【Title】Property Law of the People's Republic of China
【Document No.】Order No. 62 of the President of the People's Republic of China
【Promulgation Date】2007-03-16
【Effective Date】2007-10-01
【Repealed Date】
【Promulgation Body】National People's Congress;Land Law
【Status】Effective
【Status Description】

【Full Text】

   
     
The "Property Law of the People's Republic of China" was adopted at the Fifth Session of the Tenth National People's Congress on March 16, 2007. This Law is hereby promulgated and shall be effective as of October 1, 2007.
 
Hu Jintao
President of the People's Republic of China
March 16, 2007
 
 
 
 
 
PART I  GENERAL PROVISIONS
 
 
Chapter 1  Basic principles
 
 
Article 1
 
This Law is hereby formulated according to the Constitution for the sake of safeguarding the basic economic system of the State and the order of socialist market economy, ascertaining the attribution of things, bringing into play the usefulness of things and protecting the property rights of the obligees.
 
Article 2
 
This Law shall govern the civil relationships stemming from attribution and use of things.
 
The things as mentioned in this Law shall include realties and chattels.  Where there are other laws prescribing that rights shall be the object of the property, those laws shall be followed.
 
The property rights as mentioned in this Law shall refer to the rights of the obligees to directly control specific things to the exclusion of others, which shall include ownership, right of usufruct, and security interest.
 
Article 3
 
In the primary stage of socialism, the State shall uphold the basic economic system by keeping public ownership dominant and having the economic sectors of diverse forms of ownership to develop side by side.
 
The State shall consolidate and develop the economic sector of public ownership, and encourage, support and guide the development of the economic sector of non-public ownership.
 
The State shall practice socialist market economy, the equal legal status and the right to development of all the subjects of the market shall be safeguarded.
 
Article 4
 
The property rights of the State, collectives and individuals and the property rights of other obligees shall be under legal protection, no entity or individual may infringe on them.
 
Article 5
 
The types and contents of property rights shall be prescribed by laws.
 
Article 6
 
For the creation, alteration, assignment or elimination of the property rights of realties, registration thereof shall be completed according to the provisions of law. For the creation and assignment of the property rights of chattels, the chattels shall be transferred according to the provisions of law.
 
Article 7
 
The acquisition and exercise of property rights shall abide by the law. Morals of the society shall be respected, and it shall not prejudice the public interests and the legitimate rights and interests of others.
 
Article 8
 
Where there are provisions in other laws governing the property rights, those laws shall be followed.
 
 
Chapter 2  Creation, Alteration, Assignment or Elimination of Property Rights
 
 
Section 1  Registration of Realties
 
 
Article 9
 
For the creation, alteration, assignment or elimination of the property rights of realties, registration thereof shall be completed according to law for giving them legal effect. Unless otherwise stated in the provisions of law, no legal effect will be given if the registration has not been completed.
 
With respect to the natural resources owned by the State according to law, it is optional for the ownership thereof not to go through the registration process.
 
Article 10
 
The registration of realties shall be completed in a registration institution where the realties are situated.
 
The State shall implement a unified realties registration system. The scope, registration institutions and registration measures of the unified registration shall be prescribed by laws and administrative regulations.
 
Article 11
 
The party filing an application for registration shall, according to the different registration matters, submit a certificate showing the ownership of realty and other necessary materials such as the location and area of the realty.
 
Article 12
 
A registration institution shall perform the following duties:
 
(1) examine the certificate showing the ownership of realty and other necessary materials submitted by the applicant;
 
(2) inquire the applicant in relation to registration matters;
 
(3) register the relevant matters factually and promptly; and
 
(4) other duties as prescribed by the laws and administrative regulations.
 
Where the relevant situations of the chattel subject to the application for registration need to be proved further, the registration institution may require the applicant to submit additional materials and, if necessary, carry out a site visit to the chattel.
 
