Law of the People's Republic of China on the Administration of Urban Real Estate (Revised in 2009)

Order of the President of the People's Republic of China No. 18

August 27, 2009

(Adopted at the 8th session of the Standing Committee of the 8th National People's Congress on July 5, 2007; promulgated by the Order of the President [2007] No. 72 on July 5, 2007; amended for the first time according to the Decision on Revising the Law of the People's Republic of China on the Administration of Urban Real Estate adopted at the 29th session of the Standing Committee of the 10th National People's Congress on August 30, 2007; and amended for the second time based on the Decision on Amending Certain Laws which was adopted at the 10th session of the Standing Committee of the 11th National People's Congress on August 27, 2009)

Table of Contents
Chapter I General Provisions
Chapter II Land Used for Real Estate Development
Section 1 Grant of Land Use Rights
Section 2 Allocation of Land Use Rights
Chapter III Real Estate Development
Chapter IV Real Estate Transactions
Section 1 General Rules
Section 2 Assignment of Real Estate
Section 3 Mortgage of Real Estate
Section 4 Leasing of Buildings
Section 5 Intermediary Service Organizations
Chapter V Administration of Real Estate Title Registration
Chapter VI Legal Liability
Chapter VII Supplementary Provisions

Chapter I General Provisions

Article 1 This Law is enacted in order to strengthen the administration of urban real estate, maintain the order of the real estate market, safeguard the lawful rights and interests of owners of real estate rights and promote the healthy development of the real estate industry.

Article 2 Those who, within the scope of state-owned land in urban planning areas of the People's Republic of China (hereinafter referred to as "state-owned land"), obtain land use rights in land for real estate development, engage in real estate development and transactions and implement real estate administration shall be subject to this Law.
For the purposes of this Law, the term "buildings" refers to houses and other buildings and structures built on land.
For the purposes of this Law, the term "real estate development" refers to an act of constructing infrastructure and buildings on the land the state-owned land use rights of which have been acquired in accordance with this Law.
For the purposes of this Law, the term "real estate transactions" includes assignment and mortgage of real estate, and leasing of buildings.

Article 3 The state implements a system for compensation for using state-owned land for a limited term in accordance with the law, except where state-owned land use rights are allocated by the state within the scope prescribed in this Law.

Article 4 The state, based on the social and economic development, supports and develops the construction of residential premises and gradually improves the housing conditions of residents.

Article 5 Owners of real estate rights shall comply with laws and administrative regulations by making tax payment in accordance with the law. The lawful rights and interests of owners of real estate shall be protected by law and may not be infringed by any entity or individual.

Article 6 The state may expropriate the houses of entities and individuals on state-owned land for public interests and make compensation for removal in accordance with the law to protect the lawful rights and interests of the parties subject to the expropriation. Where individuals' residential premises are expropriated, the housing conditions of the parties subject to the expropriation shall also be protected. The specific procedures shall be formulated by the State Council.

Article 7 The administrative department in charge of construction and land administration under the State Council shall, in accordance with the function and power specified by the State Council, perform their own function and closely coordinate with each other to handle the nationwide real estate administration work.
The structural establishment, function and power of real estate or land administration departments of local people's governments at or above the county level shall be determined by the people's governments of provinces, autonomous regions and municipalities directly under the Central Government.

Chapter II Land Used for Real Estate Development

Section 1 Grant of Land Use Rights

Article 8 The term "grant of land use rights" refers to the an act where the State grants to a land user state-owned land use rights (hereinafter referred to as "land use rights") for a specific number of years and the land user pays to the state the fees for the grant of land use rights.

Article 9 The use rights of collectively-owned land in urban planning areas may be granted with compensation only after such land is converted into state-owned land through legal expropriation.


Article 10 The grant of land use rights must comply with general plans for land utilization, urban plans, and annual plans for land for construction.

Article 11 Local people's governments at or above the county level that grant land use rights for real estate development must, in accordance with the control indicators issued by the people's governments at or above the provincial level, formulate the annual proposal on the total area of land the use rights of which may be granted, and submit such proposal to the State Council or the people's governments at the provincial level for approval in accordance with the provisions of the State Council.

Article 12 The grant of land use rights shall be conducted by the people's government of a city or county in a planned and systematic manner. The land administration department of the people's government of a city or county shall, in conjunction with the departments of urban planning, construction and real estate administration, formulate a plan for the grant, purposes, term and other conditions of each lot of land. Such plan shall be submitted in accordance with the provisions of the State Council to the people's government with approval authority for approval before be implemented by the land administration department of the people's government of a city or county.
The limit of the authority provided in the preceding paragraph which is exercised by the people's government of a county within a municipality directly under the Central Government and its relevant departments shall be prescribed by the people's government of the municipality directly under the Central Government.

