中华人民共和国物权法,2007年3月16日第十届全国人民代表大会第五次会议通过 2007年3月16日公布 2007年10月1日起施行
Property Law of the People’s Republic of China
Presidential Decree No. 62
（2007年3月16日第十届全国人民代表大会第五次会议通过 2007年3月16日公布 2007年10月1日起施行）
(Adopted at the 5th session of the 10th National People 's Congress on March 16, 2007)
第一编 总 则
Part 1 General Provisions
Chapter 1 Basic Principles
Article 1 This Law is formulated pursuant to the Constitution for the purposes of safeguarding the basic economic system of the State, safeguarding the order of socialist market economy, clarifying property ownership, optimising the utility of property, and protecting the real right of rights holders.
Article 2 This Law shall apply to civil relations arising from the attribution and utilization of property.
Property referred to in this Law includes immovables and movables. Where rights are deemed as the objects of real rights by provisions of the law, such provisions shall apply.
Property rights referred to in this Law shall mean a rights holder's exclusive right of direct control over a specific property pursuant to the law, including ownership, usufruct rights and security interests.
Article 3 In the primary stage of socialism, the State adheres to the basic economic system with public ownership as a principal element, and diverse forms of ownership developing side by side.
The State consolidates and develops the public economy, and encourages, supports and guides the development of the non-public economy.
The State shall implement a socialist market economy and protect the equal legal status and development rights of all market entities.
Article 4 The real right of the State, collective real right, private real right and the real right of other right holders shall be protected by law and shall not be infringed upon by any entity or individual.
Article 5 The varieties and contents of real rights shall be prescribed by law.
Article 6 The creation, variation, transfer and extinguishment of immovable real right shall be registered pursuant to the provisions of the law. The creation or transfer of real right of a movable shall be subject to delivery in accordance with the law.
Article 7 The acquisition and exercise of real rights shall comply with the law and respect social ethics, and may not harm the public interest and the legitimate rights and interests of any other person.
Article 8 Where other relevant laws provide for real right to the contrary, such provisions shall prevail.
Chapter 2 Creation, Alteration, Transfer and Termination of Real Right
Section 1 Real Property Registration
Article 9 Creation, variation, transfer and extinguishment of immovable real right pursuant to registration pursuant to the law shall be effective; without registration, they shall have no effect, unless otherwise stipulated by the laws.
Registration is not required for natural resources which belong to the State pursuant to the law.
Article 10 The registration of an immovable shall be handled by the registration organ at the locality of the immovable.
The State shall implement a unified system of registration for immovable property. The scope, organ and measures of uniform registration shall be specified by the related laws and administrative regulations.
Article 11 In light of the different registration items, an applicant shall, when applying for the registration of a realty, provide the ownership certificate of the realty and such necessary materials as the location and area of the realty.
Article 12 The Registration Organs shall perform the following duties:
1. Verifying the ownership certificate and other necessary materials as provided by the applicant;
2. Inquiring the applicant about the registration items concerned;
(III) Register relevant items in a faithful and timely manner; and
(IV) other duties stipulated by laws and administrative regulations.
Where further evidence is required on the relevant information of the immovable under an application for registration, the registration authorities may require the applicant to supplement the materials, and may conduct onsite inspection where necessary.
Article 13 The registration authority shall not:
1. To ask for an appraisal of the real estate;
(II) Undertaking repeated registration in the name of annual inspection; and
(III) Other acts beyond the scope of registration duties.
Article 14 As regards the creation, alteration, alienation or termination of the real right of a realty, it shall go into effect since the date when it is recorded in the realty register in case the registration thereof is required by law.
Article 15 Unless the laws or contractual provisions stipulate to the contrary, a contract concluded between the parties in respect of creation, variation, transfer or extinguishment of immovable real right shall be effective upon conclusion of the contract; the failure to complete registration of real right shall not affect the validity of the contract.
Article 16 The realty register shall be the basis for determining the ownership and contents of a realty. The real estate register shall be managed by the registration authority.
Article 17 An immovable property ownership certificate shall be evidence of the rights holder's entitlement to immovable property. The items recorded in the certificate of ownership of a real estate shall accord with those recorded in the real estate register. In case of any inconsistency, the one recorded in the real estate register shall prevail unless there is evidence proving that there is indeed an error in the real estate register.
Article 18 Any right holder or interested party may file an application for consulting or copying the registration materials, and the registration organ may not reject.
Article 19 In case any right holder or interested party holds that any item recorded on the real estate register is wrong, he may apply for a correction of the registration. Where the rights holder recorded in the register of immovables agrees in writing to the correction or where there is evidence to prove that there is an error in the registration, the registration authorities shall make correction.
Where the right holder recorded in the real estate register does not agree to such correction, the interested party may apply for dissidence registration. Where the registration authorities grant dissent registration but the applicant does not file a lawsuit within 15 days from the date of dissent registration, the dissent registration shall become void. In case the dissidence registration is improper and bring into damages to the right holder, the right holder may require the applicant to compensate for damages.
Article 20 In case the related parties enter into a purchase agreement on a premise or the real right of any other realty, they may apply for advance notice registration to the registration organ so as to ensure the realization of the real right in the future. Without the consent of the holder in the advance notice registration, any disposal of the realty, after the advance notice registration, may not produce effect of real right.
In the event of extinguishment of creditor's rights following registration of advance notice, or failure to apply for registration within three months from registration of the immovable property, the registration of advance notice shall become void.
Article 21 Where a party concerned provides false materials to apply for registration and causes others to suffer damages, it shall bear compensation liability.
Where an error in registration results in damage to others, the registration authority shall be liable for compensation. The registration authority may seek recourse against the party responsible for the error in registration after making compensation.
Article 22 Registration fees for immovable property shall be collected on a per unit basis and shall not be based on a percentage of the area, volume or price of the immovable property. Specific fee rates shall be stipulated by the relevant State Council department jointly with the pricing authorities.
Section 2 Personal Property Delivery
Article 23 Unless it is otherwise prescribed by any law, the creation or alienation of the real right of a chattel shall come into effect upon delivery.
Article 24 The creation, alteration, transfer or termination of the real right of any vessel, aircraft, or motor vehicle, etc. may not challenge any bona fide third party if it is not registered.
Article 25 In case the right holder has legally possessed the chattel prior to the establishment or alienation of a chattel's real right, the real right shall come into effect upon the effectiveness of the legal act.
Article 26 Where a third party has taken legal possession of a movable prior to the creation or transfer of real right of the movable, the person assuming the obligation of delivery may, in lieu of delivery, assign the right to request the third party to return the original object.
Article 27 Where both parties agree to let the transferor retain possession of a movable when the real rights of the movable are transferred, the real rights take effect upon the effectiveness of the agreement.
Section 3 Miscellaneous
Article 28 In case the creation, alteration, alienation or termination of a real right is resulted from a legal document of the people's court or arbitration committee or a requisition decision of the people's government, etc, the real right shall come into effect upon the effectiveness of the legal document or the requisition decision of the people's government.
Article 29 Where real rights are acquired through inheritance or bequest, the real rights take effect at the commencement of the inheritance or bequest.
Article 30 Where real rights are created or terminated as a result of such factual events as the legal construction or demolition of premises, the real rights take effect upon the accomplishment of the factual event.
Article 31 As regards a real right of realty enjoyed according to the provisions of Articles 28 through 30 of the present Law, any disposal thereof may not produce effect of real right until it is registered as required by law.
Chapter 3 Protection of Real Right
Article 32 Where real rights are infringed, the rights holder may resolve the matter through settlement, mediation, arbitration or litigation.
Article 33 Where there is a dispute over the ownership or contents of real rights, the interested parties may request for confirmation of rights.
Article 34 Where an immovable or movable is under unauthorized possession, the right holder may request the return of the original object.
Article 35 Where real rights are under obstruction or may be obstructed, the right holder may request the removal of the impediment or the elimination of the danger.
Article 36 Where damage is caused to an immovable property or movable property, a right holder may demand for the repair, rework, replacement or restoration of the original condition.
