Real Estate Perspective: Highlights of the Guidelines on Regulating the Seizure, Seizure and Freezing of Property in the Real Estate Sector
Published:
2021-09-07
Recently, the Shandong Higher People's Court formulated the "Guidelines on Regulating the Seizure, Seizure, and Freezing of Property" (hereinafter referred to as the "Work Guidelines"), which will come into effect on August 6, 2021. The Work Guidelines are formulated in accordance with the provisions of the the People's Republic of China Civil Procedure Law, the Provisions of the Supreme People's Court on Several Issues Concerning the Handling of Property Preservation Cases by the People's Courts, and the Provisions of the Supreme People's Court on the Seizure, Seizure and Freezing of Property in Civil Execution by the People's Courts and other laws and judicial interpretations, combined with the actual trial execution work of the courts in the province, the purpose is to standardize the measures of sealing up, detaining and freezing in the preservation and execution of civil litigation, to prevent over-standard, over-range and over-time seizure, and to safeguard the legitimate rights and interests of the parties in accordance with the law. The work guidelines are divided into 36 articles, covering the general provisions, the seizure, seizure and freezing of all kinds of property, as well as relief procedures, etc., in the estimation of property value, the execution concept of good faith and civilization of the court, as well as the processing when it comes to the presale of commercial housing, have been improved and innovated, and responded to many problems in practice, thus effectively improving the operability of the judicial level. In this article, our lawyers summarize the highlights of the Work Guidelines in the real estate sector. A uniform method of estimating the value of real estate has been developed. According to Article 21 of the Provisions of the Supreme People's Court on the Seizure, Seizure and Freezing of Property in Civil Enforcement of the People's Courts, the seizure, seizure and freezing of the property of the person subject to execution shall be limited to the amount of the claim and the execution expenses determined by the legal document, and shall not be sealed, seized or frozen significantly beyond the amount of the subject matter. The current provisions clearly prohibit the court from seizing the amount of the subject matter, and in the preservation and enforcement procedures, the value of real estate, land use rights, construction in progress and other real estate is often unable to determine, the specific value must be subject to the assessment report, and the assessment procedure is later placed in the seizure, freezing, seizure procedures. Therefore, in the seizure of real estate, land use rights, construction in progress and other real estate, how to avoid the amount of seizure, has become a major problem in judicial practice. The "work guidelines" clearly require that the property value should be estimated when sealing up, detaining or freezing the property of the person subject to execution, and a unified estimation method should be formulated for the value of real estate, land use right and construction in progress, which reduces the arbitrariness of value estimation and provides a way to avoid over sealing up real estate in judicial practice. Law Index: Guidelines of the Higher People's Court of Shandong Province on Regulating the Seizure, Seizure and Freezing of Property Article 1: To seal up, seize and freeze the property of the person subject to execution (or the person subject to preservation, the same below), the amount of the subject matter of execution and the value of the sealed up, seized and frozen property and the value of the sealed up, seized and frozen property available for execution (I. e. the amount of the property that can be used to pay off the creditor's rights in this case) shall be estimated, and the value of the sealed up, the amount obviously exceeding the target shall not be sealed up, detained or frozen. Article 3: The value of seized, seized or frozen property may be estimated in the following manner:(2) If the property is seized, the value of the seized property shall be estimated by reference to the value of the property in the same location and under the same conditions. If the seized property is a first-hand house, you can refer to the sales price of the real estate development enterprise and the guide price issued by the local real estate management department; if the seized property is a second-hand house, you can refer to the price approved by the tax authority and the second-hand house market transaction price. (3) If the land use right is seized, the value of the seized property shall be calculated by reference to the amount of the transfer recorded in the land transfer contract. (4) If the construction in progress is pre-sealed, the value of the sealed-up property shall be estimated with reference to the amount of investment in the project, the amount of work completed, demolition and resettlement, sales, etc. Article 4: In addition to bank deposits, if the parties have an agreement on the value of the seized, seized or frozen property, the value of the seized property may be estimated by reference to the agreement of the parties. Protection of the legitimate rights and interests of the priority recipients In judicial practice, when the court estimates the value of the real estate to be sealed up, it may omit the priority compensation rights of the construction project price, mortgage and other priority compensation rights on the real estate, especially the priority compensation right of the construction project price cannot be found in the real estate registration authority, so it is easier to be ignored in the evaluation of the execution of the property. In order to safeguard