Article 13 Land use rights may be granted by means of auction, bid invitation or bilateral agreement.
With regard to land for commerce, tourism, entertainment or construction of luxury residential premises, if conditions permit, auction or bid invitation must be adopted; if conditions do not permit, auction or bid invitation may not be adopted, and bilateral agreement may be adopted.
The fee for the grant of land use rights through bilateral agreement may not be less than the minimum price as determined in accordance with the provisions of the state.

Article 14 The maximum term of the grant of land use rights shall be prescribed by the State Council.

Article 15 With regard to the grant of land use rights, a written grant contract shall be concluded.
A contract for the grant of land use rights shall be concluded between the land administration department of the people's government of a city or county and a land user.

Article 16 A land user must pay the fee for the grant of land use rights in accordance with the grant contract; in the event of failure to pay such fee in accordance with the grant contract, the relevant land administration department has the right to rescind the contract and may also claim for liquidated damages.

Article 17 Where a land user pays the fee for the grant of land use rights in accordance with the grant contract, the land administration department of the people's government of a city or county must, in accordance with the grant contract, provide the land to be granted; in the event of failure to provide such land in accordance with the grant contract, the land user has the right to rescind the contract, the land administration department shall refund the fee for the grant of land use rights, and the land user may also claim for liquidated damages.

Article 18 Where a land user needs to change the purposes of land as stipulated in a contract for the grant of land use rights, the land user must obtain the consent of the grantor and the approval of the administrative department in charge of urban planning of the people's government of a city or county, and conclude an agreement on the change of the contract for the grant of land use rights or a new contract for the grant of land use rights, and the fee for the grant of land use rights shall be adjusted accordingly.

Article 19 Fees for the grant of land use rights shall be submitted to the finance authorities in full and included in budget for the construction of urban infrastructure and the land development. Specific measures for the submission and use of such fees shall be prescribed by the State Council.

Article 20 Land use rights acquired by a land user in accordance with the law shall not be recovered by the state prior to the expiry of the term of use stipulated in a grant contract; Under special circumstances, land use rights may be recovered in the public interest in advance in accordance with legal procedures, and appropriate compensation shall be made on the basis of the actual term for which the land user has used the land and the actual land development.

Article 21 Land use rights are terminated as a result of the vanishing of land.

Article 22 Where a land user needs to continue to use the piece of land upon expiry of the term of use stipulated in the contract for the grant of land use rights, the land user shall apply for extension no later than one year prior to expiry of the term. Such application shall be approved, unless the piece of land needs to be recovered in the public interest. Where extension of the term is approved, a new contract for the grant of land use rights shall be concluded, and a fee for the grant of land use rights shall be paid as required.
Where the term of use as stipulated in the contract for the grant of land use rights expires and a land user fails to apply for extension of the term of use or an application for such extension which has been filed is not approved pursuant to the preceding paragraph, such land use rights may be recovered by the state without compensation.

Section 2 Allocation of Land Use Rights

Article 23 The term "allocation of land use rights" refers to an act where a piece of land is handed over to a land user for use after he has paid compensation or resettlement fees, etc., or where land use rights are handed over to a land user for use without compensation, with the approval of a people's government at or above the county level.
Land use rights acquired through allocation in accordance with this Law shall not be subject to any restriction on the term of use, unless otherwise provided by laws or administrative regulations.

Article 24 Land use rights for the following pieces of construction land which are truly needed may be allocated upon approval by people's governments at or above the county level in accordance with the law:
1. Land for use by state authorities or for military purposes;
2. Land for urban infrastructure and public welfare;
3. Land for key projects such as energy, communications and water conservancy projects with support by the state; and
4. Land for other purposes as prescribed by laws and administrative regulations.

Chapter III Real Estate Development

Article 25 Real estate development must be in strict accordance with urban planning, and be subject to overall planning, rational distribution, comprehensive development and construction of ancillary infrastructure according to the principle of unification of economic, social and environmental benefits.

Article 26 Where real estate development is carried out on land the use rights of which were acquired by means of grant, the land must be developed in line with the purposes of the land and the deadline for commencement of construction as stipulated in the contract for the grant of land use rights. Where construction does not commence within one year of commencement of construction as stipulated in the contract, an idle land fee may be charged at a rate of not more than 20% of the fee for the grant of land use rights.
Where construction does not commence within two years, land use rights may be recovered without compensation, except where the commencement of construction is delayed due to force majeure, an act of the government or relevant government departments, or preliminary work necessary for the commencement of construction.