Article 13
 
A registration institution shall not conduct the following activities:
 
(1) require appraisal to the realty;
 
(2) conduct duplicated registration in the name of annual examinations, etc.; and
 
(3) other conducts beyond the scope of the registration duties.
 
Article 14
 
Where registration shall be carried out in respect of the creation, alteration, assignment or elimination of the property rights of chattels according to the provisions of law, the effectiveness thereof shall come into force once the entries have been made in the register of realties.
 
Article 15
 
Unless otherwise stated in the provisions of law or stipulated in the contract, a contract for the creation, alteration, assignment or elimination of property rights concluded between the parties concerned shall come into force at the time of conclusion; the effectiveness of the contact shall not be prejudiced despite of the failure of completing the registration process of the property rights.
 
Article 16
 
The register of realties shall form the basis with regard to the attribution and contents of the property rights. The register of realties shall be managed by the registration institution.
 
Article 17
 
The certificate showing the ownership of realty is the proof of entitlement to ownership of that realty by the obligee. The matters entered in the certificate showing the ownership of realty shall be consistent with the register of realties. In the event of inconsistency, the register of realties shall prevail, unless it is proven with evidence that the register of realties is wrong.
 
Article 18
 
A registration institution shall provide the registration information to the obligee or the interested party if he makes enquiries or duplication thereof.
 
Article 19
 
If an obligee or interested party is of the opinion that the matters entered in the register of realties are wrong, he may apply for rectification of the registration. The registration institution shall make the rectification if the obligee as entered in the register of realties consents, in writing, to the rectification or it is proven with evidence that the register of realties is wrong.
 
If the obligee as entered in the register of realties objects to the rectification, the interested party may apply for an objection registration. After the completion of the objection registration with the registration institution, the effectiveness of such registration shall cease if the applicant fails to bring an action within 15 days since the date of completing the objection registration. If prejudice is caused to the obligee by the inappropriateness of the objection registration, the obligee may seek damages from the applicant.
 
Article 20
 
Where the parties concerned have concluded a sale and purchase agreement on a house or other agreements on the property rights of any other realties, they may, for the purpose of securing the realization of the property rights in the future, file an application to the registration institution for advance notice registration according to the stipulations. After the completion of the advance notice registration, no effect will be given to the property rights if disposition is made to the realty without the consent of the obligee in the advance notice registration.
 
After the completion of advance notice registration, the effectiveness of the advance notice registration shall cease if the creditor's rights are eliminated or the registration is not applied for within 3 months since the date when the realty registration can be applied for.
 
Article 21
 
A party shall assume the liability of compensation if he submits fraudulent materials for application of registration and others are prejudiced as a result.
 
A registration institution shall assume the liability of compensation for the mistaken registration if others are prejudiced as a result. After the compensation has been made by the registration institution, it can seek redress from the one who has resulted in the mistaken registration.
 
Article 22
 
The registration fee of realty shall be charged per item, it shall not be charged with reference to the area, volume, or pricing ratio of the realty, the specific charging standards shall be prescribed by the competent department in charge of pricing in collaboration with the relevant department of the State Council.
 
 
Section 2  Delivery of Chattels
 
 
Article 23
 
The creation and assignment of the property rights of a chattel shall come into force at the time of delivery, unless it is otherwise stated in the provisions of law.
 
Article 24
 
The creation, alteration, assignment or elimination of the property rights over vessels, flight vehicles and motor vehicles shall not be used against a bona fide third party if it is not registered.
 
Article 25
 
If the obligee has already possessed the chattel prior to the creation and assignment of the property rights of the chattel, the property rights thereof shall come into force at the time when the legal conducts comes into effect.
 
Article 26
 
If a third party has already possessed the chattel according to law prior to the creation and assignment of the property rights of that chattel, the person charged with the delivery obligations may request the third party to return the rights over the originals by assignment in place of delivery.
 
Article 27
 
At the time of assignment of the property rights of a chattel, if both parties have also prescribed that the assignor shall continuously possess that chattel; the property rights thereof shall come into force since the prescribed time of effectiveness.
 