Article 37 Where a right holder suffers damage as a result of an infringement of real right, the right holder may seek damages for compensation or request for the bearing of other civil liability.
Article 38 The ways for protecting real right as prescribed in this Chapter may apply either independently or jointly in light of the circumstances of infringement.
In addition to assuming civil liabilities, any entity or individual infringing upon real rights shall assume the administrative liabilities where he violates any provision on administrative regulation; and shall assume the criminal liabilities where a crime is constituted.
PART II OWNERSHIP
Chapter 4 General Provisions
Article 39 The owner of an immovable or movable is entitled to possession, use, benefit and disposal of the immovable or movable in accordance with the law.
Article 40 An owner of an immovable or movable is entitled to the creation of usufructuary rights or security interests over the immovable or movable. The holder of usufructuary right or the holder of real right for security may, when exercising the right, not injure the owner's rights and interests.
Article 41 As regards a realty or chattel that is exclusively owned by the state as prescribed by law, no entity or individual may obtain the ownership thereof.
Article 42 Collectively-owned land and housing property and other immovable property of organisations and individuals may be requisitioned pursuant to the authority and procedures stipulated by law for public interest needs.
When requisitioning land owned collectively, it is required to, in accordance with law and in full amount, pay land compensation fees, resettlement subsidies, compensation for the above-ground fixtures of the land and seedlings and other fees, arrange for social security fees for the farmers with land requisitioned, guarantee their livelihood and protect their lawful rights and interests.
When requisitioning the premises owned by entities and individuals or other realties, it is required to compensate for demolishment and relocation in accordance with law and protect the lawful rights and interests of the owners of the requisitioned realties; when requisitioning the individuals' residential houses, it is required to guarantee the living conditions of the owners of the requisitioned houses.
No entity or individual may embezzle, misappropriate, privately divide, detain or delay the payment of compensation fees for requisition and other fees.
Article 43 The State provides special protection to cultivated land, strictly restricts the conversion of agricultural land into land for construction and controls the total amount of land for construction. Any collectively owned land shall not be requisitioned in violation of the limits of statutory power and procedures.
Article 44 In case of such urgent needs as rushing to deal with an emergency or providing disaster relief, the realties or chattels owned by entities and individuals may be requisitioned according to the statutory power limit and procedures. After the use of the requisitioned immovables or movables, they shall be returned to the owners. Where an immovable or movable owned by any entity or individual is damaged or lost after being used, corresponding compensation shall be made.
Chapter 5 State and collective ownership, private ownership
Article 45 Property owned by the State as provided by law shall belong to the State, i.e., owned by the whole people.
The State Council shall exercise the ownership of State-owned properties on behalf of the State; where it is otherwise provided for in any law, such provision shall prevail.
Article 46 Mineral resources, waters and sea areas shall be in the ownership of the state.
Article 47 Land in the cities is owned by the state. Lands in rural areas and suburban areas legally owned by the State are owned by the State.
Article 48 Such natural resources as forests, mountains, grasslands, unreclaimed land and beaches shall be owned by the State, except for those that are owned by collectives as provided for by law.
Article 49 As regards the wildlife resources that shall be owned by the state as provisioned by law, they shall be in the ownership of the state.
Article 50 Radio frequency spectrum resources are owned by the State.
Article 51 Cultural relics legally owned by the State are owned by the State.
Article 52 National defense assets are owned by the State.
Infrastructures such as railways, highways, electric power facilities, telecommunication facilities, and petrol and gas pipelines legally owned by the State are owned by the State.
Article 53 State organs have the power, in accordance with the laws and the relevant provisions of the State Council, to possess, utilize and dispose of any realty or chattel directly controlled by them.
Article 54 Institutions established by the State shall have the right to possess, use, benefit and dispose of immovable property and movable property under their direct control pursuant to the laws and the relevant provisions of the State Council.
Article 55 For an enterprise invested in by the State, the State Council and the local people's governments shall, in accordance with laws and administrative regulations, perform the contributor's duties as well as enjoy the contributor's rights and interests on behalf of the State.
Article 56 Property owned by the State shall be protected by law and shall not be occupied, looted, privately divided, withheld or destroyed by any institution or individual.
Article 57 The institutions performing the duties of managing and supervising State-owned properties and their staff members shall, in accordance with the law, strengthen the management and supervision of State-owned properties to promote the maintenance and increase of the value of State-owned properties and to prevent losses thereof. Where any entity or individual causes any loss of State-owned properties by misusing authority or neglecting duty, he shall assume legal liabilities in accordance with the law.
Where, in the process of enterprise restructuring, merger, division or related-party transactions, any entity or individual found causing a loss in State-owned property by way of transferring the property at a low price, conspiring to divide the property privately, providing a guarantee without authorization or any other means in violation of the provisions on the administration of State-owned property, shall be liable in accordance with the law.
Article 58 Immovables and movables owned collectively include:
1. land, forests, mountains, grasslands, unreclaimed land and beaches that are owned by collectives in accordance with the law;
(II) collectively owned buildings, production facilities, and irrigation and water conservancy facilities;
(III) Education, science, culture, health, sports and other facilities that are collectively owned; and
(IV) other realties and chattels owned collectively.
Article 59 Immovable property and movable property collectively-owned by farmers shall be collectively-owned by members of the collective group.
Members of a collective shall decide on the following matters in accordance with legal procedures:
1. the land contracting plan and land contracting out to an entity or individual other than the collective;
(II) The adjustment of contracted land among the rights holders of the contracted management of land;
(III) Methods for use and distribution of such fees as land compensation fees;
(IV) The alteration of ownership or any other related issue of an enterprise invested by the collective; and
(V) Other matters provided by law.
Article 60 With regard to any collectively-owned land, forest, mountain, grassland, wasteland or tidal flat, the ownership thereof shall be exercised according to the following provisions:
1. Where it is owned by a rural collective of a village, the village collective economic organization or the villagers committee shall exercise the ownership on behalf of the collective;
2. Where owned by two or more rural collectives, all the collective economic organizations or villagers groups of the village shall exercise the ownership on behalf of the collective; and
(III) Where owned by a rural collective of a town, the collective economic organization of the town shall exercise the ownership on behalf of the collective.
Article 61 As regards any realty or chattel owned by an urban collective, this urban collective has the rights to possess, use, seek profits from and dispose of it according to the related laws and administrative regulations.
Article 62 Collective economic organisations or villagers' committees shall announce the status of the collectively-owned property to the members of the collective group pursuant to the laws, administrative regulations, and the articles of association, village rules or villagers' agreement.
Article 63 Collectively owned property shall be protected by law, and no entity or individual may occupy, encroach upon, privately divide or destroy it.
Where the legitimate rights and interests of any member of the collective are infringed upon by any decision made by a collective economic organization, villagers' committee or the principle thereof, such member may request the people's court to cancel the decision.
Article 64 An individual is entitled to the ownership of his legal income, premise, household goods, production tools, raw materials and other realties and chattels.
Article 65 The legal savings, investments and the proceeds therefrom of an individual shall be protected by law.
The State shall protect the succession right and other legal rights and interests of private persons in accordance with the law.
Article 66 An individual's legal properties shall be protected by law, any entity or individual may not encroach, plunder or destroy them.
Article 67 The State, any collective or individual may invest in the establishment of a limited liability company, a company limited by shares or any other form of enterprise. In case the state, a collective or an individual invest the realties or chattels it owns in an enterprise, the contributor shall, in accordance with the agreement or on the basis of his proportion of investment, enjoy rights such as obtaining asset returns, making important decisions and selecting operators and managers and perform their duties.
Article 68 In accordance with the laws, administrative regulations and its articles of association, an enterprise legal person is entitled to possess, utilize, seek profits from and dispose of any realty or chattel it owns.
As regards the rights over the realties and chattels owned by a legal person other than an enterprise legal person, the provisions of the related laws, administrative regulations and its articles of associations shall apply.
Article 69 The realties and chattels owned by social organizations in accordance with law shall be protected by law.
Chapter 6 Divisional Ownership of the Building to the Owner
Article 70 An owner is entitled to the ownership of the private areas including residential premises or premises used for business purposes within a building, and to the common ownership and common management of the common areas of the building.
