Viewpoint... Analysis of legal issues in the allocation of land, authorization to operate land use rights and the lease of above-ground buildings.

Published:

2022-12-21

Introduction Because the allocated land is obtained free of charge from the state, and the authorized operation of the land belongs to the special nature of the operation and management of the specific subject authorized by the state, there are also special provisions on the allocation of land, the authorized operation of land use rights and the lease of above-ground buildings. In judicial practice, whether the lease contract is found to be invalid in violation of relevant regulations, the judicial decision is not consistent. In this case, how the parties to the contract should avoid the risk and prevent the lease contract from being found invalid by the court is particularly critical. This paper tries to analyze the legal problems existing in the allocation of land, the authorized operation of land use rights and the lease of above-ground buildings, and analyzes the relevant judicial precedents and the legal problems involved, puts forward relevant legal suggestions, and gives opinions on how to regulate the allocation of land, the authorized operation of land use rights and the lease of above-ground buildings for reference. The legal problems of the 1. in the allocation of land, the authorization of land use rights and the lease of above-ground buildings. When the (I) leases the allocated land use rights and above-ground buildings, it does not meet the conditions stipulated in Article 45 of the Interim Regulations on the Assignment and Transfer of State-owned Land Use Rights in the People's Republic of China Cities and Towns, or the lease has not been approved by the land management department and real estate management department of the municipal or county people's government. Compared with the general land use right and building lease, China has made special provisions on the allocation of land use right and the lease of above ground buildings. According to the provisions of Articles 45 and 46 of the Interim Regulations on the Assignment and Transfer of State-owned Land Use Rights in the People's Republic of China Cities and Towns, the lease of allocated land use rights and above-ground buildings needs to meet certain conditions, the land user must be a company, enterprise, other economic organization or individual, shall have a state-owned land use certificate, have legal property rights certificates of above-ground buildings and other attachments, and sign a land use right transfer contract in accordance with the provisions of the interim regulations on the transfer and transfer of State-owned Land use right in the People's Republic of China cities and towns. Pay the land use right transfer fee to the local city or county people's government or offset the land use right transfer fee with the proceeds from the transfer, lease or mortgage. At the same time, the lease needs to be approved by the land management department and the real estate management department of the city and county people's government. For those who do not meet the conditions for lease, the Interim Regulations on the Assignment and Transfer of State-owned Land Use Rights in the People's Republic of China Cities and Towns stipulates that the allocated land use rights and above-ground buildings shall not be leased, and the allocated land use rights and above-ground buildings shall be leased without approval. Yes, it will be fined by the land management department of the city or county people's government. Therefore, for the allocated land use rights and above-ground buildings that do not meet the above-mentioned lease conditions and are leased without approval, and the lease contract signed with the lessee violates the provisions of the Interim Regulations on the Assignment and Transfer of State-owned Land Use Rights in the People's Republic of China Cities and Towns. According to the relevant cases collected by the author, the validity of this kind of lease contract is still controversial, and there are two opinions of judgment, valid and invalid, in such cases, there is a risk that the lease contract will be found invalid by the court. After the (II) leased the allocated land and authorized the operation of the land use right, it changed the land use, but failed to submit it to the relevant departments for approval in accordance with the the People's Republic of China Land Administration Law and other relevant provisions. Due to the implementation of the land use control system in China, units and individuals using land must use land in strict accordance with the purposes determined by the overall land use plan. Therefore, for the leased allocated land and authorized operation of land use rights, the land should also be used in strict accordance with the determined use. If the land use is changed, according to the "the People's Republic of China Land Management Law", "The Ministry of Land and Resources on Strengthening Land Asset Management and Promoting State-owned Enterprise Reform" Several Opinions on Development "and the" Implementation Rules for the Transfer, Lease and Mortgage Transaction of Construction Land Use Rights in Shandong Province (Trial), should be submitted to the relevant departments for approval. If the allocated land after the lease and the authorized operation of the land use right change the land use but do not report for approval, according to the relevant cases collected by the author, the lease contract in this case will be found invalid by the court. 