Property

Controversy on Land-use Rights in China

Earlier in April, some Wenzhou home-owners were banned from selling their homes in the secondary market as the land-use rights of their properties had expired. The Wenzhou government was reported to have billed the home-owners around RMB 300,000, one-third of the value of their homes, to extend their land-use rights. Home-owners across the country are shocked by the news for they fear the large sum they have paid for their homes has only made them long-term tenants of the properties. Wenzhou’s city government has dismissed the news about the renewal fees as a misunderstanding but has yet to disclose how land-use rights are to be renewed.

The land-use rights period in cities of mainland China is topped at 70 years, most commonly granted for 40, 50 or 70 years, with some granted for 20 years only. According to section 149 of the Property Law, land-use rights contracts for residential plots can be automatically renewed upon expiry. Yet, no specific rules or regulations were mentioned as to how the contracts are “automatically renewed”.

As a matter of fact, there have already been more than a few cases of land-use rights renewal in China. The Shenzhen government is said to have handled around 719 cases of land-use right renewal in the Luohu and Futian districts. For instance, when the land-use rights of some of the units of International Commercial Building in Luohu expired in 2001, the owners were billed 35% of the marked price of the property for the renewal of its land-use rights. On the other hand, the owners of a residential building in Gintaoyuan of Nanshan district was notified of the expiry of their land-use rights in 2011, which was then said to have been automatically renewed later according to the Property Law. Yet, it is unknown whether the renewal required a payment.

A member of the drafting committee of the 2007 Property Law claims that the term “automatically renewed” only means that property owners do not have to apply for renewals at government departments in person, and although the issues on the charges required was greatly disputed during the drafting process, a decision had not been made even after the Property Law was in place. The drafting members have decided to leave the matter for later discussion.

He continued to suggest that the decisions on matters regarding charges should only be made by the National People's Congress (NPC) or by the State Council under the NPC’s authorisation and should not be decided differently by local governments. The Department of Land and Resources of Guangdong Province has also commented on the Wenzhou issue and stated that related matters in the Guangdong Province would be handled according to the policies made by the central government.