News Center

How to deal with the relevant legal risks of construction enterprises under the environment of real estate market regulation in China

Published:

2013-03-08

[Abstract]]In the real estate market regulation environment, construction enterprises face at least four legal risks, namely, the risk between the construction enterprise and the contractor, the risk between the construction enterprise and the material supplier, subcontractor, labor company, the risk of the affiliated unit and the construction enterprise,The project manager is responsible for the legal risks of the construction enterprise under the system. In the current market situation, construction enterprises should actively respond to measures, so as to effectively prevent and control the corresponding risks, reduce or reduce the corresponding losses.

Key words]Real estate control construction enterprise risk

After the global economic crisis in 2008, my country's real estate market has also entered a downturn. However, under the central government's general policy of "protecting the economy and promoting growth", the property market has gradually recovered, followed by a good market in 2009. The situation and environment have pushed housing prices to a record high. Since 2010, China's real estate market has carried out a new round of regulation, and the control measures are more stringent than before. On the basis of combing and analyzing China's real estate regulation and control policies since 2010, the author analyzes the main legal risks faced by construction enterprises and puts forward corresponding countermeasures and opinions.

1. China's real estate control policies and control effects since 2010

In 2010, in order to curb housing prices, the state has issued policies in all aspects, of which the National Ten Articles and the National Five Articles are the most stringent, mainly focusing on the four aspects of land, financing, taxation, and social housing. In terms of land, ensure that no less than 70% of the total supply of land for housing construction is used for affordable housing, shantytown renovation and self-occupied small and medium-sized commercial housing, and strictly control the land for large housing construction. In addition, for the non payment of land transfer price, idle land, land hoarding and speculation, it is forbidden to participate in land bidding within a certain period of time. The land transfer fee must be paid within one year after the land is acquired through reasonable means such as bidding, auction and listing. In terms of financing, developers' bank credit, listing financing, trust financing and other channels are all restricted by the China Banking Regulatory Commission. Commercial banks have suspended the issuance of loans for households to purchase third and above housing; for those who cannot provide local tax payment certificates or social insurance payment certificates for more than one year Non-local residents with certificates have suspended the issuance of home purchase loans. The down payment of home buyers has increased, with a down payment of 30% for the first home, 50% for the second home, and an interest rate of 1.1 times. At the same time, the Ministry of Housing and Urban-Rural Development issued a notice that all commercial housing that has not obtained a presale permit shall not be charged by subscription, reservation, numbering, etc. In terms of taxation, the advance rate of land value-added tax for developers has been increased, and some of the deed tax and personal tax concessions for buyers have been canceled, although the specific time and measures for the implementation of the real estate tax are not clearly listed, the Shanghai 12 articles, which were first launched in Shanghai as an example, are also actively making necessary preparations for the pilot real estate tax reform; in terms of indemnificatory apartment, there are not only quantitative requirements, but also relevant policies in terms of system and funds, and the introduction of accountability mechanism; the definition of second homes, in addition to the number of houses, loan records are also one of the criteria for identifying a second home. Looking back on 2010, the property market policy almost covered the whole year, but there was a gap in August and September. It was precisely because of the discontinuity of the policy, along with the long-suppressed rigid demand, that the property market pushed to a new high. The introduction of new policies to cool the real estate market has become very urgent. The "National Five Articles" were introduced in this context. The "National Five Articles" are still a continuation of the "National Ten Articles", but they are more specific and more specific than the "National Ten Articles". Strictly. With the implementation of the "National Five Articles", the transaction volume of first-tier cities declined at the end of 2010, and the opening volume of various regions decreased significantly.

With the gradual slowdown of the property market at the end of 2010, on January 26, 2011, the executive meeting of the State Council once again introduced the "New Country's Eight Articles", requiring the strengthening of differentiated housing credit policies, and the down payment ratio for families who purchase second homes with loans Not less than 60%, the loan interest rate is not less than 1.1 times the benchmark interest rate. This has largely discouraged speculative home purchases. In terms of banking policy, the state has continuously raised the deposit reserve ratio and the benchmark interest rate of RMB deposits and loans, restricting bank loans and raising the benchmark interest rate of loans. On the one hand, it is very difficult for real estate development enterprises to borrow money from banks, even if the interest rate of loans is higher than before, which will inevitably aggravate the financial risk of real estate. On the other hand, it also suppresses some rigid demand and hits the enthusiasm of some new buyers, this has led to a slowdown in the return of funds from developers. In terms of real estate tax, Beijing, Shanghai and Shenzhen became the first pilot cities for real estate tax. In terms of affordable housing, we have increased the supply of affordable housing, standardized the accountability system of affordable housing, and strived to increase the supply of affordable housing. In terms of the purchase restriction policy, it is clearly required that eachMunicipalities,cities separately listed in the planIn provincial capitals and cities where housing prices are too high and rising too fast, housing purchase restrictions should be strictly formulated and implemented within a certain period of time. In principle, for local household registration households who already have 1 set of housing, and non-local household registration households who can provide local tax payment certificates or social insurance payment certificates for a certain number of years, the purchase of 1 set of housing is restricted; for local household registration households that already own 2 or more houses, non-local household registration households that own 1 or more houses, and non-local household registration households that are unable to provide local tax payment certificates or social insurance payment certificates for a certain number of years, they will be suspended in their administrative areas. In terms of land, expand the supply of ordinary commercial housing, prevent the occurrence of land enclosure and land hoarding, and increase the reporting system of the completion time of the project, which also shortens the construction period of the developer's entire construction project from the side.