the legitimate rights and interests of the priority payee such as the actual builder and the mortgagee, the Work Guidelines clearly stipulate that if there is a known priority of the construction project price, mortgage, pledge, lien, etc. on the subject matter, the priority payment amount shall be deducted when estimating the value of the property available for execution. Law Index: Guidelines of the Higher People's Court of Shandong Province on Regulating the Seizure, Seizure and Freezing of Property Article 6: Where there is a known priority right, mortgage, quality right, lien, etc. on the subject matter of the seizure, seizure or freezing of the construction project price, the amount of priority compensation shall be deducted when estimating the value of the seized, seized or frozen property available for execution. Clarify the rules for the seizure of commercial housing presale by development enterprises. (1) When the real estate development enterprise purchased by the executed person presale commercial housing, the "Work Guidelines" clarify the main identity of the real estate management department and the real estate development enterprise to assist the obligor, and provide assistance obligations of the real estate development enterprise in two aspects Provisions: one is to notify the enforcement court when the house meets the transfer registration conditions, and the other is to pay the purchase price directly to the court account when the commercial housing sales contract is terminated. This regulation fully takes into account the characteristics of presale commercial housing, no matter whether the commercial housing sales contract can continue to be performed, the executor can get the final compensation, effectively improving the efficiency of implementation. At the same time, the "Work Guidelines" stipulate that when the court seals up the presale commercial housing purchased by the person subject to execution, the real estate development enterprise has the right to apply for execution objection. (2) When the person to be executed is a real estate development enterprise, the Work Guidelines clearly stipulate that the commercial housing under its name that has been approved for sale (pre-sale) can still be sealed up, but the fact that it has been sold and delivered should be ascertained and recorded. The seizure record is sufficient. In judicial practice, when the developer is the person to be executed, the court is always hesitant about whether the commercial housing that has been presale can be sealed up. This "Work Guidelines" clarifies that such commercial housing can be sealed up. If outsiders in the presale commercial housing case believe that the court's seizure infringes their own legitimate rights and interests, they can apply to the enforcement court to exclude enforcement. Law Index: Guidelines of the Higher People's Court of Shandong Province on Regulating the Seizure, Seizure and Freezing of Property Article 17: If the real estate development enterprise presale commercial housing purchased by the executed person is sealed up, the real estate management department and the real estate development enterprise shall be the obligor. The notice of assistance in execution served on the real estate development enterprise may state that when the house meets the conditions for transfer registration, the enforcement court shall be notified. When the real estate development enterprise and the person subject to execution terminate the sale contract, the purchase of the house shall be returned to the person subject to execution according to the contract. The money is paid to the court account. During the pre-seizure period, if the sales contract is terminated in accordance with the law, and the real estate development enterprise pays the purchase price to the court account, the enforcement court shall lift the pre-seizure. In the process of execution, if the real estate development enterprise requests the exclusion of execution, it shall be examined in accordance with the provisions of Article 227 of the Civil procedure Law. Article 18: If the person subject to execution is a real estate development enterprise, the commercial housing under its name that has been approved for sale (pre-sale) may be sealed up, but the facts of the sale and delivery of the real estate shall be ascertained and recorded in the seizure record. In the process of execution, if an outsider requests the exclusion of execution, it shall be examined in accordance with the provisions of Article 227 of the Civil Procedure Law. Rules for reconciliation of parties after excess seizure Under the current regulations, when the real estate subject is over-sealed, the court often decides whether to unseal it based on the objection of the party being executed, and then raises an enforcement objection to the party who is not satisfied with the court's decision. The Work Guidelines stipulate the reconciliation rules for the parties after the over-seizure, that is, if the person subject to execution considers that the seizure is obviously over-standard, the enforcement court may organize the person subject to execution and the person applying for execution to negotiate, and if the person applying for execution approves, the seizure of the over-standard part may be directly lifted. This provision can effectively improve the efficiency of implementation and save judicial resources. Law Index: Guidelines of the Higher People's Court of Shandong Province on Regulating the Seizure, Seizure and Freezing of Property Article 33: If the enforcement court finds that the seizure is obviously over-standard, it may lift the seizure of the over-standard part ex officio. If the person applying for execution is not satisfied with the act of dissolution, it shall be examined in accordance with the provisions of Article 225 of the Civil Procedure Law.