Article 27 The design and construction of real estate development projects must comply with the relevant standards and guidelines of the state.
The completed real estate development projects may be delivered for use only after examination and acceptance as satisfactory.

Article 28 Land use rights acquired in accordance with the law may be used as consideration for equity to engage in real estate development in the form of equity or contractual joint venture in accordance with this Law and relevant laws and administrative regulations.

Article 29 The state shall adopt preferential measures with respect to taxation, etc., to encourage and support real estate development enterprises in the development and construction of residential buildings.

Article 30 A real estate development enterprise shall be an enterprise that engages in real estate development and business for profit making. To establish a real estate development enterprise, the following conditions must be fulfilled:
1. have its own name and organizational structure;
2. have a fixed business premises;
3. have registered capital in compliance with the provisions of the State Council;
4. have a sufficient number of professional technical personnel; and
5. other conditions prescribed by laws and administrative regulations.
To establish a real estate development enterprise, an application for registration of establishment shall be submitted to the administration for industry and commerce. The administration for industry and commerce shall grant registration and business licenses to enterprises that fulfill the conditions stipulated in this Law. Enterprises that fail to meet the conditions prescribed in this Law shall not be registered.
Where a limited liability company or a joint-stock company is established to engage in real estate development business, the relevant provisions of the Company Law of the People's Republic of China shall also be implemented.
A real estate development enterprise shall, within one month of obtaining its business license, file a record with the departments authorized by the local people's governments at or above the county level at the places where registration authorities are located.

Article 31 The ratio of registered capital to the total investment of a real estate development enterprise shall comply with relevant state provisions.
Where a real estate development enterprise develops real estate in phases, the investment in each phase shall be commensurate with the scale of the project. The funds for each phase shall be contributed on schedule for project construction in accordance with the contract for the grant of land use rights.

Chapter IV Real Estate Transactions

Section 1 General Rules

Article 32 When real estate is assigned or mortgaged, the ownership of buildings and the use rights of the land occupied by such buildings shall be assigned or mortgaged at the same time.

Article 33 Standard land prices, determined land prices and replacement prices for all kinds of buildings shall be determined and announced on a regular basis. Specific measures shall be formulated by the State Council.

Article 34 The state shall implement a real estate value appraisal system.
The real estate value shall be appraised under the principles of fairness, equality and openness in accordance with technical standards and appraisal procedures laid down by the state, on the basis of standard land prices, determined land prices and replacement prices for all kinds of buildings and with reference to local market prices.

Article 35 The state shall implement a transaction price declaration system for real estate.
A real estate owner that assigns his real estate shall truthfully declare the transaction price to the department authorized by the local people's government at or above the county level. He may not withhold declaration or make an inaccurate declaration.

Article 36 The interested parties of the assignment or mortgage of real estate shall handle title registration procedures in accordance with Chapter Five hereof.

Section 2 Assignment of Real Estate

Article 37 The term "assignment of real estate" refers to an act where a real estate owner transfers his real estate to another party by means of sale, gift or other legitimate methods.

Article 38 None of the following real estate may be assigned:
1. real estate the land use rights of which were acquired by means of grant where the assignment of such real estate fails to fulfill the conditions prescribed in Article 39 hereof;
2. real estate which was sealed up or the rights to which were restricted in any other form by a ruling or decision of judicial or administrative authorities in accordance with the law;
3. real estate the land use rights of which have been recovered in accordance with the law;
4. commonly-owned real estate which is assigned without the written consent of the other common owners;
5. real estate the title to which is under dispute;
6. real estate that has not been registered and a title certificate of which has not been obtained in accordance with the law; and
7. other circumstances in which assignment is prohibited under laws or administrative regulations.

Article 39 Where land use rights are acquired by means of grant, the following conditions must be fulfilled when real estate is assigned:
1. the fee for the grant of land use rights has been paid in full in accordance with the grant contract and a land use right certificate has been obtained; and
2. investment or development has been made in accordance with the grant contract. Where the investment or development involves a building construction project, more than 25% of the total investment or development shall have been completed; where the investment or development involves a large plot of land, the conditions for the use of land for industrial or other construction purposes shall have been created.
Where buildings have been completed when real estate is assigned, a real estate ownership certificate shall also be obtained.

Article 40 Where land use rights are acquired through allocation, the assignment of real estate shall be reported to a people's government with the approval authority for examination and approval in accordance with the provisions of the State Council. Where such assignment is approved by a people's government with the approval authority, the assignee shall handle the procedures for the grant of land use rights and pay a fee for the grant of land use rights in accordance with relevant provisions of the state.
Where land use rights are acquired through allocation, a people's government with the approval authority may, when the assignment of real estate is reported for approval, decide not to handle the procedures for the grant of land use rights in accordance with the provisions of the State Council. The assignor shall submit the land proceeds from the assignment of real estate to the state or deal with such proceeds in accordance with the provisions of the State Council.

