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Migration Review Tribunal

MRT RESEARCH RESPONSE

Research Response Number: CHN35368 Country: Date: 01 September 2009

Keywords: China – Purchase and registration of property in China – Rules for unmarried couples – De facto

Questions

1. In the People's Republic of China, is it permitted for two people to jointly own a house if they are not married and have their names registered on a for a house?

RESPONSE

1. In the People's Republic of China, is it permitted for two people to jointly own a house if they are not married and have their names registered on a title for a house?

Executive Summary No sources have been located that definitively state that an unmarried couple cannot purchase and register property in the People’s Republic of China. Sources do indicate that unmarried cohabitation is technically unlawful in China, however current property and title registration procedures do not state that proof of marriage is required.

No sources have been located that provide information on the rules governing the registration of property in any province or municipality of China during the 1990s. However, sources do indicate that rules governing the registration of property in China since the 1970s have varied from province to province.

Sources state that PRC does not recognise de facto or common law marriage, however in many parts of China up to 80 percent of are unregistered and therefore technically unlawful.

Sources indicate that since the 1990s, people in China have been encouraged to purchase their own homes in order to reduce the burden on the state and state-owned enterprises to provide and maintain accommodation. The same sources also indicate that both the state and state-owned enterprises have provided an allowance to married couples (via the husband) to help purchase property or to use for rental accommodation. Sources do not indicate whether or not unmarried couples or couples in unregistered marriages are entitled to this allowance.

This response is organised as follows: 1. The Property Rights Law of China 2007 2. Registration of Property Procedures 3. De Facto Marriage in China 4. The Promotion of Private Property in China

The Property Rights Law of China 2007 In March 2007 a new national Property Rights Law of China was promulgated and came into effect in October of that year. Joint and co-ownership is permissible under the Act and none of the 247 articles in the Act prohibit joint or co-ownership of real estate by unmarried couples. Indeed, marital status is not mentioned at all in the new law (‘Property Rights Law of the People's Republic of China’ 2007, Lehman, Lee & Xu website http://www.lehmanlaw.com/resource-centre/laws-and-regulations/general/property-rights- law-of-the-peoples-republic-of-china.html – Accessed 25 August 2009 – Attachment 1).

Registration of Property Procedures The following source on China’s 2007 property law was produced by two property law professors and posted on the law blog site, Law Professors Blog. The following extract discusses the complexities of the property title registration process in the People’s Republic of China:

2: Registration of Ownership: Registration of property ownership has been part of the law of China for two decades. Registration occurs in the public registration office in the area in which the property is located. The Civil Law views land and the buildings on that land as separate items of ownership, so Chinese law has required law separate registration, and in many areas this meant registration in different offices. Further, there was overlapping jurisdiction as to registration of land use rights generally, and it was possible for different public offices to have different registered claims for the same property. As the registration offices have become more sophisticated and practical, many of these problems have gone away, particularly in larger . But persons dealing in relatively primitive cities or rural areas must be careful to become aware of the property method for registration of rights.

Registration is a complex and time consuming practice, as the registry office researches all available records concerning the property in question. Although local law often provides for prompt issuance of certificates of land use rights, it has not been unusual for home purchasers in Beijing to wait for years to receive certificates of their registered rights, particularly their rights in the land. This is due in part to the glut of work, and may also be due to a “slow down” initiated by the seller/developers who have not yet completed payment for their own land use rights and are pushing the final retransfer, when their own payment will be necessary, as far into the future as humanly possible. Deferring final payments for the developer’s land use right while the developer is building and even marketing units built on the land likely has been improper, but nevertheless reports are that the practice has been common (Randolph, P. & Pierson, W. 2007, ‘The New Chinese Basic Law of Property: A Real Estate Practitioner’s Perspective’, Law Professors Blog website, p.5 http://lawprofessors.typepad.com/china_law_prof_blog/files/basicpropertylaw_comments.pdf – Accessed 26 August 2009 – Attachment 2).