2. Judicial Decision View Integration and Jurisprudential Analysis (I), with regard to the first legal issue listed above, that is, the allocation of land use rights and the lease of above-ground buildings, which does not meet the relevant conditions and does not go through the approval procedures, there are two views on the validity and invalidity of the lease contract in judicial practice: ♦Judicial opinion on the validity of the lease contract: In the civil judgment of the second instance of the dispute over the land lease contract between Shenzhen Longxiang Freight Co., Ltd. and Shenzhen Pingyan Sea Railway Intermodal Transport Co., Ltd., No. 8602 (2020) Guangdong 03 Minzhong, Shenzhen Intermediate People's Court held that "although Articles 44 and 45 of the Interim Regulations on the Assignment and Transfer of State-owned Land Use Rights in the People's Republic of China Cities and Towns stipulate that the lease and allocation of land use rights shall be approved by the land administration departments of the municipal and county people's government, however, the aforementioned provisions and Article 46 of the regulations do not expressly stipulate that the consequences of violation are invalid contracts. In Item 10 of the" Guiding Opinions of the General Office of the State Council on Improving the Secondary Market for the Transfer, Lease and Mortgage of the Right to Use Construction Land "(Guo Ban Fa [2019] No. 34), it is also clear that the lessor should declare and turn over the land income contained in the rent in accordance with relevant regulations," No separate approval procedures for the lease of the right to use the allocated construction land will be handled ". After synthesizing the consequences of the violation of the aforementioned mandatory provisions and the state's reform of the secondary market management policy for construction land, as far as the unauthorized allocated land lease contract is concerned, the Interim Regulations on the Assignment and Transfer of State-owned Land Use Rights in Cities and Towns in the People's Republic of China Article 44 and the first paragraph of Article 45 should not be regarded as effective mandatory provisions. Accordingly, the Court does not support Longxiang's appeal that the lease contract in question is invalid due to illegality." ♦Judicial opinion on the invalidity of the lease contract: In (2020) Lu 14 Min Zai No. 37 civil judgment on the retrial of disputes over the lease contract of Shandong Dezhou Prison and Wang Hong's holy land, the retrial court held that "the subjects of leasing the state-owned land use rights obtained through allocation are companies, enterprises, other economic organizations and individuals, and should be reported to the relevant government land management departments for approval. The lessor of the lease contract involved in this case is Dezhou prison, which is the national penalty enforcement organ, it does not belong to companies, enterprises, other economic organizations and individuals, and does not meet the main requirements for leasing and allocating land use rights as stipulated in Article 45 of the Interim Regulations on the Assignment and Transfer of State-owned Land Use Rights in the People's Republic of China Cities and Towns. The lease contract signed was not submitted to the relevant government departments for approval. Therefore, the original second-instance judgment found the contract invalid because it violated the mandatory provisions of the law." (II) Secondly, for the second legal issue listed above, that is, the validity of the lease contract for the change of land use after the allocation of land and the authorization to operate the land lease, there is no dispute in judicial practice, and the court has found the lease contract invalid. For example, in the civil judgment of the second instance of the dispute over the land lease contract between Beijing Baoxing Golf Training Center Co., Ltd. and Beijing Daxing District Water Affairs Bureau at (2022) No. 1891, Beijing 02 Minzhong, Beijing No. 2 Intermediate People's Court held that "the state implements a land use control system. Units and individuals using land must use land in strict accordance with the purposes determined in the overall plan for land use. If a construction unit uses state-owned land, it shall use the land in accordance with the provisions of the paid use contract such as the transfer of the land use right or the provisions of the approval document for the allocation of the land use right; if it is really necessary to change the construction use of the land, it shall be approved by the competent department of natural resources of the relevant people's government and submitted to the people's government that originally approved the land for approval. Among them, the change of land use within the urban planning area shall first obtain the consent of the relevant urban planning administrative department before reporting for approval. Daxing Water Bureau and Baoxing Golf Company used unused land for the construction of golf courses and changed the land use without the approval of relevant authorities, which violated the mandatory provisions of the law and was an invalid contract." In the civil judgment of the second instance of the dispute over the land lease contract between China United Network Communications Co., Ltd. Qingdao Branch and Shandong