Article 41 A written assignment contract shall be concluded for the assignment of real estate. The method of acquiring land use rights shall be specified in such contract.

Article 42 When real estate is assigned, the rights and obligations specified in a contract for the grant of land use rights shall be transferred together with the real estate.

Article 43 Where land use rights are acquired by means of grant, the term of such land use rights after real estate is assigned shall be the remaining term after the period for which land has been used by the original land user is deducted from the term stipulated in the original contract for the grant of land use rights.

Article 44 Where land use rights are acquired by means of grant, an assignee that changes the purposes of land as stipulated in the original contract for the grant of land use rights after real estate is assigned must obtain the consent of the original grantor and the administrative department in charge of urban planning of the people's government of a city or county, and an agreement to change the agreement or a new contract shall be concluded and the fee for the grant of land use rights shall be adjusted accordingly.

Article 45 The following conditions shall be fulfilled for the pre-sale of commodity buildings:
1. The fee for the grant of land use rights has been paid in full and a land use right certificate has been obtained;
2. A construction project planning permit has been obtained;
3. On the basis of the commodity buildings provided for pre-sale, the funds to be contributed for the development or construction project have reached more than 25% of the total investment in the construction project. Construction progress, date of completion and delivery shall have been determined; and
4. Pre-sale registration shall have been handled with the real estate administration department of the people's government above the county level and a commodity building pre-sale permit has been obtained.
The parties that pre-sell commodity buildings shall submit pre-sale contracts to the real estate and land administration departments of the people's governments above the county level for registration and record filing in accordance with relevant state provisions.
Proceeds from the pre-sale of commodity buildings must be used in the relevant construction projects.

Article 46 Where commodity buildings are pre-sold, issues concerning the re-assignment of such commodity buildings by purchasers of such buildings prior to completion shall be governed by the State Council.

Section 3 Mortgage of Real Estate

Article 47 The term "mortgage of real estate" shall refer to an act where a mortgagor provides a mortgagee with a security for the performance of his obligation by means of his lawful real estate without transferring the ownership of such estate. When an obligor fails to perform his obligation, a mortgagee has the right to receive compensation from the proceeds of an auction of the mortgaged real estate in priority in accordance with the law.

Article 48 Mortgages may be created over the ownership of buildings that have been acquired in accordance with the law, together with the use rights of land occupied by such buildings.
Mortgages may be created over land use rights that were acquired by means of grant.

Article 49 The mortgage of real estate shall be handled on the strength of land use right certificates and building ownership certificates.

Article 50 A written mortgage contract shall be concluded between a mortgagor and a mortgagee for the mortgage of real estate.

Article 51 Where the mortgage of real estate is created over land use rights that were acquired through allocation and such real estate is subsequently auctioned in accordance with the law, the mortgagee may receive compensation in priority after an amount equivalent to the payable fee for the grant of land use rights has been paid from the proceeds of the auction.

Article 52 After a real estate mortgage contract has been concluded, additional buildings on land shall not belong to mortgaged property. When mortgaged real estate needs to be auctioned, such new buildings may be auctioned together with mortgaged property in accordance with the law. However, the mortgagee shall not have the right to receive compensation from the proceeds of the auction of such new buildings in priority.

Section 4 Leasing of Buildings

Article 53 The term "leasing of buildings" shall refer to an act where an owner of a building as a lessor leases his building to a lessee for use, and rent is paid to the lessor by the lessee.

Article 54 A written lease contract shall be concluded between the lessor and the lessee for leasing a building and shall agree on the terms and conditions such as the term, purpose and price of leasing and liability for maintenance and repair, etc. as well as other rights and obligations of both parties. The contract shall be filed for registration and record with the real estate administration department.

Article 55 Leasing of residential buildings shall be subject to the leasing policies prescribed by the state and the people's governments of cities where such buildings are located. Where buildings are to be leased for production and business activities, the parties to the lease shall negotiate with each other and decide on rent and other leasing terms.

Article 56 Where an owner of a building leases out a building on state-owned land the use rights of which were acquired through allocation for profit, he shall submit land proceeds included in the rent to the state. Specific measures shall be prescribed by the State Council.

Section 5 Intermediary Service Organizations

Article 57 Real estate intermediary service organizations shall include real estate consultancy institutions, real estate price appraisal institutions and real estate brokerages, etc.