The following source is a commercial advice document on buying property in China, published by Doing Business. The following extract provides a general guide to the procedures for registering property title in China. It does not mention the need to prove marital status:

Procedure 1. Parties obtain application and notifications sheet, and pay fees Time to complete: 1 day Cost to complete: Deed tax: 3% of property value to be paid by the buyer Stamp duty: 0.05％ of property value paid each by buyer and seller (total 0.1%) Comment: The parties visit the House and Land Resources Administration Centre to pick up an application and a notification sheet that gives instructions on how to proceed. The parties fill the application on the spot, impose their company seals on it, and present it to pay the applicable taxes at the Finance Window. Some property registry offices in Shanghai do not collect stamp duty from companies. In such a case, both the seller and the buyer will have to pay stamp duty to the tax authorities with jurisdiction over them. Procedure 2. Parties file the application at the House and Land Resources Administration Centre Time to complete: up to 20 business days Cost to complete: no cost Comment: Private ownership of land is not permitted in China; all land is subject to either State ownership or collective ownership. However, a private party is entitled to obtain the right to use the land. Regarding the State-owned land, there are two types of land use rights, the “granted land use right” and the “allocated land use right”. The difference is that the granted land use right is limited in time against payment, whereas the allocated land use right is usually given for free with no time limit, but for specific purposes only. A private party also may transfer to another private party the granted land use right. The allocated land use right cannot be commercially transferable before being converted into granted land use right. In this case, the land is used for commercial purposes. Usually land for commercial use is owned by the State, and the relevant land use right is the State-owned land use right. As to the term of the land use right in this case the buyer, who will use the land for commercial purposes, will only get 40 years as the initial term (as maximum unless it extends the granted land use rights at the end of the 40 year period by paying to the State the additional land price) minus the period from the granting date from the State to the date of the transfer to ABC.

There is a standard form sale and purchase agreement formulated by government authorities and is required to be used in practice. The contents of the standard form agreement may be revised or supplemented by way of a supplemental agreement attached to the standard form agreement as appendix. The sale and purchase agreement needs to be printed at designated printers. Such printers are only available at licensed real estate brokers and the property registry offices.

Property Ownership Certificate and Land Use Right Certificate are combined into one certificate in Shanghai, which is called "Real Estate Title Certificate".

The documentation shall include: The seller and the buyer should submit one original real estate sales and purchase contract (duly signed) and a writing representation of the seller and buyer regarding the title transfer. There is no standard form of the contract (except for newly constructed commercial residential properties) nor the participation of a lawyer/notary is required.

The seller should submit the below documents: (i) The original copy of the Property Ownership Certificate and Land Use Right Certificate "Real Estate Title Certificate" (already in possession of the seller); (ii) The original copy of the Business License or Organization Code Certificate; (iii) The original copy of the Board resolution approving the sales of the real estate; (iv) District Branch-dedicated Form for proof of legal representative’s authority, and photocopy of the identification card (or passport) of the legal representative; and (v) Photocopy of the identification card of the individual authorized to handle the actual procedures, and the original copy of Power of Attorney.

The buyer should submit the below documents: (i) Real Estate Ownership Registration Form; (ii) The original copy of the Business License or Organization Code Certificate; (iii) The original copy of the Board resolution approving the purchase of the real estate; (iv) District Branch-dedicated Form for proof of legal representative’s authority, and photocopy of the identification card (or passport) of the legal representative; And (v) Photocopy of the identification card of the individual authorized to handle the actual procedures, and the original copy of Power of Attorney. Procedure 3. Parties pay registration fee Time to complete: 1 day Cost to complete: CNY 550 Comment: The registration fee is paid at a separate window from that where one picks up the new title certificate. The Ministry of Finance and State Development and Reform Commission issued a notice, effective from May 1st 2008, to standardize the registration fees for real estate property. The registration fee is set at CNY 80 for one piece of residential housing and CNY 550 for one piece of non-residential building. The registration fee is decided by piece, not value of the property. Procedure 4. Parties pick up new title certificate Time to complete: 1 day Cost to complete: no cost Comment: After paying the registration fee, along with the receipt, the buyer obtains the new Real Estate Title Certificate. In Shanghai the former Property Ownership Certificate and the Land Use Right Certificate have been combined into one certificate, the Real Estate Title Certificate. The title transfer procedure will be complete upon the issuance of the new Real Estate Title Certificate, and the certificate holder thereby becomes the official owner of the premises (‘Registering Property in China’ 2009, Doing Business website http://www.doingbusiness.org/Exploretopics/registeringproperty/Details.aspx?economyid=42 – Accessed 25 August 2009 – Attachment 3).