 
Section 3  Other Provisions
 
 
Article 28
 
Where the property rights are created, altered, assigned or eliminated as a result of the legal documents of the people's courts or arbitration committees or the decisions of expropriation of the people's governments, the property rights thereof shall come into force since the effectiveness of the legal documents or decisions of expropriation of the people's governments, etc.
 
Article 29
 
Where the property rights are acquired by means of inheritance or bequest, the property rights thereof shall come into force since the commencement of inheritance or bequest.
 
Article 30
 
Where the property rights are created or eliminated owing to the factual conducts such as the construction or demolition of houses by legal means, the property rights thereof shall come into force since the accomplishment of the factual conducts.
 
Article 31
 
Where the property rights of the realty can be enjoyed or disposed of according to the provisions under Articles 28-30 of this Law, the property rights thereof shall be registered promptly in accordance with the provisions of law if the law requires so. No legal effect will be given to the property rights if the registration has not been completed.
 
 
Chapter 3  Protection of Property Rights
 
 
Article 32
 
If the property rights have been infringed upon, the obligee may resolve it through settlement, mediation, arbitration or litigation, etc.
 
Article 33
 
If a dispute arises from the attribution and contents of the property rights, the interested party may request for affirmation of rights.
 
Article 34
 
Where a person has no right to possess the realty or chattel, the obligee may ask for the return of the originals from that person
 
Article 35
 
Where the exercise of the property rights is hindered or likely to be hindered, the obligee may demand for elimination of the hindrance or risks.
 
Article 36
 
Where damage is caused to the real state or chattels, the obligee may demand for repair, reconstruction, replacement or restoration to the real state or chattels.
 
Article 37
 
If the property rights have been infringed upon and prejudice is caused to the obligee as a result, the obligee may seek damages from the infringer. The obligee may also request for assumption of other civil liability by the infringer
 
Article 38
 
The manners of protection of the property rights as prescribed in this Chapter can be adapted in isolation; they can also be adapted in combination in light of the situation of infringement to the rights.
 
Apart from assuming the civil liability, the infringer having infringed the property rights in violation of the provisions of administrative management shall also assume the administrative liability according to law; his criminal liability shall be investigated if a criminal offence is constituted.
 
 
PART II  OWNERSHIP
 
 
Chapter 4  General Provisions
 
 
Article 39
 
The person enjoying the ownership shall be entitled to enjoy the rights of possession, utilization, proceeds collection and disposition with respect to his own realty and chattel according to law.
 
Article 40
 
The person enjoying the ownership shall have the right to create the right of usufruct and security interest on his own realty and chattel. The rights and interests of the person enjoying the ownership shall not be prejudiced by the exercise of rights by the usufructuaries or the persons enjoying the security interest.
 
Article 41
 
No entity or individual is allowed to acquire the ownership of the realty or chattel which can only be owned exclusively by the State according to the provisions of law.
 
Article 42
 
For the need of public interests, the collectively-owned land, the houses of the entities and the individuals as well as other realties may be expropriated according to the limits of power and procedures as prescribed by laws.
 
When the collectively-owned land is being expropriated, the collective owners thereof shall receive compensation in full according to law, which shall include land compensation fees, resettlement subsidies, and compensation for the attachments and seedlings on the land. The social security fees shall be arranged for the peasants whose land is subject to expropriation, thereby protecting the livelihoods and safeguarding the legitimate rights and interests of the peasants whose land is subject to expropriation.
 
When the houses of the entities and the individuals as well as other realties are being expropriated, the owners thereof shall get compensated for demolishment and relocation according to law, thereby safeguarding the legitimate rights and interests of the owners whose realties are subject to expropriation; when the houses of the individuals are being expropriated, the owners thereof shall also have their conditions of domicile secured.
 
No entity or individual shall embezzle, misappropriate, illegally share, withhold or pay in default the compensation for expropriation or other fees.
 