Recently, the Shandong Higher People's Court formulated the "Guidelines on Regulating the Seizure, Seizure, and Freezing of Property" (hereinafter referred to as the "Work Guidelines"), which will come into effect on August 6, 2021. The Work Guidelines are formulated in accordance with the provisions of the the People's Republic of China Civil Procedure Law, the Provisions of the Supreme People's Court on Several Issues Concerning the Handling of Property Preservation Cases by the People's Courts, and the Provisions of the Supreme People's Court on the Seizure, Seizure and Freezing of Property in Civil Execution by the People's Courts and other laws and judicial interpretations, combined with the actual trial execution work of the courts in the province, the purpose is to standardize the measures of sealing up, detaining and freezing in the preservation and execution of civil litigation, to prevent over-standard, over-range and over-time seizure, and to safeguard the legitimate rights and interests of the parties in accordance with the law.
The work guidelines are divided into 36 articles, covering the general provisions, the seizure, seizure and freezing of all kinds of property, as well as relief procedures, etc., in the estimation of property value, the execution concept of good faith and civilization of the court, as well as the processing when it comes to the presale of commercial housing, have been improved and innovated, and responded to many problems in practice, thus effectively improving the operability of the judicial level. In this article, our lawyers summarize the highlights of the Work Guidelines in the real estate sector.
A uniform method of estimating the value of real estate has been developed.
According to Article 21 of the Provisions of the Supreme People's Court on the Seizure, Seizure and Freezing of Property in Civil Enforcement of the People's Courts, the seizure, seizure and freezing of the property of the person subject to execution shall be limited to the amount of the claim and the execution expenses determined by the legal document, and shall not be sealed, seized or frozen significantly beyond the amount of the subject matter.The current provisions clearly prohibit the court from seizing the amount of the subject matter, and in the preservation and enforcement procedures, the value of real estate, land use rights, construction in progress and other real estate is often unable to determine, the specific value must be subject to the assessment report, and the assessment procedure is later placed in the seizure, freezing, seizure procedures. Therefore, in the seizure of real estate, land use rights, construction in progress and other real estate, how to avoid the amount of seizure, has become a major problem in judicial practice. The "work guidelines" clearly require that the property value should be estimated when sealing up, detaining or freezing the property of the person subject to execution, and a unified estimation method should be formulated for the value of real estate, land use right and construction in progress, which reduces the arbitrariness of value estimation and provides a way to avoid over sealing up real estate in judicial practice.
Law Index: Guidelines of the Higher People's Court of Shandong Province on Regulating the Seizure, Seizure and Freezing of Property
Article 1:To seal up, seize and freeze the property of the person subject to execution (or the person subject to preservation, the same below), the amount of the subject matter of execution and the value of the sealed up, seized and frozen property and the value of the sealed up, seized and frozen property available for execution (I. e. the amount of the property that can be used to settle the creditor's rights in this case) shall be estimated, and the value of the sealed up, seized and frozen property available for execution shall be equivalent, the amount obviously exceeding the target shall not be sealed up, detained or frozen.
Article 3:The value of the seized, seized or frozen property may be estimated in the following manner:(2) if the property is seized, the value of the seized property shall be estimated by reference to the value of the property in the same location and under the same conditions. If the seized property is a first-hand house, you can refer to the sales price of the real estate development enterprise and the guide price issued by the local real estate management department; if the seized property is a second-hand house, you can refer to the price approved by the tax authority and the second-hand house market transaction price. (3) If the land use right is seized, the value of the seized property shall be calculated by reference to the amount of the transfer recorded in the land transfer contract. (4) If the construction in progress is pre-sealed, the value of the sealed-up property shall be estimated with reference to the amount of investment in the project, the amount of work completed, demolition and resettlement, sales, etc.
Article 4:In addition to bank deposits, if the parties have an agreement on the value of the seized, detained or frozen property, the value of the seized property may be estimated by reference to the agreement of the parties.
Protection of the legitimate rights and interests of the priority recipients
In judicial practice, when the court estimates the value of the real estate to be sealed up, it may omit the priority compensation rights of the construction project price, mortgage and other priority compensation rights on the real estate, especially the priority compensation right of the construction project price cannot be found in the real estate registration authority, so it is easier to be ignored in the evaluation of the execution of the property. In order to safeguard the legitimate rights and interests of the priority payee such as the actual builder and the mortgagee, the Work Guidelines clearly stipulate that if there is a known priority of the construction project price, mortgage, pledge, lien, etc. on the subject matter, the priority payment amount shall be deducted when estimating the value of the property available for execution.