At the end of 2011, Hu Jintao presided over the Politburo meeting, calling for the implementation of a proactive fiscal policy and a prudent monetary policy in 2012, making pre-adjustments and fine-tuning in accordance with changes in the situation; adhering to the real estate control policy unswervingly, and promoting a reasonable return of housing prices. This also reflects the central government's firm determination to curb housing prices.

Under the strong real estate control policy of the central government, the current housing prices have dropped significantly, and the housing market transaction volume has decreased. The situation in Shandong Province is that the supply of commercial housing below 90 square meters has increased, and the sales price of commercial housing has fallen for four consecutive months. Negative growth for two consecutive years, coupled with the difficulty of developers' loans, the slow return of funds, and the aggravation of developers' financial risks. Developers are likely to transfer risks to construction companies. Under the current economic environment and credit policy, the financing of enterprises in all walks of life is very difficult, and the capital chain of construction enterprises is also tight. Under such a background, construction enterprises should not only prevent the risks brought by developers, but also prevent the internal capital chain of enterprises from breaking. In addition, they should also prevent the risks of material suppliers and suppliers from terminating contracts and the risks brought by affiliated units, how to prevent and solve the risk of rising prices of building materials and the legal risks of employment brought by labor service companies is an important subject for construction enterprises to study and explore.

The main legal risks faced by construction enterprises under the 2. real estate market regulation environment.

Under the current situation, the construction enterprise has four main aspects: first, the risk between the construction enterprise and the contractor.

(I) the risk between the contractor and the construction enterprise.

1, the relationship between the contractor and the contractor, from the construction project bidding has begun, the construction project bidding work will also be due to the following circumstances of the risk of disputes:

(1) If the bidding project must go through the project approval procedures in accordance with the relevant provisions of the state, the tenderer has not carried out the approval or the application for approval has not been approved, but illegally conducts the bidding activities. This will inevitably lead to the invalidity of the contract and bring losses to the construction enterprise.

(2) In order to be able to win the bid, the contractor blindly adopted a low-price bidding strategy, but in the actual construction, due to the price and other factors, the contractor felt that the project had no profit margin and asked for an increase in the project.

(3) Black and white contract risk issues.

The phenomenon of black and white contract is formed in the field of construction engineering in our country under the specific development stage and the specific social background, which has a hundred harms but no benefits. Because of its large number of existence, it has caused a large number of arrears of project payments, equipment and materials, and wages of migrant workers. In addition, the construction enterprises cut corners, reduce the material grade, reduce the project quality standards and other phenomena are also very common.

2, the risk of contract signing and performance.

As a construction enterprise, the general education level is not high, the lack of legal knowledge, risk awareness is not strong. This forms that each project department does not pay attention to the terms of the contract. When signing the contract, the owner's qualification, performance ability, and the scope of the contract are not reviewed in detail. Once problems arise, they are often at a disadvantage in litigation. The main risks are:

(1) After signing the contract, the construction enterprise finds that the project does not belong to the scope of bidding, or the bidding project has not passed the examination and approval of relevant departments.

(2) The risk of unclear agreement on the scope of work, settlement method, terms of reference of the authorized agent, duration terms, etc., which make up the important content of the contract.

3. Risk of progress payments being defaulted

In reality, there are three main manifestations of progress payment arrears:

(1) Clearly inform the construction enterprise that it is unable to pay.

(2) Less review, missed review, and more progress payments, such as deliberately not applying for visas and less review of progress payments.

(3) Developers to take in the intermediate acceptance, completion and settlement process to set up obstacles, so that the payment conditions are not mature.

The progress payment is in arrears, which will bring great economic and financial risks to the construction enterprises.