Article 43
 
The State shall provide special protection for cultivated land through strictly restricting the transformation of land for agriculture into land for construction and keeping under control the total amount of land used for construction. No entity shall expropriate collective-owned land by exceeding the limits of power or in violation of the procedures as prescribed by laws.
 
Article 44
 
For the urgent needs such as the rushing to deal with emergencies or rescue in disasters, the realties or chattels of the entities or individuals can be expropriated according to the limits of power and procedures as prescribed by laws. The expropriated realties or chattels shall be returned to the owners after use. Compensation shall be made to the individuals for their expropriated realties or chattels or if their realties or chattels are damaged or lost after the expropriation.
 
 
Chapter 5  State Ownership, Collective Ownership and Private Ownership
 
 
Article 45
 
The properties that shall be owned by the state as prescribed by law shall be owned by the State, that is, by all people.
 
The ownership of the State-owned properties shall be exercised by the State Council on behalf of the State; unless it is otherwise prescribed by law, which shall then be followed accordingly.
 
Article 46
 
Mineral resources, water flow, maritime space shall be owned by the State.
 
Article 47
 
Urban land shall be owned by the State. The land in the rural villages and suburban areas that shall be owned by the State as prescribed by law shall be owned by the State.
 
Article 48
 
Natural resources including forests, mountains, grassland, barren land, beaches and shoals shall be owned by the State, unless it is prescribed by other laws that they shall be collectively-owned.
 
Article 49
 
The resources of wild flora and fauna that shall be owned by the State as prescribed by law shall be owned by the State.
 
Article 50
 
The radio frequency spectrum resources shall be owned by the State.
 
Article 51
 
The cultural relics that shall be owned by the State as prescribed by law shall be owned by the State.
 
Article 52
 
The assets for the national defense shall be owned by the State.
 
The infrastructures including railways, roads, electricity facilities, telecommunication facilities and pipes and conduits for patrols and gases that shall be owned by the State as prescribed by law shall be owned by the State.
 
Article 53
 
The State authorities shall enjoy the rights of possession and utilization, together with the rights of disposition pursuant to the relevant provisions of law and the State Council with respect to the realties and chattels under his direct control.
 
Article 54
 
The public institutions organized by the State shall enjoy the rights of possession and utilization, together with the rights of proceeds collection and disposition pursuant to the relevant provisions of law and the State Council with respect to the realties and chattels under their direct control.
 
Article 55
 
For enterprises established by means of State's investment, the State Council and the local people's governments shall represent the State respectively to perform the duties as capital contributors and enjoy the rights and interests as capital contributors of the enterprises pursuant to the provisions of law and administrative regulations.
 
Article 56
 
The property owned by the State shall be under legal protection, any illegal possession, looting, illegal sharing, withholding or destruction of such property by any entity or individual is prohibited.
 
Article 57
 
The authorities and their staff members in charge of performing the duties of administration of and supervision over State-owned property shall strengthen the management of and supervision over the State-owned property, facilitate the maintenance and appreciation to the value of the State-owned property, and prevent loss to the State-owned property according to law. Where in performing their duties of administration of and supervision over State-owned property, the authorities and their staff members cause loss of State-owned property due to their abuse of power or dereliction of their duties, they shall assume legal liability according to law.
 
Any entity or individual that, in violation of the provisions on management of State-owned property, causes loss of State-owned property by transferring it at a low price, illegally sharing it in conspiracy with others, placing a charge over it without authorization, or by other means in the course of restructure of the enterprise, merger or division of the enterprise, or affiliated transaction, etc., shall assume legal liability according to law.
 
Article 58
 
The collectively-owned realties and chattels shall include:
 
(1) collectively-owned land, forests, mountains, grassland, barren land, beaches and shoals as prescribed by laws;
 
(2) collectively-owned buildings, production facilities, farmland and irrigation facilities;
 
(3) collectively-owned educational, scientific, cultural, hygienic, and sports facilities, etc.; and
 
(4) other collectively-owned realties and chattels.
 