Article 71 An owner is entitled to possess, use, benefit, and dispose of the exclusive parts of the building. Any owner may not endanger the safety of the building or infringe upon the lawful rights and interests of any other owner when exercising his rights.
Article 72 An owner enjoys the rights and assumes the obligations over the common parts other than the exclusive parts of the building, and may not waive such rights or refuse to perform such obligations.
In case an owner transfers his residential house or the house used for business purposes within the building, the common ownership and the common management right enjoyed by the owner over the common parts shall be transferred at the same time.
Article 73 The roads within the building area, except for the public roads of cities and towns, shall be co-owned by the owners. Green space within the building's premises shall be co-owned by owners, with the exception of public green space in cities and towns or individuals where it is clearly stated. Other public premises, common facilities and premises used for estate services within the building are co-owned by the owners.
Article 74 Car park spaces and garages within the building's premises shall satisfy the needs of the owners first.
The ownership of car park spaces and garages within the building's premises shall be agreed between the parties concerned through sale, gift or lease, etc.
Car park spaces which occupy the roads or other premises co-owned by the owners shall be co-owned by the owners.
Article 75 Owners may set up an owners' assembly and elect an owners' committee.
The relevant departments of the local People's Government shall guide and assist in establishment of owners' groups and election of owners' committees.
Article 76 The following matters should be decided jointly by the property owners:
1. The formulation and revision of the rules of procedure for the assembly of property owners;
(II) The formulation and revision of the management rules for buildings and the auxiliary facilities thereof;
(III) The election or replacement of members of the committee of property owners;
(IV) The hiring or dismissal of property service enterprises or other managers;
(V) Raising or using funds for maintaining the building and affiliated facilities thereof;
(VI) The renovation or reconstruction of buildings and affiliated facilities; and
(VII) Other important matters related to common management rights.
A decision on a matter stipulated in item (5) or (6) of the preceding paragraph shall require the consent of two-thirds or more of the owners, whose ownership of exclusive areas constitute two-thirds or more of the total area of the building. For making a decision on any other issue prescribed in the preceding paragraph, the consent of half of the total owners with exclusive parts accounting for half of the total area of the building shall be obtained.
Article 77 An owner shall not convert residential property to commercial property in violation of the provisions of the laws, regulations and management rules. An owner shall, when changing a residential house into a house used for business purposes, obtain the consent of the interested owners, in addition to complying with the laws, regulations and management stipulations.
Article 78 Decisions of the assembly of property owners and the committee of property owners are binding on property owners.
Where a decision of the assembly of property owners or the committee of property owners harms the legitimate rights and interests of a property owner, said property owner may request that the people's court nullify the decision.
Article 79 Funds for maintaining a building and affiliated facilities thereof shall be co-owned by the owners of the building. The funds may, upon the codetermination of the owners, be used for maintaining common areas such as elevators and water tanks. The raising and use of maintenance funds shall be made public.
Article 80 In the event of an agreement on matters such as expense allocation and proceeds distribution of a building or any of its auxiliary facilities, such agreement shall apply; in the absence of an agreement or such agreement is ambiguous, such matters shall be determined in accordance with the proportion of each owner's area to the total area of the building.
Article 81 The owners of a building may manage the building and affiliated facilities thereof by themselves or they may entrust a realty service enterprise or any other manager to conduct the management.
The owner shall have the right to replace the estate services enterprise or manager appointed by the developer pursuant to the law.
Article 82 In accordance with the owners' wishes, the property management service or any other manager shall provide management of the building and affiliated facilities thereof, and accept the owners' supervision.
Article 83 The owners shall comply with the laws, regulations and management stipulations.
Where any act infringes upon the legitimate rights and interests of other persons, such as the arbitrary disposal of waste, emission of pollutants or noise, keeping animals in violation of the provisions, illegally building shelters, occupying passageways or refusing to pay property management fees, etc, the owners' congress or the owners' committee has the right, in accordance with the laws, regulations and management stipulations, to request the cessation of the infringing act, removal of dangers and obstacles and compensation for any loss suffered. Where the legitimate rights and interests of an owner are infringed upon, the owner may file a lawsuit with a People's Court pursuant to the law.
Chapter 7 Neighboring Relationships
Article 84 A neighboring rights holder of an immovable shall, in accordance with the principles of facilitating production and livelihood, solidarity and mutual assistance, fairness and equity, handle the neighboring relationship properly.
Article 85 Where the disposal of neighboring relations is provided in any law or regulation, such provision shall apply; where there is no such provision, local customs shall apply.
Article 86 A rights holder of an immovable shall provide holders of adjacent relation rights with the requisite convenience to the supply and drainage of water.
The neighboring right holders of an immovable shall rationally distribute the utilization of natural running water. The natural current direction shall be respected when draining natural running water.
Article 87 A rights holder of an immovable shall provide necessary convenience where a neighboring rights holder has to use the rights holder's land by virtue of passage or for any other reason.
Article 88 Where the rights holder of an immovable has to use a neighboring land or building by virtue of the construction or repairing of a building, or the laying of wires, cables, water pipes, heating pipelines or fuel gas pipelines, etc, necessary convenience shall be provided by the rights holder of such land or building.
Article 89 The construction of a building shall not violate the relevant engineering construction standards of the State or obstruct ventilation, lighting and sunlight of adjacent buildings.
Article 90 No holder of realty may discard solid wastes or discharge such harmful substances as atmospheric pollutants, water pollutants, noise, light and electromagnetic radiation in violation of the related provisions of the state.
Article 91 The right holder of an immovable may not endanger the safety of any neighboring immovable when excavating land, constructing a building, laying a pipeline or installing equipment.
Article 92 Where the right holder of an immovable has to use a neighboring immovable for the purpose of using water, drainage, passage or laying pipelines, etc, he shall make efforts to avoid causing damages to the right holder of the neighboring immovable; in case any damage is caused, he shall make compensation.
第八章 共 有
Chapter 8 Jointly Owned
Article 93 An immovable or movable may be jointly owned by two or more entities or individuals. Joint ownership includes several co-ownership and joint co-ownership.
Article 94 Each co-owner by shares shall have the ownership of each co-owned realty or chattel in proportion to his share of the realty or chattel.
Article 95 As regards a commonly owned realty or chattel, a joint owner shall, on a common basis, enjoy the ownership of the realty or chattel.
Article 96 The co-owners shall manage the commonly owned realty or chattel in accordance with stipulations; in the case of no or unclear stipulations, all co-owners have the right and obligation of management.
Article 97 As regards the disposal or major repair of a commonly owned realty or chattel, unless it is otherwise stipulated by the co-owners, the consent of the several co-owners holding 2/3 shares or all joint owners shall be obtained.
Article 98 As regards the management expenses or any other liabilities of a commonly owned res, in case there exists any stipulation on these, such stipulation shall apply; in the case of no or unclear stipulation, the expenses shall be assumed by the several co-owners in accordance with their respective shares or commonly assumed by all joint co-owners.
Article 99 Where the co-owners of a co-owned immovable or movable have agreed not to partition the immovable or movable so as to maintain the relationship of co-ownership, such agreement shall apply; but where any co-owner has significant reasons for partitioning the immovable or movable, the partition may be requested; in the case of no or unclear agreement, a divided co-owner may request the partition at any time, and a joint co-owner may request the partition when the basis for co-ownership no longer exists or there are significant reasons for the partition. Compensation shall be made where a division results in damage to other joint owners.
Article 100 The co-owners of a commonly owned realty or chattel may decide on through negotiation the way of partition. Where no agreement is reached, the jointly owned immovable property or movable property may be divided with no reduction in value, the physical property shall be divided; where it is difficult to divide the physical property or a division will reduce its value, the proceeds from a discounting, auction or sale shall be divided.
Where there is any defect in an immovable or movable obtained from the partition by the co-owners, the other co-owners shall share the loss.
Article 101 A divided co-owner may transfer his share of a co-owned immovable or movable. The other co-owners shall have the right of first refusal under the same conditions.
