China’s new provisional regulation for real estate registration took effect on March 2. Since its approval by the State Council on Dec. 22, 2014, the regulation has triggered heated discussion nationwide. The landmark rule takes another step toward strengthening China’s property rights system, influencing not only the modernization of national governance system and governance capability, but also the livelihoods of all Chinese people.

China’s Property Law that took effect in 2007 stipulates “the creation, change, transfer or elimination of the real right of a real property shall become effective after it is registered according to law.” It also declares “registration of a real property shall be executed by the registration organ of the place where the real property is located.”
 

Following introduction of the law, the Ministry of Land and Resources (MLR) started to research and organize related units to collect legal materials from 12 countries and regions in preparation to unify the real estate registration system. Introduction of the new regulation offers a fundamental legal basis for setting up the real estate registration system.
 

“Implementation of the regulation can better guarantee the rights of property owners, enhance the management efficiency of the government, and facilitate enterprises and individuals. It is conducive to promoting the construction of the modern property rights system with clear ownership, clear-cut rights and obligations, strict protection and smooth flow,” said Wei Lihua, deputy director of the Department of Policies and Laws under MLR.
 

Wang Guanghua, director of the Real Estate Registration Department under MLR, said that the regulation has four main objectives: to establish a bureau responsible for real estate registration and unified requirements for institution structuring, registration management, basic procedures, and information sharing and protection; to continue guaranteeing the stability of property rights under existing property deeds; to simplify procedures to reduce time for people; and to strictly regulate registrations and strengthen government responsibilities to improve service.
 

In order to better deal with the relationship between information sharing and protection, the regulation also requires establishing a unified platform for information registration and a system for inquiry service. Information can be shared in real time and will be strictly confidential. Only related interest subjects have the right to search and copy materials. All these requirements aim to guarantee the authenticity of information and the security of market transactions.

 

Minimal impact on property market
Some institutions claim that a unified registration system will curb the development of the property market and the regulation will increase housing supply and accelerate downward pressure. Are these opinions right?

The regulation clearly defines real estate registration scope. It covers collective ownership of land, ownership of buildings and forests, contracted land management rights, and rights to the use of construction land, homesteads and maritime areas.
 

“In the long term, a real estate registration system is conducive to healthy development of the property market and perfecting its operation mechanism. The formation of a stable and profitable market will not result in the slowdown of housing investment. Change to housing investment is related to the economic situation and consumer demands,” said Wang.
 

Some people claim that the next step after a real estate registration system is real estate taxes. Sun Xianzhong, a research fellow from the Institute of Law at the Chinese Academy of Social Sciences, said that the collection of real estate taxes is still in the pilot stage. Registration efforts may make administration of taxes more convenient, added Sun.
 

Going beyond fighting corruption
Many people have said that the real estate registration system will step up the anti-corruption fight. Sun said the system should be open to the public. “There are two main opinions in society: one is that real estate registration information should be open to all people and be freely accessed; another is that there should be a close connection between real estate registration and anti-corruption to monitor officials’ assets. These two opinions have internal links and I must clarify both of them,” said Sun.

There is a misunderstanding about the issue of monitoring officials by checking their real estate assets. In view of international experience, sunshine laws make governments’ actions open to public scrutiny. Disclosing officials’ assets aims to improve social supervision. However, the real estate registration system is not the same as a sunshine law. “Real estate registration is connected with both government officials and the public, but sunshine laws are just available to the government,” added Sun.
 

As to whether limited housing will be embraced into the registration system, Wei said that due to historical reasons there are a large number of houses with limited property rights. However, according to current laws, this type of housing is actually not protected by law and there is no legal basis for involving it into the system, added Wei.