4. Risks of engineering visa

The main risk manifestations are;

(1) The visa is invalid due to the irregular subject of the visa. Some construction contracts will stipulate in detail the special personnel responsible for the visa issued by the employer and the contractor. For example, in the "Construction Contract for Construction Projects (Model Text)", special provisions are designed for the designation and authorization of the on-site representatives of both parties, and it is also clear that relevant matters can only be addressed"Engineer”Therefore, if the relevant project visa is not signed by the designated person, the validity of the project visa will be impaired even if the person signing the project is the contractor's staff.

(2) visa is not timely lead to claims obstacles. In real operation, when it is time to carry out a project visa, the two sides often only agree verbally and do not handle it in time, and finally rush to make up for it, and even in the process of settlement, they are still going through the visa formalities, which is very likely to cause unnecessary disputes and risks.

(3) The risk of signing a visa by malicious collusion between the representative of the construction unit and the representative of the construction enterprise.

5. Risks of advances

The main legal risks are:

(1) Risks arising from bank loans for advance construction. Part of the funds used by the contractor for advances may be its own funds, and the other part is usually through loans. Loans have to bear interest, if overdue can not repay the loan, but also to bear overdue penalty interest; and interest, penalty interest will increase the burden of construction enterprises.
(2) Risks arising from arrears of materials and equipment. In the case of advance construction, contractors often save upfront expenses by defaulting on materials and equipment in order to be able to reduce their capital investment. In this way, not only is it sometimes difficult to guarantee the quality of the materials and equipment purchased, but sometimes there is even a litigation risk of being recovered for the purchase of materials and equipment.

(3) Risks arising from disputes over arrears of labor costs due to advances. Often face the risk of suspension, recovery, litigation.
(4) Risks arising from market changes. In the process of advance, if the price of building materials generally rises, construction enterprises will face greater difficulties.
(5) Risks arising from the transfer of construction projects by the construction unit. If the contractor advances the construction to a certain extent or even completed, the construction unit will be the construction project or after the completion of the construction project transfer to others, still refuse to pay the project, and the contractor is not able to do a good job in advance of prevention or property preservation and other work, the interests of the contractor will also face the danger of being wasted.
(6) The risk of default arising from the contractor's inability to continue construction due to excessive advances. Once the contractor is unable to continue construction due to excessive advances, it is faced with the risk of raising funds for the construction of the project and the risk of liability for breach of contract to the contractor due to its own breach of contract. At this time, the pressure from material suppliers, equipment suppliers, construction workers, loan banks is increasing, the contractor will be in a huge dilemma.

6. Risk of claim

The claims of construction enterprises to the owners mainly include cost claims and duration claims. In the actual operation process, there are often such risks:

(1) Construction enterprises only pay attention to the intention of the claim, but do not pay attention to the collection of evidence of the claim, and ultimately can not get the support of the court.

(2) The Construction Contract (Model Text) has a large number of limitation periods for claims, such as the 28-day claim filing period, the expiration of the period, the right to claim is eliminated, which is very disadvantageous to the construction enterprise.[①]

(3) In the process of suing the contractor for the recovery of the project arrears, the contractor often files a counterclaim on the grounds of the quality of the project and the overdue project. Once the contractor's counterclaim is upheld by the court, the contractor will face greater risks.

7, the legal risk of delay.

In reality, there are many reasons for the risk delay of construction enterprises, which may be their own reasons, and may also be various factors such as the issuer's contract, weather, force majeure, etc. In many cases, it is often not the construction enterprise's own reasons, but because it does not pay attention to fixed evidence and exercise rights according to the contract, the employer counterclaims the contractor for the delay of the construction period when the contractor files a lawsuit, the contractor is likely to face a considerable amount of liquidated damages liability.

8, the legal risk of the project settlement stage.

(1) If the issuer and the contractor agree to adopt a fixed price settlement method, it means that the contractor has given up the possibility of settlement after completion, even if the price of raw materials, wage increases, changes in the contract design, etc., can not violate the contract agreement.

(2) In the process of settlement, the contractor delays the exercise of the right of priority compensation due to the contractor seeking various reasons to delay the settlement, resulting in the loss of that right.

9, the construction enterprise to give up the right of priority compensation risk. According to the principle of freedom of contract, if the contracting and contracting parties waive the right of priority compensation at the time of signing the contract, from a legal point of view, the contractor's waiver is valid. If the contractor is forced to give up the right of priority compensation due to the need of market competition, it will lay a hidden danger to the collection of the project price.

(II) the risks between construction enterprises and material suppliers, subcontractors and labor service companies.