Article 102 As regards an obligee's right or a debt generated from a commonly owned realty or chattel, unless it is otherwise prescribed by any law or the third party is aware of the fact that the co-owner does not have the relationship of joint and several creditor's right or debt, a co-owner shall enjoy joint and several creditor's right or undertake joint and several debt in terms of external relationship. In terms of an internal relationship among the co-owners, unless it is otherwise stipulated by the co-owners, a divided co-owner shall enjoy the creditor's right or undertake the debt on the basis of his own share, while joint co-owners shall enjoy the creditor's right or undertake the debt on a common basis. In case any several co-owner overpays his share of the liabilities, he has the right to recover the overpaid amount from the other co-owners.
Article 103 Where there is no agreement on whether the co-owned immovable or movable is under divided co-ownership or joint co-ownership or such agreement is unclear, it shall be deemed as a divided co-ownership unless a family relationship exists between the co-owners.
Article 104 A divided co-owner's share of a commonly owned immovable or movable shall be determined according to his amount of capital contribution in the case of no agreement or unclear agreement. Where it is impossible to determine the amount of capital contribution, each divided co-owner shall enjoy an equal share.
Article 105 The provisions of this Chapter shall apply as reference to usufructuary rights and security interests jointly owned by two or more organisations or individuals.
Chapter 9 Special Provisions for Acquisition of Ownership
Article 106 Where a person without the disposal right of an immovable or movable transfers the immovable or movable to an assignee, the owner is entitled to the recovery of the immovable or movable. Unless otherwise prescribed by law, the assignee shall obtain the ownership of the immovable or movable if all of the following conditions are met:
1. The assignee accepts the immovable or movable in good faith;
2. The assignment at a reasonable price;
(III) The transferred immovable or movable for which registration is required by law has been registered. Where registration is not required, the immovable or movable has been delivered to the assignee.
Where an assignee obtains the ownership of an immovable or movable in accordance with the preceding paragraph, the original owner may request the person without disposal rights of the immovable or movable to compensate for his losses.
In case a related party obtains any other form of real right in good faith, the preceding two paragraphs shall apply as reference.
Article 107 An owner or any other rights holder has the right to recover a lost property. In case the lost property is possessed by any other person through alienation, the owner has the right to require the person unauthorized to dispose of the property to compensate for damages, or, ask the assignee to return the original property within 2 years as of the date when he knows about or should know the assignee. However, if the assignee purchases the lost property through auction or from a qualified operator, the holder shall, when requiring the return of the original property, pay the assignee the amount that the assignee has paid for purchasing the property. Upon payment to the assignee of the amount paid, the right of recourse against the person without disposal rights.
Article 108 After a bona fide assignee obtains a realty, the original rights on the realty shall be terminated, unless the bona fide assignee has already known or should have known the rights when the transfer is made.
Article 109 Lost property which is found shall be returned to the rights holder. The person finding such object shall inform the right holder to claim the object or hand it over to such related departments as the public security department in time.
Article 110 Upon receipt of lost property, the relevant authorities shall notify the rights holder promptly to collect the lost property; where the rights holder is not aware, a public announcement shall be promptly made.
Article 111 The person who finds the object shall properly keep it before it is handed over to the related department, and the related department shall do so before it is claimed by the right. Civil liability shall be borne where the lost property is damaged or lost as a result of wilful misconduct or gross negligence.
Article 112 The rights holder of the property, when claiming a lost property, shall pay the finder or the related department the expenses incurred from the safekeeping of the property.
Where a right holder has offered a reward for finding the object, he shall fulfill his obligation of granting the reward when claiming the object.
Where the person who finds the property misappropriates the property, he shall be deprived of the right to claim payment for expenses incurred for safekeeping the property or demand the rights holder to perform his obligation as promised.
Article 113 Lost property that is not collected within six months from the date of the public announcement for collection shall belong to the State.
Article 114 Where property is found drifting, buried or hidden, reference shall be made to the relevant provisions on lost and found property. Where laws such as the Law on the Protection of Cultural Relics provide otherwise, such provisions shall prevail.
Article 115 Unless otherwise agreed between the parties concerned, the auxiliary properties shall be transferred together with the principal property.
Article 116 The owner shall be entitled to natural fruits of the property. Where there are both an owner and a usufructuary right holder, the usufructuary right holder shall be entitled to the natural fruits of the property. Where the parties agree otherwise, such agreement shall prevail.
Where there is an agreement between the parties on statutory fruits, the statutory fruits shall be obtained in accordance with the agreement; where there is no agreement or the agreement is unclear, statutory fruits shall be obtained in accordance with transaction practices.
Part III Usufruct
Chapter 10 General Provisions
Article 117 A usufructuary right holder is entitled to the possession, use and benefit from the immovable or movable owned by others in accordance with the law.
Article 118 For natural resources that are owned by the State or owned by the State but used by a collective or owned by a collective as prescribed by law, an entity or individual may possess, use and seek profit from them in accordance with the law.
Article 119 Unless it is otherwise prescribed by any law, the state adopts the system of paid use of natural resources.
Article 120 When exercising his rights, a usufructuary right holder shall comply with the legal provisions on protecting, reasonably exploiting and utilizing resources. When the usufructuary right holder exercises his right, the owner may not interfere.
Article 121 Where expropriation of an immovable or movable results in extinguishment of usufructuary rights or affects exercise of usufructuary rights, a usufructuary right holder shall have the right to obtain the corresponding compensation pursuant to the provisions of Article 42 and Article 44.
Article 122 The lawfully obtained right to use sea areas shall be protected by law.
Article 123 The mineral exploration right, mining right, water drawing right and the right to use water areas or tidal flats for breeding or fishery shall be protected by law.
Chapter 11 Right to Land Contractual Management
Article 124 The rural collective economic organizations apply the dual operation system characterized by the combination of centralized operation with decentralized operation on the basis of household contract operation.
As regards the cultivated land, wood land, grassland, and other land for agricultural use that are owned by farmer collectives as well as those that are owned by the state and used by farmer collectives, the system of land contractual management shall be adopted.
Article 125 A holder of rights to contractual land operations shall, pursuant to the law, have the right to possess, use and benefit from arable land, forest land, grassland, etc under contractual operations, and have the right to engage in agricultural production such as planting, forestry, husbandry, etc.
Article 126 The contractual term for arable land shall be 30 years. The contractual term for grassland shall be 30 up to 50 years. The term of contract for forestland ranges from 30 to 70 years; the term of contract for forestland with special trees may, upon approval by the competent administrative department for forestry under the State Council, be extended.
Upon expiry of the contractual period stipulated in the preceding paragraph, the holder of rights to contractual land operations may continue contractual operations pursuant to the relevant provisions of the State.
Article 127 Rights to contractual land operations shall be created from the effective date of the contract for contractual land operations.
The local people's government at the county level or above shall issue a certificate of the right to the contracted management of land, a forestry right certificate or a grassland use right certificate to the holder, register it in the brochure so as to confirm such rights.
Article 128 A holder of rights to contractual land operations shall, pursuant to the provisions of rural land contract law, have the right to circulate the contractual land operations through subcontract, exchange or transfer etc. The circulated term may not be more than the remnant term of the original contract. Any contracted land may not be used for non-agricultural development without approval.
Article 129 Where a holder of rights to contractual land operations exchanges or assigns the rights, the parties shall, if they so require, apply to the People's Government of county level and above for change of registration of rights to contractual land operations; no claims shall be made against a bona fide third party if registration is not completed.
Article 130 The party awarding the contract may not adjust the contracted land within the contract period.
Where appropriate adjustments need to be made to the contracted arable land or grassland due to special circumstances such as serious damage to the contracted land caused by a natural disaster, etc, the matter shall be dealt with pursuant to the provisions of the rural land contract law, etc.
Article 131 The party awarding the contract shall not take back the contracted land during the contract period. Where the rural land contract law and other laws provide to the contrary, such provisions shall prevail.
Article 132 In the event of expropriation of contracted land, the holder of rights to contractual land operations shall have the right to obtain the corresponding compensation pursuant to the provisions of the second paragraph of Article 42.