Article 58 A real estate intermediary service organization shall meet the following conditions:
1. have its own name and organizational structure;
2. have a fixed service premises;
3. have the necessary property and operating funds;
4. have a sufficient number of professional personnel; and
5. other conditions prescribed by laws and administrative regulations.
To establish a real estate intermediary service organization, an application for registration of establishment shall be submitted to the administration for industry and commerce, and business may only commence after a business license has been obtained.

Article 59 The state shall implement a system for certification of the qualifications of real estate appraisers.

Chapter 5 Administration of Registration of Title to Real Estate

Article 60 The state shall implement a registration and licensing system for land use rights and building ownership.

Article 61 Where land use rights are acquired by means of grant or allocation, an application for registration shall be submitted to the land administration department of the local people's government above the county level. Upon verification by the land administration department of the local people's government above the county level, a land use right certificate shall be issued by the people's government at the same level.
Where buildings have been built on land for real estate development in accordance with the law, an application for registration shall be submitted to the real estate administration department of the local people's government above the county level on the strength of the land use right certificate. A building ownership certificate shall be issued by the real estate administration department of the local people's government above the county level upon verification.
When real estate is assigned or changed, an application for registration of change in real estate shall be submitted to the real estate administration department of the local people's government above the county level, and an application for registration of change in land use rights shall be submitted to the land administration department of the local people's government at the same level on the strength of the building ownership certificates after change. Upon verification by the land administration department of the local people's government at the same level, the land use right certificate shall be replaced or changed by the people's government at the same level.
Unless otherwise provided by laws, matters shall be handled in accordance with the provisions of the relevant laws.

Article 62 When real estate is mortgaged, mortgage registration shall be handled with the departments authorized by the local people's government above the county level.
Where land use rights and ownership of buildings are acquired as a result of the disposal of mortgaged real estate, transfer registration shall be handled in accordance with this Chapter.

Article 63 A department of a local people's government above the county level uniformly responsible for the administration of real estate and land may, upon confirmation by the people's governments of the province, autonomous region or municipality directly under the Central Government, prepare and issue consolidated real estate title certificates and respectively include the confirmation and change of building ownership and use rights of the land occupied by such buildings into the real estate title certificates in accordance with Article 61 hereof.

Chapter VI Legal Liability

Article 64 Where Article 11 or 12 hereof is violated by approving without authorization the grant of, or by granting without authorization, use rights of land to be used for real estate development, administrative penalties shall be imposed on relevant responsible personnel by a higher authority or by the work units to which such personnel belong.

Article 65 Where Article 30 hereof is violated by engaging in real estate development business without having obtained a business license, the administration for industry and commerce of the people's government above the county level shall order halt of real estate development activities and confiscate illegal income, and may also impose a fine.

Article 66 Where land use rights are assigned in violation of Paragraph 1 of Article 39 hereof, the land administration department of the people's government above the county level shall confiscate illegal income and may also impose a fine.

Article 67 Where real estate is assigned in violation of Paragraph 1 of Article 40 hereof, the land administration department of the people's government above the county level shall order payment of fees for the grant of land use rights and confiscate illegal income and may also impose a fine.

Article 68 Where commodity buildings are pre-sold in violation of Paragraph 1 of Article 45 hereof, the real estate administration department of the people's government above the county level shall order halt of the pre-sale activities, confiscate illegal income and may also impose a fine.

Article 69 Where Article 58 hereof is violated by engaging in the business of real estate intermediary services without having obtained a business license, the administration for industry and commerce of the people's government above the county level shall order halt of such business activities of real estate intermediary service and confiscate illegal income and may also impose a fine.

Article 70 Where fees are charged to a real estate development enterprise without any basis in laws or regulations, the authorities at a higher level shall order refund of the payments collected. Where the circumstances are serious, administrative penalties shall be imposed on the directly responsible personnel by the authorities at the higher level or by the work units to which such personnel belong.

Article 71 Where dereliction of duty or abuse of power committed by working personnel of real estate or land administration departments constitutes an offence, criminal liability shall be pursued in accordance with the law. Where no offence is constituted, administrative penalties shall be imposed.
Any staff member of a real estate administrative authority or land administrative authority who solicits property from other people or illegally accepts other people's property to further their interests by taking advantage of his position shall, where the circumstances constitute a crime, be subject to criminal prosecution; where no crime is committed, such staff member shall be subject to administrative sanctions.


Chapter VII Supplementary Provisions

Article 72 Acquisition of the use rights of land for real estate development on state-owned land outside urban planning areas, engagement in real estate development and transactions on such land as well as implementation of real estate administration for such land shall be handled with reference to this Law.

Article 73 This Law shall go into effect as of January 1, 1995.