1. Material suppliers and subcontractors sued the construction enterprise on the grounds of arrears, resulting in the account of the construction enterprise being sealed up and unable to maintain normal construction.

2. The material supplier and subcontractor have promised to bring the funds and sign the corresponding contract, but refused to bring the funds on the grounds of the change of situation, resulting in the construction stoppage.

3. The non-standard wage mechanism of construction enterprises in issuing migrant workers has led to some non-standard labor companies taking advantage of loopholes, causing migrant workers to make trouble and affecting the image of construction enterprises. At the same time, construction enterprises also need to spend a lot of money.

(III) the risk of the unit and the construction enterprise.

1, the attached unit based on the project formed by all the debt construction enterprises have the risk of paying off, because the attached unit does not have the corresponding construction qualification, it is entirely in the name of the construction enterprise foreign contracting business, can not independently assume responsibility.

2, the construction enterprise because the management fee of the attached income is illegal income should be fully collected, and the qualification of the construction enterprise is also facing the risk of cancellation or reduction.

3. As the affiliated person does not sign any contract with the construction worker, once he cannot get the salary, the construction worker can only find the construction enterprise registered for the record.

4, the construction contract is invalid, the affiliated person and the construction enterprise can not exercise the right of priority compensation of the project price.

(IV) the legal risks of construction enterprises under the project manager responsibility system.[②]

1, the project manager does not properly perform the construction project contract with the owner, resulting in delays or serious quality problems, resulting in the owner's claim;

2, the project manager illegal subcontracting, illegal subcontracting led to the owner to terminate the contract and claim;

3, in the completion of the settlement, the project manager in order to achieve personal purposes, delay the settlement or refuse to hand over the completion of the data caused by the construction enterprise can not be settled in a timely manner;

4, the project manager at will with others signed subcontracts, material supply contracts, there are large loopholes leading to the loss of construction enterprises or improper performance of the contract signed with subcontracting enterprises, material supply enterprises, resulting in disputes;

5. The project manager, out of malice, uses his authority and the seal of the project department he holds to collude with others to forge IOUs, or forge evidence materials for arrears of subcontracted works, materials, equipment rental and even wages of migrant workers, and then achieves the purpose of possessing the funds of the construction enterprise through litigation;

6, the project manager through false payment of subcontracted works, materials and other ways to obtain the project funds.

The main measures and countermeasures of 3. construction enterprises to deal with legal risks.

(I) The main measures and countermeasures for the risk between the construction enterprise and the contractor.

1. Risk prevention measures at the bidding stage

(1) Before bidding, conduct necessary investigation on the credit qualification status of the tenderee and the legality of the project.

(2) Pay full attention to the approval procedures of the bidding project, and determine whether the bidding project has been reviewed and approved by the relevant national departments.

(3) Carefully study the bidding documents, survey the site in detail, review the quantities of construction drawings, and fully study the trend of price increases of building materials when quoting, so as to leave a certain price space for oneself.

(4) Avoid the situation of blindly offering low prices in order to achieve the purpose of bidding.

(5) In terms of black-and-white contracts, if the construction enterprise is forced to sign a black contract due to the pressure of market competition, when new situations such as engineering design changes and planning index adjustment need to be supplemented during the construction process, the construction enterprise shall try its best to submit the supplementary agreement to the construction administrative department for filing for changes involving the substantive contents of the contract (including project price, quality, construction period, etc.). The supplementary agreement after filing can be used as the basis for settlement of the project price, so as to avoid more disputes and greater risks in the future. Construction enterprises are in a more passive position.

2, the contract signing, performance stage of risk prevention measures.

(1) Before signing the contract, the construction enterprise should pay attention to whether the project to be contracted belongs to the project that must be tendered in Article 3 of the Bidding Law, so as to avoid the invalidation of the contract signed by both parties due to the lack of bidding for the project that needs to be tendered.

(2) When signing a contract, we must carefully check the terms of the contract, make it clear, clear, reduce loopholes, prevent contradictions, in order to effectively protect their own interests in the event of disputes. In terms of the scope of the project, in addition to writing the name of the specific project, it is also necessary to specify the specific and detailed items and quantities, otherwise it is easy to confuse. In terms of project payment settlement, both parties may agree to adopt the actual settlement or fixed price settlement after completion. Article 16 of the interpretation of the Supreme People's Court on the application of legal issues in the trial of construction contract disputes stipulates: "if the parties have an agreement on the pricing standard or pricing method of the construction project, the project price shall be settled according to the agreement." Because the more detailed and accurate the settlement agreement between the two parties, the more helpful it is to protect their legitimate rights and interests.

