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China Date: 01 September 2009 Migration Review Tribunal AUSTRALIA MRT RESEARCH RESPONSE Research Response Number: CHN35368 Country: China Date: 01 September 2009 Keywords: China – Purchase and registration of property in China – Rules for unmarried couples – De facto marriage 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 title 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 laws 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 law does not recognise de facto or common law marriage, however in many parts of China up to 80 percent of marriages 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 government registration offices have become more sophisticated and practical, many of these problems have gone away, particularly in larger cities. 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.
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