Article 133 Where such rural land as wasteland is contracted through bid invitation, auction or public consultation, the right to land contractual management may, in accordance with the Law on Land Contract in Rural Areas and other laws and the relevant provisions of the State Council, be circulated through transfer, pooling of shares, mortgage or other means.
Article 134 In case the contracted management is conducted over any state-owned farmland, the related provisions in the present Law shall apply by analogy.
Chapter 12 Construction Land Use Rights
Article 135 A holder of rights to use construction land shall have the right to possess, use and benefit from land owned by the State pursuant to the law, and have the right to use the land for construction of buildings, structures and auxiliary facilities.
Article 136 The right to use construction land may be created separately on the surface of or above or under the land. Newly created rights to use construction land must not infringe any existing usufructuary rights.
Article 137 Construction land use rights may be created through assignment or allotment, etc.
As regards the land used for purposes of industry, commerce, entertainment or commercial dwelling houses, etc. as well as the land with two or more intended users, the alienation thereof shall adopt such means as auction, bid invitation or any other public bidding method.
The creation of construction land use rights through allotment is strictly restricted. Where allotment is adopted, the provisions on land use in the laws and administrative regulations shall be observed.
Article 138 Where construction land use rights are created through invitation to tender, auction or agreement, etc., the parties concerned shall enter into a written construction land use rights assignment contract.
A contract on the transfer of construction land use rights shall generally contain the following items:
1. The names and addresses of the parties;
2. Boundaries and area, etc. of the land;
(III) space to be occupied by buildings, constructions and auxiliary facilities thereof;
(IV) the purpose of land use;
(V) usage period;
(VI) The grant fees and other fees as well as payment methods; and
(VII) dispute resolution.
Article 139 Registration of construction land use rights shall be completed with the registrar for creation of construction land use rights. Construction land use rights shall be established at the time of registration. A certificate on the right to use construction land shall be issued by the registration organ to the holder of the right to use construction land.
Article 140 The holder of the right to use construction land shall reasonably use the land and may not alter the purpose of land use. Where the purpose of land use needs to be altered, the approval of the relevant administrative department shall be obtained.
Article 141 The holder of rights to construction land use shall pay assignment fees and other fees pursuant to the provisions of the law and the contract.
Article 142 Unless there is evidence to the contrary, the ownership to buildings, structures and auxiliary facilities constructed by a holder of rights to construction land use shall belong to the holder of rights to construction land use.
Article 143 Unless it is otherwise prescribed by any law, the holder of construction land use rights has the right to transfer, exchange, use as equity contributions, endow or mortgage the construction land use rights.
Article 144 A written contract must be concluded by the parties for any transfer, exchange, contribution as capital, donation or mortgage of the rights to construction land use. The parties concerned may agree on the use term, which shall not exceed the remaining term of the rights to construction land use.
Article 145 An application for change registration shall be submitted to the registration authority for transfer, exchange, use as equity contribution, endowment, or mortgage of construction land use rights.
Article 146 When alienating, exchanging, using as equity contribution, endowing, or mortgaging the right to use construction land, the buildings, fixtures and affiliated facilities thereof on such land shall be disposed of simultaneously.
Article 147 Where buildings, structures and auxiliary facilities are transferred, exchanged, contributed as capital or donated, the rights to construction land use occupied by the buildings, structures and auxiliary facilities shall be disposed of simultaneously.
Article 148 Before the term of the right to use construction land expires, where it is necessary to take back the land in advance by virtue of public interests, compensations shall, according to Article 42 of this Law, be given to the houses and other realties on such land, and the corresponding land assignment fees shall be returned back.
Article 149 Construction land use rights for residential property shall be renewed automatically upon expiry of term.
The rights to construction land use for non-residential property shall be renewed pursuant to the provisions of the law upon expiry. In case there exists any stipulation on the ownership of houses and other realties on the land, such stipulation shall apply; in the case of no or unclear such stipulation, the ownership shall be determined in accordance with the provisions in the laws and administrative regulations.
Article 150 Upon extinguishment of construction land use rights, the assignor shall promptly complete deregistration formalities. The registration authority shall repossess the certificate of rights to construction land use.
Article 151. Where collectively owned land is used for construction purposes, it shall be handled in accordance with the provisions of the Land Management Law and other relevant laws.
Chapter 13 Right to Use House Sites
Article 152 A holder of rights to use residential land shall have the right to possess and use collectively-owned land pursuant to the law, and have the right to construct residential property and auxiliary facilities using the land pursuant to the law.
Article 153 The relevant provisions of the Land Administration Law and the State shall apply to the attainment, exercise and transfer of the rights to use residential land.
Article 154 The right to use house site shall be terminated where a house site is terminated by virtue of any natural disaster, etc.. A new residential site shall be allocated to villagers affected by the loss of a residential site.
Article 155 Change registration or de-registration formalities shall be promptly completed for any transfer or extinguishment of registered rights to use residential land.
Chapter 14 Easement
Article 156 An easement holder shall, according to the contract, be entitled to utilize the realty of someone else so as to enhance the efficiency of his own realty.
The term "realty of someone else" as mentioned in the preceding paragraph shall be the servient tenement, and "one's own realty" shall be the dominant tenement.
Article 157 For establishing an easement, the parties concerned shall enter into a written contract.
In general, an easement contract shall contain the items as follows:
1. names or titles and domiciles of the Parties concerned;
(II) Locations of servient tenement and dominant tenement;
(III) purposes and methods of use;
(IV) utilization period;
(V) fees and payment method; and
(VI) dispute resolution.
Article 158 The easement shall be established since the easement contract comes into effect. Where the related parties require the registration of easement, they may apply to the registrar; without registration, they may not challenge any bona fide third party.
Article 159 The holder of subservient tenement shall allow an easement holder to use his land in accordance with the contract, and may not impede the easement holder from exercising his rights.
Article 160 An easement holder shall, according to the purpose and method of use as stipulated in the contract, use the servient tenement, and make efforts to reduce the real right restrictions on the holder of the servient tenement.
Article 161 The easement term shall be stipulated by the related parties, however, it may not exceed the residual term of such usufructuary rights as the right to the contracted management of land, the right to use construction land, etc.
Article 162 As regards the easement enjoyed or assumed by a land owner, where the right to the contracted management of land or the right to use house site is created, holders of such rights may continuously enjoy or assume such established easement.
Article 163 Where any such usufructuary right as the right to the contracted management of land, the right to use house site, etc on the land has been established, the land owner may, without consent of the aforesaid usufructuary right holder, not establish any easement.
Article 164 An easement may not be separately transferred. Unless the contract provides to the contrary, an easement shall be transferred together with the transfer of rights to contractual land use or rights to the use of construction land.
Article 165 An easement may not be solely mortgaged. Where rights to contractual land operations or rights to the use of construction land are mortgaged, any rights of easement shall be transferred upon the realisation of the mortgage.
Article 166 Where a dominant tenement and rights to contractual land operations or rights to the use of construction land thereon are partially transferred, the transferee shall enjoy easement where the easement is involved in the transferred property.
Article 167 Where a servient tenement and rights to contractual land operations or rights to the use of construction land thereon are partially transferred, and the partial transfer involves an easement, the easement shall be binding on the assignee.
Article 168 The holder of the servient tenement has the right to rescind the easement contract in case an easement holder is under any of the following circumstances, and the easement shall be terminated:
1. Misuse easement in violation of law or the contract; or
(II) as regards the paid use of servient tenement, upon expiration of the stipulated time limit for payment, failing to pay fees within a reasonable period for two times after being urged to do so.
Article 169 Change registration or de-registration formalities shall be promptly completed for any change, transfer or extinguishment of a registered easement.
PART IV SECURITY INTERESTS
Chapter 15 General Provisions
Article 170 Where the obligor fails to pay its due debts or any circumstance for realizing real rights for security as stipulated by the parties concerned occurs, the holder of real rights for security shall enjoy preferred payments from the property for security, unless it is otherwise prescribed by any law.
Article 171 In civil activities such as loans and sales, where security is required to ensure the realization of creditors' rights, a security interest may be created in accordance with this Law and other laws.
