; the unit that has caused an accident in project quality shall be ordered to suspend operations for consolidation, lower its human quality grade or its human quality certificate shall be revoked, the illegal gains confiscated and a fine imposed; where losses have been caused, liability for compensation shall be borne; where a crime has been constituted, criminal liability shall be investigated according to law.

Article 74 Any building construction enterprise that does shoddy work and uses inferior materials in construction, uses substandard building materials, building structural pieces and parts and equipment, or has any other acts of construction not in accordance with the project design drawings or construction technical standards shall be ordered to make a rectification and imposed a fine; where the circumstances are serious, it shall be ordered to suspend operations for consolidation and lower its human quality grade or its human quality certificate shall be revoked; the unit that has caused non-compliance with the prescribed quality standards of the quality of a construction project shall be responsible for its reconstruction and repair and the compensation of the losses caused therefrom; where a crime has been constituted, criminal liability shall be investigated according to law.

Article 75 Any building construction enterprise that fails to fulfill its obligations of warranty or delays to fulfill its obligations of warranty in violation of the provisions of this Law shall be ordered to make a rectification, may be imposed a fine, and shall bear the liability of compensation for the losses caused by such quality flaws as leakage and seepage in roofs and on wall surfaces during the warranty period.

Article 76 The administrative penalties of ordering suspension of operations for consolidation, lowering the human quality grade and revoking the human quality certificate prescribed in this Law shall be decided upon by the human quality certificate issuing organ; other administrative penalties shall be decided upon by the competent department of construction administration or the departments concerned in accordance with laws and the terms of reference prescribed by the State Council.
For any unit whose human quality certificate is revoked pursuant to the provisions of this Law, its business license shall be revoked by the department of industry and commerce administration.

Article 77 Any organ that issues a human quality certificate of a said grade to a unit which does not have the corresponding human quality qualifications in violation of the provisions of this Law shall be ordered by the organ at its next higher level to withdraw the human quality certificate issued and administrative sanctions shall be imposed on the person-in-charge held directly responsible and other persons directly responsible therefor; where a crime has been constituted, criminal liability shall be investigated according to law.

Article 78 Any functionary of the government and its subordinate departments who, in violation of the provisions of this Law, restricts the contract issuing unit in issuing the contract of a project open to invitation to tender for contracting to the designated contracting unit shall be ordered by the organ at the next higher level to make a rectification; where a crime has been constituted, criminal liability shall be investigated in accordance with the law.

Article 79 Any department and its functionaries responsible for the issuance of construction project building permits which issue a building permit to a construction project that fails to meet the requirements for construction, any department and its functionaries responsible for project quality supervision and inspection or acceptance checks on completion of construction that issue a quality qualification document to or complete the acceptance checks as a qualified project of a substandard construction project shall be ordered by the organ at the next higher level to make a rectification, and administrative sanctions shall be imposed on persons held responsible; where a crime has been constituted, criminal liability shall be investigated according to law; where losses have been caused, the said department shall bear corresponding liability of compensation.

Article 80 Any party that suffers from damage due to substandard quality of a construction project within the life expectancy of rational use of the construction project has the right to claim compensation from the person held responsible.

Chapter VIII Supplementary Provisions

Article 81 The provisions of this Law relating to the building permit, building construction enterprise human quality examination and construction project contract issuance and contracting and prohibition of subcontracting as well as construction project supervision and control and construction project safety and quality control apply to construction activities of other specialized construction projects. The specific measures shall be formulated by the State Council.

Article 82 The departments of construction administration and other departments concerned shall not collect fees other than those to be collected pursuant to the relevant provisions of the State Council in the exercise of supervision and control over construction activities.

Article 83 Reference shall be made to this Law in governing construction activities of small housing construction projects determined by people's governments of provinces, autonomous regions and municipalities directly under the Central Government.
Rehabilitation and restoration of memorial buildings and ancient architecture legally verified as protection sites of cultural relics shall be carried out pursuant to the relevant laws on the protection of cultural relics.
This Law shall not apply to construction activities of rescue and disaster relief and other temporary housing construction and peasants' self-constructed low-storey residences.


Article 84 Specific control measures for construction activities of military housing construction projects shall be formulated by the State Council and the Central Military Commission pursuant to this Law.

Article 85 This Law shall enter into force on March 1, 1998.