Lianneng Electric Power Design Co., Ltd., No. 1464 (2021) Lu 02 Min Zhong, the Qingdao Intermediate people's Court held that "the use of the land use right involved is public facilities, the type of use right is authorized operation, the use of the land leased by the appellee is parking building, commerce, office, etc, however, failure to report to the relevant departments for approval and make up the land transfer fee, in violation of land management laws and regulations, should be invalid. (III) jurisprudence analysis Through the above cases, it can be seen that the allocation of land use rights and the lease of buildings on the ground does not meet the relevant conditions, nor does it go through the approval procedures, that is, the first legal issue listed in this article, the validity of the lease contract is controversial in judicial practice. The key to the differences lies in whether the relevant laws and regulations that are required to meet the relevant conditions and require approval are "mandatory provisions of validity" that can be determined to be invalid when leasing the allocated land, authorized operation of land use rights and buildings on the ground ". In this regard, the author believes that the determination of whether the lease contract is invalid should be argued separately according to the specific circumstances of the case: 1. For the allocated land lease contract that does not meet the relevant conditions and is leased without approval, it violates the provisions of Article 44 and Article 45 of the Interim Regulations on the Assignment and Transfer of State-owned Land Use Rights in the People's Republic of China Cities and Towns. It will not harm the national and social public interests, but only violate the management order, therefore, it is not appropriate to regard Articles 44 and 45 of the Interim Regulations on the Assignment and Transfer of State-owned Land Use Rights in the People's Republic of China Cities and Towns as mandatory provisions of validity. In such cases, the lease contract should not be deemed invalid. 2. For the lease contract that has not been reported for approval after the allocation of land and the authorized operation of land lease, it violates the provisions of Article 56 of the the People's Republic of China Land Administration Law. Due to the implementation of the land use control system by the state, the units and individuals who use the land must use the land in strict accordance with the use determined by the overall land use plan. In this case, if the land use is changed after the lease but not approved, the lease contract shall be null and void if it is in violation of the mandatory provisions of the law. 3. In addition, the validity of lease contracts for the allocation of land, the authorization to operate land use rights and the lease of buildings on the ground is also subject to other factors such as the payment of land income in rent. Relevant legal provisions: 3. relevant legal advice The (I) lessor shall strictly improve the relevant procedures for obtaining the property rights of the allocated land and above-ground buildings, and strictly perform the approval procedures for the lease of the allocated land use rights and above-ground buildings, and promptly turn over the land income in the rent to the relevant land and real estate resources management unit. If the (II) allocates land or authorizes the operation of land use rights to change the use of land after leasing, it shall be submitted to the relevant departments for approval, in strict accordance with Article 56 of the the People's Republic of China Land Administration Law and Article 3 of the Ministry of Land and Resources on strengthening the Management of Land assets and promoting the Reform and Development of State-owned Enterprises, for those who change the use of land after allocating land and authorizing the operation of land use rights. Actively apply to the relevant departments for approval. (III) recommend that the relevant terms be refined and refined when the lease contract is signed. First, according to the first paragraph of Article 75 of the Civil Code, the term of the lease shall not exceed twenty years. More than 20 years, more than part of the invalid. Due to the long lease period generally involved in the allocation of land, authorized operation of land use rights and above-ground buildings, it should be noted that when signing a lease contract with the lessee, the agreed lease period shall not exceed 20 years. Secondly, because the allocated land is obtained from the state free of charge and the authorized operation of the land belongs to the special nature of the operation and management of a specific subject authorized by the state, the lessor may lose the relevant land use right due to changes in relevant national policies and other conditions. Therefore, in order to avoid disputes, in addition to signing in accordance with the general lease contract, special attention should be paid to the following points: 1. Perfecting the issue of no responsibility to discharge the lease contract in the case of state expropriation, requisition or recovery of land; 2. Clarify the attribution of levies and compensation in the case of state expropriation, etc; 3. Improve the liability for damages for above-ground appendages, related decorations, etc. caused by the termination of the lease contract under the aforementioned circumstances.

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