Where a third party provides security to the creditor for a debtor, the third party may require the debtor to provide counter-security. The countersecurity shall be pursuant to the present Law and other related laws.
Article 172 For establishing real rights for security, a security contract shall be entered into in accordance with the provisions of this Law and other laws. A security contract shall be a subordinate one to the principal contract. Unless it is otherwise prescribed by any law, the security contract shall be invalid when the principal contract is invalid.
Where a security contract is confirmed to be void and the debtor, security provider or creditor is at fault, they shall bear their respective civil liability according to their respective fault.
Article 173 The scope of security interests shall include the main creditor's rights and interest, default penalty, compensation for damages, and the expenses for safekeeping of collateral and realisation of security interests. Where the parties agree otherwise, such agreement shall prevail.
Article 174 Where property under a security interest is damaged, lost or expropriated during the term of the security interest, the holder of the security interest may seek preferential payments in respect of the insurance money, damages or indemnities, etc. received. If the term for performing the obligee's rights as secured has not expired, such insurance money, damages or indemnities, etc. may be submitted to a competent authority for safekeeping.
Article 175 Where a guarantee is provided by a third party, and the creditor allows the debtor to transfer all or part of the debt without the written consent of the guarantor, the guarantor shall not be liable for the corresponding guarantee.
Article 176 Where a secured creditor's rights are secured by property and a guarantor, the creditor shall realise creditor's rights pursuant to the agreement when the debtor defaults on its debt obligations or where circumstances for the realisation of the security interest agreed by the parties has occurred; where no agreement exists or the agreement is ambiguous, and the debtor has provided security in the form of property by itself, the creditor shall realise creditor's rights by way of the security in the said property first; where security in the form of property is provided by a third party, the creditor may realise creditor's rights by way of security in the form of property or request the guarantor to bear guarantee liability. After assuming the guarantee liability, the third party has the right to seek recourse against the debtor.
Article 177 Real rights for security may be terminated under any of the following circumstances:
1. The principal obligee's rights are terminated;
2. real rights for security have been realized;
3. The obligee waives the real rights for security; or
(IV) Any other circumstance under which the real rights for security will be terminated as provided for by any law.
Article 178 Where any provision in the Security Law conflicts with that of the present Law, the latter shall prevail.
Chapter 16 Mortgage Right
Section 1 General Mortgage Right
Article 179 Where an obligor or third party mortgages his properties to the obligee without transferring the possession of such properties for the purpose of guaranteeing the payment of debts, if the obligor fails to pay due debts or any circumstance as stipulated by the parties concerned for realizing the mortgage right occurs, the obligee has the right to seek preferred payments from such properties.
The debtor or third party referred to in the preceding paragraph shall be the mortgagor; the creditor shall be the mortgagee and the property provided as a guarantee shall be the mortgaged property.
Article 180 A mortgage may be established on the following properties of which the obligor or third party has the right of disposal:
1. Buildings and other objects attached to the land;
2. the right to use construction land;
(III) the right to contractual management of such land as barren land, etc. that is acquired through bid invitation, auction and public consultation, etc.;
(IV) manufacturing facilities, raw materials, semi-manufactured goods and finished products;
(V) Buildings, vessels and aircraft under construction;
(VI) transportation vehicles;
(VII) other properties not prohibited from being mortgaged by any law or administrative regulation.
A mortgagor may mortgage the properties listed in the preceding paragraph together.
Article 181 An enterprise, individual industrial and commercial household or agricultural production operator may, upon the written agreement between the parties concerned, mortgage the existing production equipments, raw materials, semi-finished products and products or those to be owned in future, and when the obligor fails to pay his due debts or any circumstance as stipulated by the parties concerned for realizing the mortgage right happens, the obligee has the right to seek preferred payments from the chattels existing at the time of the realization of the mortgage right.
Article 182 Where a building is mortgaged, the rights to use construction land as possessed by the building shall be mortgaged concurrently. When mortgaging the right to use construction land, all the buildings on such land shall be mortgaged together.
Where the mortgagor fails to mortgage the properties in accordance with the provisions of the preceding paragraph, the properties not mortgaged shall be deemed to be mortgaged together.
Article 183 The rights to use construction land for a township or village enterprise may not be individually mortgaged. Where a building such as a township factory or village enterprise is mortgaged, the rights to use construction land as possessed by the building shall be mortgaged together with the building.
Article 184 The following properties may not be mortgaged:
1. the ownership of land;
(II) the right to use such collectively-owned land as cultivated land, house sites, private plots of cropland and hilly land, etc. except for those mortgagable as prescribed by law;
(III) educational, medical and other public welfare facilities of institutions and social groups with the aim of benefiting the public such as schools, kindergartens, hospitals, etc.;
(IV) properties with unclear or controversial ownership or use rights;
(V) properties legally confiscated, seized or controlled; or
(VI) other properties that cannot be mortgaged as prescribed by any law or administrative regulation.
Article 185 For establishing a mortgage right, the parties concerned shall enter into a written mortgage contract.
In general, a mortgage contract shall contain the items as follows:
1. Category and amount of the secured obligee's rights;
(II) the time limit for performance of the obligation by the debtor;
3. the name, quantity, quality, status, location, ownership or use right of the mortgaged property;
(IV) The scope of guarantee.
Article 186 Prior to the expiration of the term for paying debts, the mortgagee and the mortgagor may not stipulate that the ownership of the mortgaged property shall be attributed to the obligee when the obligor fails to pay his due debts.
Article 187 Where any of the property stipulated in item (1) to item (3) of the first paragraph of Article 180 or a building under construction as stipulated in item (5) is mortgaged, mortgage registration formalities shall be completed. Mortgage interests shall be created at the time of registration.
Article 188 In case properties as provided for in Items (4) or (6) of Paragraph 1 of Article 180 of the present Law or a vessel or aircraft under construction as provided for in Item (5) are mortgaged, the mortgage right shall be established since the mortgage contract comes into effect; without the registration, the mortgage right may not challenge any third party with good faith.
Article 189 For mortgage of movable property stipulated in Article 181 by an enterprise, individually-owned business or agriculture producer, registration formalities shall be completed with the administration for industry and commerce at the location where the mortgagor stays. The mortgage right shall be established since the mortgage contract comes into effect; without the registration, such mortgage right may not challenge any third party with good faith.
The mortgage as provided for in Article 181 of the present Law may not challenge the buyer who has paid a reasonable price and obtained the mortgaged property in the ordinary course of business.
Article 190 Where a mortgaged property has been leased before a mortgage contract is entered into, the mortgage rights shall not affect the original leasehold relations. Where a mortgaged property is leased after the establishment of mortgage rights, the leasehold relation may be challenge the registered mortgage rights.
Article 191 Where a mortgagor transfers the mortgaged property during the mortgage term with the consent of the mortgagee, the money generated from the transfer shall be used for the early repayment of debts to the mortgagee or be submitted to a competent authority for safekeeping. Any excess from the transfer proceeds shall belong to the mortgagor and any shortfall shall be borne by the debtor.
A mortgagor may not transfer the mortgaged property during the mortgage term without the consent of the mortgagee, unless the mortgage right is terminated due to the transferee's settlement of the debts on behalf of the mortgagor.
Article 192 Mortgage interests must not be separated from creditors' rights and individually transferred, or used to secure other creditors' rights. Where the obligee's rights are transferred, the mortgage right thereof shall be transferred concurrently, unless it is otherwise prescribed by any law or agreed by the parties concerned.
Article 193 Where any act of a mortgagor is sufficient to cause a reduction in value of the mortgaged property, the mortgagee has the right to demand that the mortgagor cease such act. Where the value of the mortgaged property is reduced, the mortgagee shall have the right to demand the recovery of the value of the mortgaged property, or provide a security equal to the value reduced. Where the mortgagor neither recovers the value nor provides any security, the mortgagee has the right to demand the early repayment of debts by the obligor.
Article 194 A mortgagee may abandon the mortgage right or the sequence thereof. A mortgagee and a mortgagor may, through negotiations, alter the sequence of receiving compensation in respect of mortgage rights or the amount of secured obligee's rights, etc., however, such alteration may not adversely affect any other mortgagee without his written consent.