(3) When the project contractor signs the contract, in addition to the general terms and special terms in the contract model stipulated by the state, it still has to attach various clauses and set some "traps", for which the construction enterprise should negotiate with the contractor on the elimination of the "trap" clause as far as possible.

3, progress payment is defaulted on the risk prevention measures.

(1) In the construction process, the construction enterprise should strengthen the contract performance management and strengthen the awareness of evidence. When the contractor requires the construction party to complete a project outside the contract, or when the construction party delays the construction period or increases the cost due to reasons that cannot be attributed to the construction party, the construction party shall promptly visa and retain evidence.

(2) When the progress payment is not in place on time and in full and other serious breach of contract by the contractor and no corrective measures, the construction enterprise should dare to suspend construction to avoid further expansion of losses.

(3) The financial department shall go through the preparatory work for the financial settlement procedures in advance, and shall, in strict accordance with the contract agreement and the progress of the project, prepare and submit the settlement application for the project progress price to the supervision engineer in a timely manner within the specified time limit, and at the same time urge the supervision engineer and the contractor to examine and sign the project progress price within the specified time limit. When the construction of the project comes to an end, the construction unit should shift the focus of its work to the preparation of relevant data on the final accounts for the completion of the project. At this time, relevant personnel from the departments of technical quality, planning contract, finance, material supply, etc. should be mobilized to form a final accounts team to clean up and summarize all kinds of visa data related to the contract quantities, design changes, etc. without unprepared battles.

4, engineering visa risk prevention measures.

(1) Regardless of whether the employer is a visa or not, the visa documents must be submitted to the employer and signed by the employer's staff. Most visas under the Construction Contract (Model Text) have a certain time limit, and if they are not filed within that time limit, the contractor may face the risk that subsequent claims will not be supported. If the employer's staff does not sign for it, the visa documents must be sent to the employer.

(2) Some construction units strictly require employees not to apply for visas. They are very resistant to documents with project visa forms and are not easy to obtain visas. However, they are not very vigilant about work contact forms, project contact letters, meeting minutes, etc. However, as long as both parties confirm, no matter what the name is, it belongs to the category of project visas. For such construction units, construction enterprises can obtain visas by means of work contact lists, engineering contact letters, meeting minutes, reports, memoranda, etc.

(3) Keep the evidence of workload, including on-site construction photos, videos, material purchase, admission records, etc.

(4) If the contractor refuses to apply for a visa after receiving the visa documents, it shall promptly submit to the other party in the form of an official letter from the enterprise, requesting the other party to apply for a visa within a certain period of time.

(5) If the other party still does not grant a visa after sending the letter, it may seek a third party such as the supervisor to confirm the quantities.

(6) If the amount of the visa certificate is large, and the other party refuses to sign the visa in violation of the contract, affecting the further development of the project and the payment of the project, the construction party may consider exercising the right of first performance defense in the contract law, and require the other party to perform the visa obligation first by means of work stoppage.

5. Risk prevention measures for advances

(1) Before deciding to advance funds, the construction enterprise shall investigate whether the owner has obtained the land use right, whether the planning permit has been obtained, whether the demolition work has been completed, etc., that is, whether the various procedures are complete.

(2) Investigate the performance ability and social reputation of the contractor to minimize the risk of advances.

(3) In the process of signing the construction contract for the construction project, it is necessary to clearly agree on the proportion of advances, the method of advances, the method of return, the period of return and other information, and the contract containing this content must be filed to avoid the occurrence of black and white contracts.

(4) Set up the contractor's project payment guarantee. Guarantees are provided for the contractor's advances by means of personal and physical insurance. At this stage can be mainly by the bank as the contractor to pay the guarantee of the main body, it is better to the contractor's basic account in the bank is better, in this way to limit the contract default project payment is undoubtedly a good way, in addition, can also use physical mortgage, reputable enterprise guarantee and other ways,.

(5) Carefully grasp the ratio of advances, if the amount of advances exceeds the capacity of the contractor to limit the difficulties, it is not worth the loss.

(6) When agreeing on the terms of the advance payment, the time of payment cannot exceed six months after the completion of the project, because the exercise period of the construction enterprise's priority compensation right for the construction project is six months, and if it exceeds six months, the construction enterprise's priority compensation right will be eliminated.[③]

6. Risk precautions for claims

(1) When the contractor refuses to accept the claim materials, it may be delivered by notarized mail or by EMS.

(2) Pay attention to the provisions of the contract on the statute of limitations of claims, the statute of limitations of claims is legally exclusive period, the claimant does not exercise the right to claim after the occurrence of the claim, the right to claim is eliminated, in the "construction contract (model text)" for the statute of limitations of claims has more clear provisions.