Law Index: Guidelines of the Higher People's Court of Shandong Province on Regulating the Seizure, Seizure and Freezing of Property
Article 6:If there is a known priority right, mortgage, quality right, lien, etc. on the subject matter of the seizure, seizure or freezing, the amount of priority compensation shall be deducted when estimating the value of the sealed, seized or frozen property available for execution.
Clarify the rules for the seizure of commercial housing presale by development enterprises.
(1) When the real estate development enterprise purchased by the executed person presale commercial housing, the "Work Guidelines" clarify the main identity of the real estate management department and the real estate development enterprise to assist the obligor, and provide assistance obligations of the real estate development enterprise in two aspects Provisions: one is to notify the enforcement court when the house meets the transfer registration conditions, and the other is to pay the purchase price directly to the court account when the commercial housing sales contract is terminated. This regulation fully takes into account the characteristics of presale commercial housing, no matter whether the commercial housing sales contract can continue to be performed, the executor can get the final compensation, effectively improving the efficiency of implementation. At the same time, the "Work Guidelines" stipulate that when the court seals up the presale commercial housing purchased by the person subject to execution, the real estate development enterprise has the right to apply for execution objection.
(2) When the person to be executed is a real estate development enterprise, the Work Guidelines clearly stipulate that the commercial housing under its name that has been approved for sale (pre-sale) can still be sealed up, but the fact that it has been sold and delivered should be ascertained and recorded. The seizure record is sufficient. In judicial practice, when the developer is the person to be executed, the court is always hesitant about whether the commercial housing that has been presale can be sealed up. This "Work Guidelines" clarifies that such commercial housing can be sealed up. If outsiders in the presale commercial housing case believe that the court's seizure infringes their own legitimate rights and interests, they can apply to the enforcement court to exclude enforcement.
Law Index: Guidelines of the Higher People's Court of Shandong Province on Regulating the Seizure, Seizure and Freezing of Property
Article 17:If the real estate development enterprise presale the commercial housing purchased by the person subject to execution is sealed up, the real estate management department and the real estate development enterprise shall be the obligor for assistance. The notice of assistance in execution served on the real estate development enterprise may state that when the house meets the conditions for transfer registration, the enforcement court shall be notified. When the real estate development enterprise and the person subject to execution terminate the sale contract, the purchase of the house shall be returned to the person subject to execution according to the contract. The money is paid to the court account. During the pre-seizure period, if the sales contract is terminated in accordance with the law, and the real estate development enterprise pays the purchase price to the court account, the enforcement court shall lift the pre-seizure. In the process of execution, if the real estate development enterprise requests the exclusion of execution, it shall be examined in accordance with the provisions of Article 227 of the Civil procedure Law.
Article 18:If the person to be executed is a real estate development enterprise, the commercial housing under its name that has been approved for sale (pre) may be sealed up, but the facts of the sale and delivery of the real estate shall be ascertained and recorded in the seizure record. In the process of execution, if an outsider requests the exclusion of execution, it shall be examined in accordance with the provisions of Article 227 of the Civil Procedure Law.
Rules for reconciliation of parties after excess seizure
Under the current regulations, when the real estate subject is over-sealed, the court often decides whether to unseal it based on the objection of the party being executed, and then raises an enforcement objection to the party who is not satisfied with the court's decision. The Work Guidelines stipulate the reconciliation rules for the parties after the over-seizure, that is, if the person subject to execution considers that the seizure is obviously over-standard, the enforcement court may organize the person subject to execution and the person applying for execution to negotiate, and if the person applying for execution approves, the seizure of the over-standard part may be directly lifted. This provision can effectively improve the efficiency of implementation and save judicial resources.
Law Index: Guidelines of the Higher People's Court of Shandong Province on Regulating the Seizure, Seizure and Freezing of Property
Article 33:If the enforcement court finds that it clearly exceeds the standard, it may, ex officio, lift the seizure of the part that exceeds the standard. If the person applying for execution is not satisfied with the act of dissolution, it shall be examined in accordance with the provisions of Article 225 of the Civil Procedure Law.
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