Where an obligor creates the mortgage by its/his own properties, and the mortgagee abandons the mortgage right, the sequence of receiving compensation in respect of mortgage right or alters the mortgage right, the other guarantors shall be exempted from the guarantee liability, the extent that the mortgagee has lost the right to seek preferred payments, unless any other guarantors undertake to continue to provide the guarantee.
Article 195 Where the debtor defaults on its debt obligations or where circumstances for the realisation of the mortgage interest as agreed by the parties has occurred, the mortgagee may, by agreement with the mortgagor, claim the proceeds from a discount, auction or sale of the mortgaged property in priority, by requiring the realisation of the mortgaged property's value. Where the agreement harms the interests of the other creditors, the other creditors may apply to the People's Court for revocation of the agreement within one year from the date on which they become aware or should be aware of the revocation matter.
Where no agreement on the means of realizing the mortgage right is reached by the mortgagee and the mortgagor, the mortgagee may require the people's court to auction or sell off the mortgaged property.
When cashing or selling the mortgaged property, its market price shall be referred to.
Article 196 Where a mortgage is created in accordance with Article 181 hereof, the mortgaged property shall be confirmed under any of the following circumstances:
1. Upon expiration of the term for paying debts, the obligee's rights have not been realized;
2. the mortgagor is declared bankrupt or is revoked;
(III) Other circumstances as stipulated by the parties concerned for realizing the mortgage right; or
(IV) Any other circumstance seriously impacting the realization of the obligee's rights.
Article 197 Where the obligor fails to pay his due debts or any circumstance as stipulated by the parties concerned for realizing the mortgage right arises, and the mortgaged property is thus seized by the people's court in accordance with the law, the mortgagee has the right to collect natural or statutory fruits of the mortgaged property as of the date of seizure, unless the mortgagee has failed to notify the obligor liable for paying off statutory fruits.
The "fruits" as referred to in the preceding paragraph shall be firstly used for paying the expenses for collecting the fruits.
Article 198 Any proceeds from a discount, auction or sale of mortgaged property in excess of the debt shall belong to the mortgagor. Any shortfall shall be borne by the debtor.
Article 199 Where a property is mortgaged to two or more obligees concurrently, the proceeds of the auction or sale of the mortgaged property shall be applied to paying debts in the following manner:
1. In case all the mortgage rights to have been registered, the payments shall be made according to the registration sequence; and where the sequence is the same, the payments shall be made on the basis of the proportion of obligee's rights;
(II) The registered mortgage right shall be paid off prior to the unregistered one; and
(III) Where no mortgage rights have been registered, the payments shall be made on the basis of the proportion of obligee's rights.
Article 200 Any buildings newly constructed on the land after the mortgage of the rights to use construction land shall not belong to the mortgaged properties. In realizing the mortgage right, such newly-constructed buildings and the construction land use right shall be disposed of concurrently, provided, however, that the mortgagee has no right to seek preferential payments from any proceeds of the disposal of these newly-constructed buildings.
Article 201 Where rights to contractual land operations are mortgaged pursuant to the provisions of item (3) of the first paragraph of Article 180, or rights to construction land use as possessed by a building such as a township factory or village enterprise pursuant to the provisions of Article 183 are mortgaged, and the mortgaged interests are realised, the land's nature of ownership and purpose of use may not be altered without undergoing statutory procedures.
Article 202 A mortgagee shall exercise the mortgage rights within the limitation of action for the principal creditor's rights; failing which, no protection shall be granted by the People's Court.
Section 2 Mortgage Right at Maximum Amount
Article 203 Where an obligor or third party provides secured property for the obligee's rights that will arise consecutively within a certain term in order to guarantee the payment of debts, if the obligor fails to pay its/his due debts or any circumstance as stipulated by the parties concerned for realizing mortgage rights occurs, the mortgagee has the right to seek preferred payments from the secured property to the extent of the maximum amount of obligee's rights.
The obligee's rights existing prior to the establishment of the mortgage right at maximum amount may, upon the consent of the parties concerned, be incorporated into the scope of obligee's rights under the mortgage security at maximum amount.
Article 204 Where part of an obligee's rights are transferred prior to the establishment of the maximum amount of mortgage security, the maximum amount of mortgage rights may not be transferred unless otherwise stipulated by the parties concerned.
Article 205 Prior to the confirmation of the obligee's rights under the maximum amount of mortgage security, the mortgagee and the mortgagor may, by agreement, alter the period for the confirmation of the obligee's rights, the scope of obligee's rights and the maximum amount of obligee's rights, provided that such alteration may not adversely affect any other mortgagee.
Article 206 The obligee's rights of a mortgagee shall be confirmed under any of the following circumstances:
1. The stipulated period for the confirmation of the obligee's rights expires;
2. In case there is no stipulation on such term or the related stipulations are not clear, and where the mortgagee or the mortgagor requires determine the obligee’s rights after two years as of the date for the establishment of the mortgage right at maximum amount;
(III) It is impossible to have new creditor's rights;
(IV) The mortgaged property is sealed up or seized;
(V) The debtor or mortgagor is declared bankrupt or is revoked; or
(VI) Any other circumstance as prescribed by any law for confirming the obligee's rights.
Article 207 The mortgage right at maximum amount shall be governed by, in addition to the provisions in this Section, the provisions on general mortgage right as provided for in Section 1 of this Chapter.
第十七章 质 权
Chapter 17 Pledge Right
Section 1 Chattel Pledge
Article 208 Where an obligor or a third party pledges his movables to the obligee for the purpose of guaranteeing the payment of debts, if the obligor fails to pay his due debts or any circumstance for realizing the pledge right as stipulated by the parties occurs, the obligee has the right to seek preferred payments from the pledged movables.
The debtor or third party referred to in the preceding paragraph shall be the pledgor; the creditor shall be the pledgee and the delivered movable property shall be the pledged property.
Article 209 Movables that are prohibited from being pledged by any law or administrative regulation may not be pledged.
Article 210 For establishing the pledge right, the parties concerned shall enter into a written pledge contract.
In general, a contract on pledge right shall contain the following items:
1. Category and amount of the secured obligee's rights;
(II) the time limit for performance of the obligation by the debtor;
(III) the name, quantity, quality and condition of the pledged property;
(IV) The scope of guarantee; and
(V) The time of delivery of the pledged properties.
Article 211 The pledgee and the pledger may not, prior to the time limit for paying debts expires, stipulate that the ownership of pledged properties be attributed to the obligee when the obligor fails to pay due debts.
Article 212 The pledge right shall be established after the pledgee has delivered the pledged properties.
Article 213 Unless it is otherwise stipulated in the contract, a pledgee has the right to obtain the fruits of the pledged properties.
The "fruits" as referred to in the preceding paragraph shall be firstly used for paying the expenses for collecting the fruits.
Article 214 Where a pledgee uses or disposes of the pledged properties without the consent of the pledgor during the duration of the pledge right, and thus damages are caused to the pledgor, the pledgee shall assume the compensation liabilities.
Article 215 A pledgee shall be obliged to properly keep pledged properties; where pledged properties are damaged or lost by virtue of improper keeping, the pledgee shall make compensations.
Where pledged properties may be damaged or lost by act of the pledgee, the pledger may ask for the pledgee to submit them to a competent authority for keeping or require pay debts in advance and take back them.
Article 216 Where damage or a significant reduction in value may result from causes not attributable to the pledgee, and the rights of the pledgee is detrimental, the pledgee shall have the right to demand the pledgor to provide a security of corresponding value; where the pledgor fails to do so, the pledgee may auction or sell off the pledged property and may, by agreement with the pledgor, seek early repayment of the debt with the proceeds thereof or deposit the proceeds.
Article 217 Where a pledgee transfers the pledge within the duration of the pledge right without the consent of the pledgor, thus causing damage or loss to the pledged properties, the pledgee shall make compensations to the pledgor.
Article 218 A pledgee may abandon the pledge right. Where an obligor provide the pledge right by his/its own properties, and the pledgee abandons the pledge right, unless any of other security providers promises to provide the security all the same, other security providers’ security liability will be exempted within the scope for which the pledgee has lost the right to seek preferred payments.