(3) Pay attention to the collection and storage of evidence materials for claims.

(4) Be prepared to respond to counterclaims. First of all, we must analyze our own performance, if there is a more serious breach of contract, then in the choice of litigation should be careful, it is best to use consultation and mediation to resolve. If you intend to take litigation to resolve, it is necessary to anticipate the contracting party's counterclaim and take active measures to deal with it.

7, the duration of the delay of the legal risk prevention measures.

(1) The construction unit shall actively collect all kinds of evidence affecting the construction period. Common influencing factors are: the construction phase, such as the delay in obtaining the construction permit, the delay in the previous process, the delay in the construction drawing review, the owner's instruction to postpone the start of construction, weather reasons, force majeure, etc.; during the construction process, such as late payment, late delivery of drawings, engineering changes (including rework) and so on.

(2) Strictly handle the duration visa or duration claim against the procedural elements agreed in the contract to avoid overdue loss of rights.

(3) Strictly review the bidding documents at the bidding stage, and strictly check the content of increasing one's own obligations to avoid careless commitments to achieve the purpose.

(4) For the 1999 version of the contract, there are 30 visa clauses and 21 claim clauses, and the exercise period of the visa and claim should be checked by a person, and the right should not be lost because of the delay.

8, the project settlement stage of the legal risk prevention measures.

(1) Strengthen contract management, agree on the important economic interests of both parties to the contract in the contract, and complete the important terms such as project completion settlement and project payment as far as possible.

(2) Do a good job of project acceptance in a timely manner. When the contractor completes the agreed project, it shall provide the contractor with the completion materials within the agreed time.

(3) Because of the change of engineering design, the contractor requires the contractor to complete the sporadic works other than the construction contract, which leads to the adjustment of the project price. The contractor's work results should be fixed in time.[④]

(4) Changes in the content of the contract shall be filed in a timely manner.

(5) When the construction enterprise signs the contract with the employer, a fixed price is agreed. In the actual performance of the contract, the construction enterprise often bears great risks. If the construction enterprise requests to increase the project price at this time, the reason can only be based on the legal provisions of the change of circumstances. Article 26 of the Contract Law (Interpretation 2) implemented on May 13, 2009: after the establishment of the contract, there has been a major change in the objective circumstances that the parties could not foresee at the time of the conclusion of the contract and was not caused by force majeure, and the continued performance of the contract is obviously unfair to one party or cannot achieve the purpose of the contract. If the parties request the people's court to modify or terminate the contract, the people's court shall, in accordance with the principle of fairness and the actual situation of the case, determine whether to modify and terminate the case. However, in judicial practice, the application of the principle of change of circumstances is often very cautious. According to the principle of fairness, it is relatively abstract and difficult to grasp. Even if the principle of change of circumstances can be applied, the procedure is quite complicated. In addition, according to Article 22 of the Interpretation of the Supreme People's Court on the Application of Legal Issues in the Trial of Disputes over Construction Contracts of Construction Projects, the parties agree to settle the project price at a fixed price, if a party requests an appraisal of the cost of the project, it shall not be supported. This also reflects the principle and attitude of the Supreme People's Court on the fixed price agreed in the construction contract. Therefore, if the construction enterprise wants to increase the project price, it is not necessary to apply the principle of change of circumstances through reasons such as the price increase of construction materials. Other reasons can be found, such as the employer's major breach of contract and delay of construction period in the process of contract performance, which may get better support.

9, the construction enterprise to give up the right of priority compensation risk prevention measures.

(1) The construction enterprise may waive the right of priority compensation on a conditional basis, such as agreeing in the contract that "the contractor shall pay the project in full and on time in accordance with the agreed payment method.[⑤]

(2) The construction enterprise may organize and collect some evidence, including bidding documents, bidding documents, letters requested by the developer to give up, written replies disagreed by the construction unit, minutes of meetings and other documents, and apply to the court for the right of revocation when the developer's financial situation is not good.

(3) Let the developer propose a letter of guarantee for the payment of the project, a physical mortgage, a reputable enterprise guarantee and other forms.

(4) Through internal communication and specific text content, it is stipulated that the construction enterprise only gives up the priority against the bank and does not give up the priority against other enterprises.

(II) risk prevention measures between construction enterprises and material suppliers, subcontractors and labor service companies.

1, actively and material suppliers, subcontractors to negotiate, for longer payment period and lower deferred payment interest.

