(4) the hiring or dismissal of the property management department or other directors; The mortgaged property is converted into money or sold according to its market price. If a rights holder wants to protect his property, he can evoke certain procedural guarantees, including: In the time of Deng Xiaoping, a fundamental legal source of the regime of property and property rights in the PRC was contained in the Constitution of the PRC, which was promulgated in 1982. [6] The 1982 constitution provided for “socialist public ownership” of the means of production, which takes two forms: state ownership and collective ownership. In 2004, the Fourth Amendment to the Constitution was made. Article 13 of the Constitution states: “The legitimate private property of citizens is inviolable. The country protects the private property and inheritance rights of citizens in accordance with the law. Land may, as required by the public interest, expropriate or confiscate the private property of citizens and pay compensation for them. So it turns out that China`s property laws have undergone developments. The most recent development would be the adoption of the Property Law in March 2007 (after 14 years of debate), which is considered one of the most important fundamental elements of the development of civil law in the PRC. Article 191 If, with the consent of the hypothecary creditor, a hypothecary debtor transfers the mortgaged assets during the term of the mortgage, the proceeds obtained by the hypothecary debtor from the transfer of the mortgaged assets shall be used in advance to settle the claim secured by the hypothecary creditor or deposited with a third party. If the proceeds of the transfer exceed the secured claim, the balance is transferred to the mortgage debtor; If the proceeds are not sufficient to cover the claim, the uncovered portion is paid by the debtor. Even before the recent turbulence surrounding Evergrande and other developers, the Chinese government had been worried for several years about a potentially overheated real estate market.

In this management briefing, we provide some background information on the subject and present one of the most effective policy measures introduced to date to reduce risk: the Three Red Lines policy. § 5 The categories and content of the right to property are regulated by law. The property of another person mentioned in the previous paragraph is the property served, and his own property is the dominant asset. § 6 The establishment, modification, transfer or expiry of the right of ownership of the land must be registered in accordance with the legal provisions. The right of ownership of movable property arises or is transferred with delivery in accordance with the legal provisions. The danger has become clearer since September 2020, when industry giant China Evergrande Group began showing signs of a liquidity crisis. The world`s most indebted real estate developer finally defaulted at the end of 2021 and is now facing massive restructuring. By early 2022, distress was still spreading to the country`s $870 billion offshore bond market as more real estate companies ran out of payments and record refinancing costs effectively prevented them from renewing their loans. Section 246 Before the scope, powers and measures for the uniform registration of real property are determined by statutes or by-laws, they may be determined by local by-laws in accordance with the relevant provisions of this Act. For the purposes of this Act, things include immovable property and movable property. To the extent that the laws provide that the rights are to be considered as the object of the right of ownership, the provisions of those laws shall prevail. (5) property that is legally sealed, seized or held; and (3) the name, quantity, quality, conditions, location or allocation of ownership or right to use the pledged property; And To curb China`s free-roaming real estate sector, policymakers have introduced debt measures in 2020 that set limits on developers looking to borrow more.

Dubbed the “three red lines” by state media, they have become a game changer for an industry that accounts for about a quarter of economic output. But as more and more real estate companies sink into a worrying liquidity crisis, regulators are now changing the rules to achieve a soft landing. Article 219 If the debtor repays the debts or if the freight forwarder pays in advance the debts guaranteed by him, the pledge shall return the pledged assets. #1 To control property prices: The Chinese government is aware of the significant increase in property prices that has taken place over the past 15 to 20 years, making real estate unaffordable for millions of people. The use of the property was generally divided into topsoil (田皮) and underground (田骨) rights. [1] Landowners paid taxes to the government in exchange for land ownership rights (known as underground rights), but were not allowed to actively use the land. Landowners, in turn, gather who used the land for agricultural purposes (topsoil rights). There are still ongoing debates about whether Imperial China actually had private property rights. Some argue that the imperial state had limited control over land ownership, while others argue that imperial China acted as a state controlling everything. The bottom line, however, was that the entire imperial period was seen as a period of stagnation, in which “the system. has remained fundamentally the same throughout imperial history.” [2] In fact, property rights were not structured during the imperial period. The imperial period depended on time and space and was affected by wars, uprisings and natural disasters.

At those times, there were frequent changes of ownership as abandoned land was reclaimed after previous owners fled or died. [3] During the Qing Dynasty (1644-1911), some land titles took place, but not systematically or nationally, and historical titles have been passed down to the present day. [4]: 67 Newly accumulated land along rivers, streams, and other bodies of water – so-called riparian rights – have been clearly designated as state property, and the Qing government has repeatedly pointed this out in imperial edicts. [4]: 100 Article 20 If the person concerned intends to sign a contract for the purchase or sale of a house or other property right, he may, in accordance with the agreements, apply in advance to the registration authority in order to ensure the realization of his right of ownership in the future. If, after prior registration, such immovable property is sold without the consent of the creditor previously registered for registration, the right of ownership of such property shall terminate. § 14 If the establishment, modification, transfer and extinction of the right of ownership of the land is to be registered in accordance with the legal provisions, it shall take effect at the time it is entered in the Register of Immovable Property. § 215 The secured creditor is obliged to keep the pledged assets. If the pledged item is damaged, destroyed or lost due to improper storage, the secured creditor will be liable for the damages. Article 17 The certificate of transfer of ownership of immovable property is proof that the creditor is entitled to the right of ownership of immovable property. The elements entered in the certificate of transfer of ownership of the immovable property must correspond to those entered in the register of immovable property; and in the event of a discrepancy, what is recorded in the real property register is used as a standard, unless there is evidence that there are errors in what is entered in the immovable property register. The following description refers to the legal provisions after the reform and should not be confused with the nationalization of property before 1978.

An investor wishing to invest or develop land or real estate in China must take into account China`s property laws, in particular the property right introduced in 2007[7], which for the first time protects the interests of private investors to the same extent as national interests. [8] In addition to civil liability for infringement of the right to property, a person who also violates the by-laws is liable under the law; and if there is a criminal offence, he will be investigated under the law for criminal responsibility. In recent months, China has implemented new measures to tighten the credit environment and regulate the heated real estate market. In December 2020, China`s central bank issued a regulation limiting banks` home loans to control real estate investment and curb speculation on property prices. Divided into five categories, banks are subject to different limits on their loans and have a 4-year grace period to meet regulatory requirements. (3) the name, quantity, quality and conditions of the pledged property; Article 243 Where immovable or movable property belongs to another person, the creditor may require that person to return the immovable property and the fruits derived therefrom; However, if the creditor is in good faith, he must reimburse the owner for the costs necessary for the maintenance of the property. If a debtor uses its own assets as a mortgage, if a mortgagee waives its mortgage interest or places it in the mortgage interest order, or modifies its mortgage interest, the other guarantors are exempt from the guarantee to the extent that the mortgagee loses its rights and interests with respect to the primacy of repayment; unless the guarantors mentioned are still required to provide a guarantee. Article 211 Before the debts are due, the secured creditor may not enter into an agreement with the pledge that ownership of the pledged assets shall be transferred to the pledge if the debtor is in default. Article 236 The secured creditor and the debtor shall reach an agreement on the period within which the debtor must settle the debts after the assets have been retained.