Article 219 Where the obligor has paid the debts or the pledgor has fulfilled the secured obligee's rights in advance, the pledgee shall return the pledged properties.
Where the debtor defaults on its debt obligations or where circumstances for the realisation of the pledge interest as agreed by the parties has occurred, the pledgee may, by agreement with the pledgor, claim the proceeds from a discount, auction or sale of the pledged property in priority, in satisfaction of its claim.
When cashing or selling the pledged properties, their market price shall be referred to.
Article 220 A pledgor may, upon expiration of the time limit for paying debts, request the pledgee to exercise the pledge right in a timely manner. If the pledgee fails to do so, the pledgor may request the People's Court to auction or sell off the pledged properties.
Where a pledgor has requested the pledgee to exercise the pledge right in a timely manner, but the pledgee is lazy to do so and thus damages are caused, the pledgee shall make compensations.
Article 221 Any proceeds from a discount, auction or sale of pledged property in excess of the amount of debt secured shall belong to the pledgor and any shortfall shall be borne by the debtor.
Article 222 The pledgor and the pledgee may, upon negotiation, agree on the maximum amount of pledge rights.
The provisions on maximum amount of mortgage interests in Section 2 of Chapter 16 shall apply to maximum amount of pledge interests, in addition to the relevant provisions of this Section.
Section 2 Pledge of Rights
Article 223 The following rights of which an obligor or third party has the right of disposal may be pledged:
1. bills of exchange, cheques and promissory notes;
(II) bonds and deposit receipts;
(III) warehouse receipts and bills of lading;
(IV) transferable fund units and equity;
(V) Property rights included in transferable intellectual property rights such as exclusive trademark rights, patent rights, copyrights, etc;
(VI) Accounts receivable;
(VII) other property rights that can be pledged as prescribed by any law or administrative regulation.
Article 224 The parties concerned shall conclude a written contract for any pledge of a bill of exchange, cheque, promissory note, bond, certificate of deposit, warehouse receipt or bill of lading. The pledge right shall be established after the delivery of the title certificate of the pledge to the pledgee. In case there is no title certificate, the pledge right shall be established after the related department has handled the registration of the pledge.
Article 225 Where the date of redemption or collection of the draft, cheque, cashier's cheque, bond, deposit receipt, warehouse receipt or bill of lading is prior to the due date of the principal obligee's rights, the pledgee may redeem or collect the goods, and may, upon negotiation with the pledgor, seek early payments with the redeemed money or the collected goods, or submit the said money or goods to a competent authority for safekeeping.
Article 226 The parties concerned shall enter into a written contract for the pledge of fund units or equity. As regards the pledge of fund units or the stock rights that are registered in the securities depository and clearing institution, the pledge right shall be established after the securities depository and clearing institution has handled the registration of the pledge. As regards the pledge of other stock rights, the pledge right shall be established after the administration for industry and commerce has handled the registration of the pledge.
Pledged fund units and equity may not be transferred, unless the pledgor and the pledgee negotiated and agreed to the contrary. The pledgor shall apply the proceeds received from a transfer of fund units and equity to discharge the debt with the pledgee in advance or deposit the amount.
Article 227 The parties concerned shall conclude a written contract for pledge of property rights in intellectual property rights such as exclusive rights to use registered trademarks, patent rights, copyright, etc. The pledge shall be created at the time of registration of the pledge by the relevant authorities.
After the property rights in the intellectual property have been pledged, unless it is otherwise agreed to between the pledger and the pledgee upon negotiations, the pledger may not alienate the pledge or permit anyone else to use it. The pledgor shall make early repayment of the debt with the proceeds received from the transfer or permit the use of the pledged intellectual property right, or submit the proceeds to a competent authority for safekeeping.
Article 228 The parties concerned shall conclude a written contract for any account receivable pledged. The pledge interests shall be created at the time of registration of the pledge interest by the credit investigation organisation.
After the receivables have been pledged, unless it is otherwise agreed on by the pledger and the pledgee upon negotiations, the pledger may not alienate the pledged receivables. The pledgor shall apply the proceeds received from a transfer of the accounts receivable to discharge the debt with the pledgee in advance or deposit the amount.
Article 229 The pledge of rights shall be governed by, in addition to the provisions prescribed in this Section, the provisions in Section 1 of this Chapter on the pledge of chattels.
Chapter 18 Lien
Article 230 Where an obligor fails to pay off his due debts, the obligee may take lien of the chattels that are owned by the obligor and lawfully occupied by the obligee, and has the right to seek preferred payments from such chattels.
The "obligee" as referred to in the preceding Paragraph shall be the lienor, and the occupied movable property shall be the property under lien.
Article 231 The chattels taken as lien by the obligee and the obligee's rights shall fall into a same legal relationship, except for the lien between enterprises.
Article 232 As regards chattels of which no lien may be taken as prescribed by law or stipulated by the parties concerned, lien may not be taken of them.
Article 233 Where a property under lien is divisible, its value shall be equal to the amount of debts.
Article 234 A lienor shall assume the obligation to properly keep the property under lien, and shall make compensations in case the property under lien is damaged or lost by virtue of improper safekeeping.
Article 235 A lienor shall be entitled to the fruits generated from the property under lien.
The "fruits" as referred to in the preceding paragraph shall be firstly used for paying the expenses for collecting the fruits.
Article 236 A lienor shall, after the property is taken as lien, stipulate with the obligor the term for the fulfillment of the obligee's rights; and in the case of no or unclear stipulation, two months or more shall be given to the obligor for fulfilling the obligee's rights, except for such chattels that are not easy to be kept as fresh goods, perishable goods, etc.. Where the obligor fails to fulfill the debt within the specified period, the lienor may cash the property under lien upon negotiation with the obligor, or seek preferential payments from the proceeds of the auction or sale of the property under lien.
When the property under lien is converted into money or sold off, its market price should be referred to.
Article 237 An obligor may, upon expiration of the time limit for paying debts, require the lienor to exercise the lien; and where the lienor fails to do so, the obligor may request the People's Court to sell or auction the property under lien.
Article 238 Any proceeds from the discount, auction or sale of lien property in excess of the debt involved shall belong to the debtor and any shortfall shall be borne by the debtor.
Article 239 Where lien property is subject to existing mortgage interests or pledge interests, the lienor shall be entitled to a priority in its claims.
Article 240 A lien shall be extinguished when the lienor loses possession of the property under lien or accepts another form of guarantee from the obligor.
第五编 占 有
Part V Possession
第十九章 占 有
Chapter 19 Possession
Article 241 In case the possession occurs on the basis of a contractual relationship, the related stipulations in the contract shall be apply to the use, proceedings and default liability of the realty or chattel concerned; and the relevant legal provisions shall apply if there is no such stipulation in the contract or the stipulations are not clear,.
Article 242 Where a possessor causes damage to the immovable or movable under his possession during use, the mala fide possessor shall be liable for compensation.
Article 243 Where an immovable or movable is possessed by the possessor, the owner may request the possessor to return the original object and fruits thereof, provided that the owner shall pay necessary expenses paid by the bona fide possessor for the maintenance of the immovable or movable.
Article 244 Where a realty or chattel under possession is damaged or lost, the possessor shall return the insurance money, damages or indemnities for the said destruction or loss to the holder if the holder requires compensations; and a mala fide possessor shall make compensations in case the damages to the holder have not been sufficiently made up.
Article 245 Where an immovable or movable under possession is encroached upon, the possessor has the right to request the return of the original object; where any act impairs the possession, the possessor has the right to request the cessation of impairment or danger; and where any damage is caused by virtue of encroachment or interference, the possessor has the right to request compensation.
The claim by a possessor for the return of the original object shall perish, if the possessor fails to exercise it within one year as of the date of encroachment.
Article 246 Before any law or administrative regulation prescribes the scope, organ and measures for uniform registration of realties, local regulations may provide for related matters in accordance with the related provisions in the present Law.
Article 247 This Law shall go into effect as of October 1, 2007.