2, the material suppliers, subcontractors may take siege, blocking doors and other radical means, formulate a good plan, unified implementation in accordance with the plan, to avoid the spread of the incident, that is, there should be relevant departments specifically to deal with such problems.

3, looking for a good reputation, strength, stability of the labor subcontracting company. To do a good job in labor management, labor management mainly includes three aspects of management, one is labor bidding management, the second is labor contract management, and the third is the on-site management of the labor team. At present, the labor bidding management market is quite chaotic. There is no clear bidding method and process. Many of them are directly selected and have not been inspected. The labor teams selected in this way have problems of one kind or another. For example, some labor companies undertake business in the name of foreign labor companies, which are actually affiliated, some intermediaries collect benefits from them, and some subcontract the project. In such an environment, the bidding work of construction enterprises must be standardized. First, the bidding documents should be drafted, the bidding process should be determined, and labor service companies should be invited to bid. Second, the quality should be strictly controlled. The ability, reputation and comprehensive management ability of labor companies should be fully understood. Only in this way can the labor bidding management be well done. In the management of labor contracts, we must adhere to the principles of meticulous, systematic and dynamic, and should clearly agree on the contents of labor subcontracting, project quality standards, duration, price methods, engineering quantity measurement, settlement, change and termination of labor subcontracting contracts, dispute resolution and relief, and the rights and obligations of both parties. In the field management of the labor team, improve the basic quality of management personnel, and establish its own set of labor team on-site management system. Special attention should be paid to the issue of migrant workers' wages. There is a set of special models for migrant workers to handle standardized entry and exit cards. It is best for migrant workers to make registration information when entering the site, and make payroll according to this registration information and confirm it by relevant personnel. Documents such as these payroll are sealed by government departments and announced on the construction site for more than 3 days, in this way, the accuracy of wages will be higher, and then our construction enterprises will take photos of the announcement for retention. The announcement should put the name of this project in it, because usually the general contractor and the labor subcontractor have cooperation in different construction sites, it is best to reflect it more accurately and clearly indicate the personnel and amount of these payroll; When paying wages, it is best not to type directly into the card but to ensure that it is sent to the corresponding person as much as possible. In addition, wages should not be paid as the general contractor, but in the name of the labor service company, because the general contractor has no direct labor relationship with migrant workers.[6]

(III) the risk prevention measures of the unit and the construction enterprise.

Although the act of affiliation is expressly prohibited by law, in reality, it is very difficult to put an end to such phenomena. Therefore, the affiliated enterprises should have a clear understanding of these risks and take corresponding preventive measures.
1. Strengthen the strict investigation of the capital strength, construction management level and integrity of the affiliated personnel, and strictly control the affiliated personnel. Allowing to be attached is not only a favorable way for construction enterprises to create benefits, but also the key and difficult point of risk control of construction enterprises. If the capital strength of the affiliated personnel is not strong, it is very easy to cause labor disputes and material disputes in the construction. If the construction level of the affiliated personnel is poor, it is very easy to cause poor construction quality, which will lead to a series of problems such as construction period, quality, project payment, etc. If the construction conditions of the affiliated project are extremely harsh, it is also easy to cause shutdown, slowdown and other phenomena, making the construction unable to proceed normally. Therefore, the affiliated enterprise strictly examines the affiliated person, which is the most economical and direct measure to avoid the risk of affiliation.
2. Strengthen the project seal management. Many project managers now have seals. In practice, it is often the case that the contract stamped with the project seal is recognized as an apparent agent, requiring the affiliated enterprise to bear joint and several liability. In order to avoid this risk, the affiliated enterprise should make it clear that the project chapter is limited to technical exchanges, such as in brackets on the seal.
3. Strengthen the management of external construction materials, project subcontracting and labor subcontracting of the affiliated party, supervise the payment of arrears by the affiliated party, and prevent the construction from affecting the affiliated party.
4. In order to restrict the project's affiliation, a guarantee or payment of a guarantee shall be required.

(IV) the legal risk prevention measures of construction enterprises under the project manager responsibility system.[⑦]

1Strict project manager selection system and personnel system

To avoid the project manager“affiliated”or“Subcontracting”For suspected violations of laws and regulations such as projects, the construction enterprise shall appoint employees of the enterprise who have legal labor relations with the enterprise as project managers, sign formal labor contracts with them, go through social insurance procedures, and transfer the qualification certificate of the project manager to the enterprise.

2Establish an effective incentive and restraint mechanism

On the one hand, it is necessary to reasonably determine the proportion of the project manager's participation in the distribution of excess profits or give a certain amount of corporate equity incentives; on the other hand, it is necessary to constrain the power of the project manager, establish an effective supervision mechanism, and increase the cost of default for the project manager.