A 2006 summary on the International Quality and Productivity website states that the rules and procedures of property registration vary in each province/municipality in China:

Different Chinese provinces and municipalities operate different systems of land registration. In general, the granting of land use rights and transfers of those rights are registered with the land bureau. But while, in theory, the register is searchable by the public, in practice it is often not possible to gather sufficient background detail to make a full assessment. The state does not guarantee that the information kept on the register is accurate or complete, nor does it provide compensation in the event of title defects or fraud (Cooke, A. 2006, ‘Property Title Issues in Asia’, International Quality & Productivity website, p.2 http://www.iqpc.com/uploadedFiles/Topic/Real_Estate_IQ/Assets/5.pdf – Accessed 25 August 2009 – Attachment 4).

De Facto Marriage In an article in the Stanford Journal of Eastern Affairs, it is stated that the PRC does not legally recognise de facto marriage. Up to eighty percent of marriages are unregistered in some regions of China:

…the PRC Marriage Regulations require registration in order for a marriage to be official. In practice, however, many PRC couples avoid registration not only as a result of traditional customs, but also because of the restrictive birth control policy. To avoid such reproduction restrictions, many intentionally evade marriage registration. Indeed, in certain regions of rural China, as many as 80 percent of “unions” are unregistered. Whether to recognize de facto marriage or adhere to the principle of marriage has thus become a dilemma for PRC officials and judges (Yin-Ching, C. 2002, ‘Civil Law Development: China and ’, p.11, Stanford University website, http://www.stanford.edu/group/sjeaa/journal2/china1.pdf – Accessed 27 August 2009 – Attachment 5).

In an article written by Ying Wang in the Law Quarterly, the author infers that de facto marriage is historically accepted in China given that so many marriages are not legally registered:

On the other hand, China historically recognized de facto marriage. Deeply influenced by traditional custom in imperial China, people in rural areas of China commonly emphasize the customary wedding ceremony and ignore formal marriage registration. Consequently, there are more unmarried cohabitants who hold themselves out as husband and wife in rural areas than in the cities. These rural couples often genuinely believe that they are married. In contrast, urban youths in recent years increasingly choose cohabitation over marriage partly due to the change in social attitudes regarding unmarried cohabitation. In fact, they are choosing not to marry.

Chinese courts have accepted that unregistered marriages should be treated in a court as a legal marriage. However, in some circumstances, courts have upheld the illegality of unregistered couples living together and dissolved unregistered marriages:

The second PRC , enacted in 1980, did not expressly address the issue of marriage without registration. However, just a few years later in 1984, one Supreme People’s Court opinion continued recognizing de facto marriage, while maintaining that it was unlawful for an unmarried man and woman to live together without registering for marriage. In addition, a 1989 Supreme People's Court opinion provided broad recognition for unlawful cohabitation, where the requirements for de facto marriage were not met.

Courts also had jurisdiction to dissolve unlawful cohabitation relationships. For example, in a 1991 case in Shanxi province, 22 year-old female plaintiff Wang Hongmei sued 24 year-old male defendant Liu Guoliang for of their relationship. The parties were arranged to be “married” by their parents and had cohabited together since December 1987.

