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is a series of responses by Lou Jianbo and Pat Randolph to inquires
about Chinese real estate law. Many of the questions were posed originally
by Martin Thuemmel as part of his own commentary to a more general
inquiry by Hilary Joseph.
Questions: (1)
Is the concept of the Chinese land use right part of private law
or administrative law? (2) If it is a concept of private law, is
the land use right a contract right or a property right?
(1) Martin's
suggestion that the land use right is really a creature of administrative
law is quite interesting. It is true that there are some administrative
preconditions to the creation of land use rights. Articles 8, 9,
10 of the Urban Real Estate Administration Law establish specific
prerequisites to the transfer of a land use right to a potential
user. For instance, the transfer of land use rights must comply
with the general land plan, city zoning and the annual land plan.
Such requirements relate primarily to government administration.
Notwithstanding
the various administrative requirements, we believe that once an
authorized governmental unit transfers a land use right on a specific
parcel of land to individuals or entities, the right becomes a civil
right - a property right. The fact that the State originally is
involved in the creation of a land use right should not control
its characterization. When the State gives an award of to an excellent
citizen, we do not say that citizen has no private ownership interest
in the award.
We should also
note that it is not true that one party to a tudi shiyongquan contract
is always the state. Land use rights can be retransferred by the
holder to a third party subject to certain conditions. Martin may
be correct when he says that there has been some debate over whether
to accept *contracts* concerning land use rights as civil law contracts
because of the extensive involvement of administrative agencies.
It nevertheless is beyond question that a land use right itself
is a civil right. This is established by article 80 of the General
Principles of Civil Law. In fact, scholars view it to be a great
achievement of the economic reform of China that Article 3 of the
General Principles of Civil Law provides that "parties to a
civil activity shall have equal status." The General Principles
do not provide directly that they deal with property relationships
or personal relationships between the State and other parties. But
the State is in some sense a public legal entity, so, when it enters
into a contract with individuals or other entities, it should have
equal status with its counterpart, at least in theory. In the land
use right transfer contract, the State should also be treated equally
with the potential users. We must admit that since the State has
the monopoly position in land use right transfer, and since the
State has also land administration authority, the terms and conditions
of the land use right transfer contract are mostly decided by the
State. Nevertheless, the potential user still has the freedom not
to enter into the contract. That is why it still should be considered
a civil contract.
Martin referred
to three judicial explanations by China's Supreme People's Court
and found some conflicts among them. He concluded from the conflicts
that even the Supreme People's Court was not clear about whether
a land use right was a contract right or property right (in English
law sense). He attributes the changes in the judicial explanations
to what he called the 'lack of dogmatic clarity' of the nature of
land use rights.
Martin has not
taken into consideration the fact that the different explanations
reflect the endeavors of the Supreme People's Court to distinguish
the administrative prerequisites of the land use rights from and
the civil right nature of the rights themselves. The history demonstrates
an effort on the part of the Court to make use of developing legal
mechanisms to address legal disputes regarding land use rights.
In its 1987 "pifu" called 'How to Apply Article 13 of
the Land Administration Law and Article 14 of the Forest Law', the
Supreme People['s] Court [took into consideration the provisions
of the Land Administration Law and the Forest Law that] land use
disputes would first be addressed by the People's Government, but
there would be an appeal right to the People's Courts. The pifu
provided that such disputes, although initially addressed to the
People's Government, are still disputes over civil interests. It
stated that the People's Court that heard the case would have the
disputing private parties as litigants. The People's Court was to
handle the case in the civil chamber. In its opinions on the new
administrative procedure law of 1991, however, the Supreme People's
Court proclaimed: 'If citizens, legal persons and other organizations
unsatisfied with the decision of people's governments or their departments
on the ownership, use rights over the land, minerals, forests and
other natural resources sue the governments' decision to the people's
courts, the people's court should handle the cases as administrative
cases.'
There is, of
course, an apparent conflict in these two decisions. If we examine
the language of them carefully, however, we can find that they are
more consistent than might first appear. The 1987 decision is actually
an expedient measure. At the time there was no such thing as administrative
procedure law. Administrative decisions could not be challenged.
In fact there were no administrative divisions in people's courts.
Article 13 of the Land Administration Law and article 14 of the
Forest Law, however, provided that those who are not satisfied with
government decisions concerning the ownership or use rights over
land, woods or woodland could appeal to the People's Courts. These
provisions presented a major challenge to the People's Courts: how
to comply with the statute when there was essentially no mechanism
for review of the governmental determination concerning the land
use right. The rough response - flawed but pragmatic - was the 1987
decision of the Supreme People's Court to treat the appeal as a
dispute between two private individuals. If a private party was
not satisfied with the decision of people's governments and should
appeal to the courts, the courts would regard have the [counter]
disputing party, instead of the governments that [made] the decision,
as the litigant. The Supreme People's Court had to limit this category
of cases to the civil procedure law and could not include the People's
Government in the litigation. Since the litigants - nongovernmental
parties - are the disputing parties, the case could still be handled
as a civil case by the civil division of the court.
Unfortunately
problems remained as to who should be the plaintiff and who should
be the defendant, and as to how the court treat the decisions of
the government if the courts' finding conflicted with the governments'
decision. Taking all these things into consideration, when the Administrative
Procedure Law came into force, the Supreme People's Court decided
immediately that these kinds of cases should be handled as administrative
cases. That meant automatically that the governmental entity that
made the decision which the plaintiff is wished to appeal will be
the defendant in the administrative litigation. Thus, we can explain
some of the differences in approach between the 1987 and 1991 pronouncements.
The 1992 Notice of the Supreme People's Court on the Issues Concerning
the Acceptance and Hearing of the Real Estate Cases makes clear
the position of the Supreme People's Court on the civil right nature
of land use rights. This notice consists of two paragraphs. Paragraph
I provides that disputes over the real estate interests (including
land use rights) between citizens, legal persons or other organizations
should be accepted and heard by the civil division of the People's
Court. Paragraph II provides that if citizens, legal persons or
other organization unsatisfied with the decision of the governments
or their departments on land ownerships or land use rights, or the
administrative penalties on real estate issues by the governments
or their departments, they can institute an administrative pleading
to the People's Courts.
(2) Now the
rest of the question is whether the land use right a right in rem
or a creditors' right (or, more precisely, a contract right). Land
use rights appear in the General Principles of Civil Law in article
80 under the title 'Property Ownership and Related Property Rights.'
As we have discussed before, rights under this title are rights
in rem.
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