3Determine the reasonable scope of authorization of the project manager

In the delegation of authority to the project manager, some matters that are significant or inappropriate for his decision are expressly excluded. Such as amendments and changes to construction contracts, major subcontracting matters, procurement of major materials and equipment, external borrowing or provision of guarantees.

4Strictly regulate internal contracting of project manager

(1) Sign a valid internal contract. The project manager must be an employee of the construction enterprise and have a legal labor relationship with the construction enterprise, otherwise it may be found by the court.“affiliated”or subcontracting.

(2) Determine a reasonable contracting factor. To enable the project manager to obtain a reasonably satisfactory contract income after proper performance of the contract agreement. Some enterprises for their own economic benefits or pass on the risk of low bid prices, determine a higher contracting factor, even if the project manager properly perform the contract, will still lose money. This will inevitably lead to the project manager to take illegal means to obtain project funds or by reducing the quality of construction, cutting corners to obtain benefits, and ultimately the construction enterprise is not worth the loss.

(3) Determine the terms of detailed and reasonable liability for breach of contract and the amount of breach of contract to be borne by the contractor, increase the penalties for breach of contract by the project manager, and increase the cost of breach of contract by the project manager.

(4) The detailed measures for the management of the project department of the construction enterprise team shall be stipulated, and the management of the project and the project manager shall be strengthened.

5Strengthen the management of project funds to prevent misappropriation of funds or arbitrage of funds

Especially for projects contracted internally by the project manager, it is required that the project funds must be credited to the company's account, and the project funds cannot be arbitrarily disposed of by the project manager after deducting the management fee. The construction enterprise monitors the use of funds, and the project manager provides the details of the use of funds. Strengthen the cost control of the project, according to the project progress against the cost progress, the cost expenditure of the classification item shall not be greater than the cost control index. The contract and payment basis shall be provided for the payment of materials and subcontracted works. These measures can effectively reduce the occurrence of the project manager's collusion with others to sue the construction enterprise in the name of material payment and project payment.

63. Strengthen the management and control of the use of the seal of the Project Department, and mark the right restriction mark on the surface of the seal of the Project Department if necessary.

71. Strengthen the management of construction data and financial data. It is best for construction companies to retain a complete set of information formed during the construction process.

Since 2012, developers have gone bankrupt, and house prices in most cities have fallen month-on-month. Under the condition that the country's real estate regulation and control policies show no signs of loosening, the central bank has lowered the RMB deposit reserve ratio by 0.5 percentage points, the interest rate for the first suite of large banks has been reduced to 8.5 percent, the second and third tier cities have raised the provident fund loan quota, and the Ministry of Land and Resources has begun to focus on the management of small property rights, these fine-tuned policies can be seen that the country's real estate control policies are mainly to curb investment speculative demand and support the demand for self-occupied rigid housing purchases. Construction companies should pay attention to changes in control policies in a timely manner, and continuously regulate their own operation, management systems and behaviors. Continuously improve their own ability to prevent and reduce risks. (Word count 11375)

[①]Li Na Li Gang: "Legal Risk Control of the Whole Construction Project" Law Press, 2011, p. 146.

[②]The project manager is responsible for the legal risk prevention of construction enterprises under the system.http://www.suobei.com.cn/ContentInfo.aspx?ContentTypeID = 1 & ContentID = 1802 & page = 2Visited on April 20, 2012

[3]Li Na Li Gang: "Legal Risk Control of the Whole Construction Project" Law Press, 2011, p. 146.

[4]Articles 9-10 of the Interim Measures for the Settlement of Construction Project Prices [Caijian 2004] No. 369.

[5]Li Na Li Gang: "Legal Risk Control of the Whole Construction Project" Law Press, 2011, p. 445.

[6]Construction Business Research Committee:Guidelines on Legal Risk Prevention for Construction EnterprisesCloth meeting"CurrentA summary of the seminar on the risks that construction enterprises may highlight under the situation and their resolution and prevention, January 6, 2012.

[⑦]Refer to the Legal Risk Prevention of Construction Enterprises under the Project Manager's Responsible System.http://www.suobei.com.cn/ContentInfo.aspx?ContentTypeID = 1 & ContentID = 1802 & page = 2Visited on April 20, 2012

Key words:

Analysis of the problem of state-owned farm land being recovered by the government in China

The legal issues involved in the pricing principle in the construction contract of the construction project are analyzed.

Analysis of the problem of state-owned farm land being recovered by the government in China

The legal issues involved in the pricing principle in the construction contract of the construction project are analyzed.