Their son was born in October 1988. Plaintiff, unsatisfied with this relationship, filed a petition for a divorce decree. The People's Court of Hengshan County (1) dissolved the unlawful cohabitation relationship; (2) granted the defendant sole custody of the child and ordered the plaintiff to pay ; (3) awarded the plaintiff the wardrobe, a dowry, and one old stone kiln while awarding the defendant a greater portion of other property accrued during the relationship; and (4) ordered the plaintiff’s family to return a gift of RMB 1,000 to the defendant. The court, in reaching this decision, considered factors, such as the public policy to protect women and children, the practicability of dividing the property, and the absence of fault on the defendant’s part (Wang, Y. 2006, ‘Unmarried Cohabitation: What Can We Learn From A Comparison Between The and China?’, Family Law Quarterly, Vol. 40, Research Network website, p.5 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=896860 – Accessed 25 August 2009 – Attachment 6).

The Promotion of Private Property in China An article in the Journal of the Asia Pacific Economy published in 2001 discusses the government of Guangzhou’s practice of encouraging private home ownership since the 1990s. The source states that married couples received a benefit from both their work-unit (usually a state-owed enterprise) and the government to assist them to purchase property. It is unclear whether unmarried couples or individuals could receive this assistance:

In China, promotion of home purchase has since 1979 been one of the major housing policies. Guangzhou is in the vanguard of housing reform. In 1997 the Guangzhou government announced an innovative housing initiative – the Housing Allowance Scheme (HAS). To enhance home ownership, this scheme endeavours to eliminate completely the existing welfare ‘in-kind’ allocation system. Civil servants appointed after 30 September 1997 no longer receive state housing. Instead they are provided monthly housing allowances ‘in cash’.

…After the founding of the People’s Republic of China in 1949, housing was regarded as a welfare benefit for the people. Providing the individual with ‘an equitable share of items of personal and collective consumption’ is a fundamental belief of the socialist housing system (Sit 1997: 201). Hence, the PRC adopted the Soviet model for centrally planned housing production together with the work unit system (danwei), to ensure that ever y urban resident would be looked after by the State. A programme of housing reform was launched in 1979 to move away from this planned system. However, even in the 1990s, the socialist housing allocation system still registered a strong impact on the urban housing sector.

The Chinese government has undoubtedly played a dominant role in housing in China, especially through its direct involvement in housing provision and through welfare subsidies. In 1997 almost 80 per cent of the urban population lived in state-owned or collective-owned housing and each household received a subsidy of approximately RMB1,960 annually – representing 59.6 per cent of households’ total welfare subsidization (Chen 1997).

… Housing shortages have continued throughout the years of Communist rule even when state-owned enterprises were to take care of housing need and allocation. In 1996, the total urban population of Guangzhou was 6.5 million. This comprised 1.9 million households with an average floor space per capita of 7.5 square metres. The total urban working population was 2.03 million, of which 60 per cent worked in state-owned enterprises (Statistical Yearbook of Guangzhou 1997: 370). Work units have always faced a tremendous task in dealing with their employees’ housing needs. Given the huge number of people who need housing, a vast amount of resources has been put into housing production each year to develop the housing sector. As in other provinces, the Guangzhou government and work units have largely administered and controlled the housing sector to meet people’s needs, without the interplay of forces from demand and supply. This meant that in housing allocation, power and personal status were essential for access to good quality housing. In principle, the government and work units allocated housing units to employees according to factors such as their rank, years of service, family size and existing living area.

… The main objective of the Housing Allowance Scheme is to cut the link between work units and housing provision, and encourage home ownership in its place. From 1 January y 1998, all civil servants who joined the government after 30 September 1997 and staff of government-funded institutions may apply for the housing allowances. They will no longer receive housing units from the government. Factors such as rank determine the amount of allowance for which a civil servant is eligible. By March 1998, 2,000 civil servants were participating in the new housing programme. By July 1998, the central government prohibited institutions from selling housing at low prices to their employees. Two key features of the HAS in Guangzhou concern eligibility and subsidy payments. According to the Office of Housing Reform, civil servants are one of the most important categories of personnel involved, so here we will look particularly at this category. The main criteria for participants in the scheme appear below (Nan Fang Fang Di Chen 1997): 1 Civil servants appointed after 30 September 1997 must join the HAS. 2 Civil servants appointed before 30 September 1997 have the option of joining the HAS or continuing to accept the previously existing housing benefits: (a) Those who have not received a housing benefit are eligible to purchase Comfortable Housing at a discount. (b) Those who have received a housing benefit may, subject to certain conditions, switch to the new scheme. 3 No double housing benefits are allowed (i.e. if a husband has applied, his wife is not permitted to apply).

Under the scheme, if a married man has already received one of the housing benefits, such as allocation of a housing unit or a housing allowance, his wife is not entitled to any housing benefits provided by the government. This is to avoid giving double housing benefits to eligible participants. There are, however, still some uncertainties about the scheme. For example, there is no clear rule on housing allowance for unmarried employees (Chi-man Hui, E. 2001, ‘Home Purchase in China - A case study of Guangzhou from in-kind allocation to cash subsidy’, Journal of the Asia Pacific Economy, Volume 6, Issue 1, February, pp.48-52, Informaworld website http://www.informaworld.com/smpp/19646065- 5379631/ftinterface~content=a713771055~fulltext=713240930 – Accessed 27 August 2009 – Attachment 7).

List of Sources Consulted

Internet Sources:

Government Information & Reports Department of Foreign Affairs & Trade http://www.dfat.gov.au UK Home Office www.homeoffice.gov.uk/ US Department of State http://www.state.gov

United Nations UNHCR Refworld http://www.unhcr.org/cgi-bin/texis/vtx/refworld/rwmain

International News & BBC News website http://news.bbc.co.uk/ The Age http://www,theage.com.au ABC News http://www.abc.net.au/news

Online Subscription Services Stratfor website http://www.stratfor.com

Search Engines Google http://www.google.com Copernic

Databases: FACTIVA (news database) BACIS (DIAC Country Information database) REFINFO (IRBDC (Canada) Country Information database) ISYS (RRT Research & Information database, including Amnesty International, Human Rights Watch, US Department of State Reports) MRT-RRT Library Catalogue

List of Attachments

1. ‘Property Rights Law of the People's Republic of China’ 2007, Lehman, Lee & Xu website http://www.lehmanlaw.com/resource-centre/laws-and- regulations/general/property-rights-law-of-the-peoples-republic-of-china.html – Accessed 25 August 2009.

2. Randolph, P. & Pierson, W. 2007, ‘The New Chinese Basic Law of Property: A Real Estate Practitioner’s Perspective’, Law Professors Blog website http://lawprofessors.typepad.com/china_law_prof_blog/files/basicpropertylaw_comments. pdf – Accessed 26 August 2009.

3. ‘Registering Property in China’ 2009, Doing Business website http://www.doingbusiness.org/Exploretopics/registeringproperty/Details.aspx?economyid =42 – Accessed 25 August 2009..

4. Cooke, A. 2006, ‘Property Title Issues in Asia’, International Quality & Productivity website, http://www.iqpc.com/uploadedFiles/Topic/Real_Estate_IQ/Assets/5.pdf – Accessed 25 August 2009.

5. Chen, Y.C. 2002, ‘Civil Law Development: China and Taiwan’, Stanford Journal of East Asian Affairs, Vol.2, Spring, pp8-14 http://www.stanford.edu/group/sjeaa/journal2/china1.pdf – Accessed 27 August 2009.

6. Wang, Y. 2006, ‘Unmarried Cohabitation: What Can We Learn From A Comparison Between The United States and China?’ Family Law Quarterly, Vol. 40, 2006, Social Science Research Network website http://papers.ssrn.com/sol3/papers.cfm?abstract_id=896860 – Accessed 25 August 2009. 7. Chi-man Hui, E. 2001, ‘Home Purchase in China - A case study of Guangzhou from in- kind allocation to cash subsidy’, Journal of the Asia Pacific Economy, Volume 6, Issue 1, February, Informaworld website http://www.informaworld.com/smpp/19646065- 5379631/ftinterface~content=a713771055~fulltext=713240930 – Accessed 27 August 2009.