Article 59
 
The realties and chattels that are collectively owned by peasants shall be collectively owned by all the members of the collective.
 
The following matters shall be decided by the members of the collective in accordance with the statutory procedures:
 
(1) Proposal on the contractual management of land, and proposal of issuing the contractual land to entities or individuals other than the collective for contractual management;
 
(2) Adjustment of the contracted land between individual persons enjoying the right to contractual management of land;
 
(3) Measures for the utilization and distribution of fees such as the land compensation fees;
 
(4) Matters such as the alteration of ownership of the enterprises established with the capital contributions by the collective; and
 
(5) Other matters as prescribed by the laws.
 
Article 60
 
With respect to the collectively-owned land, forests, mountains, grassland, barren land, beaches and shoals, etc., the ownership thereof shall be exercised according to the following provisions:
 
(1) for those collectively owned by peasants, the ownership thereof shall be exercised on behalf of the collective by the collective economic organization or the villagers' committee in the village;
 
(2) for those collectively owned by two or more peasants respectively in a village, the ownership thereof shall be exercised on behalf of the collective by the collective economic organizations or the villagers' group in the village; and
 
(3) for those collectively owned by peasants in a township or a town, the ownership thereof shall be exercised on behalf of the collective by the economic organization in that township or town.
 
Article 61
 
The urban collective shall enjoy the rights of possession, utilization, proceeds collection and disposition with respect to its realties and chattels according to the provisions of the laws and administrative regulations.
 
Article 62
 
A collective economic organization, villagers' committee or villagers' group shall announce the collectively-owned property conditions to the members of the collective in accordance with the laws, administrative regulations, articles of association, village regulations and pledges of the villagers.
 
Article 63
 
The collectively-owned property shall be protected by law, any illegal possession, looting, illegal sharing or destruction by any entity or individual is prohibited.
 
If the decisions of the collective economic organization, villagers' committee or their persons-in-charge infringe upon the legitimate rights and interests of the members of the collective, the infringed member of the collective may petition to the people's court to quash the decisions.
 
Article 64
 
The individuals shall be entitled to enjoy ownership of their realties and chattels including lawful incomes, houses, daily necessities, tools for production, and raw materials.
 
Article 65
 
The lawful private savings, investments and the proceeds derived therefrom shall be under legal protection.
The State shall protect individuals to inheritance and other legitimate rights and interests according to the provisions of law.
 
Article 66
 
The lawful property of the individuals shall be under legal protection, any illegal possession, looting or destruction of such property by any entity or individual is prohibited.
 
Article 67
 
The State, collectives and individuals may establish limited liability companies, companies limited by shares or other enterprises according to law. Where the realties and chattels owned by the State, collectives and individuals are invested into the enterprises, the capital contributors shall be entitled to enjoy the rights including the collection of proceeds derived from the assets, making of significant decisions and selection of administrators in charge of the operation and perform the obligations in accordance with the stipulations or the ratio of capital contribution.
 
Article 68
 
The corporate enterprises shall be entitled to enjoy the rights of possession, utilization, proceeds collection and disposition with respect to their realties and chattels according to the laws, administrative regulations and articles of association. For legal persons other than the corporate legal persons, their rights with respect to their realties and chattels shall be governed by the relevant provisions of the laws, administrative regulations and articles of association.
 
Article 69
 
The realties and chattels lawfully owned by the social organizations shall be under legal protection.
 
 
Chapter 6  Condominium Right of the Owner
 
 
Article 70
 
The owners shall be entitled to enjoy the ownership over the exclusive parts within a building, such as the residential units and the units for business purposes; they shall be entitled to enjoy the rights of co-ownership and joint management over the common parts other than the exclusive parts of the building.
 
Article 71
 
The owners shall be entitled to enjoy the rights of possession, utilization, proceeds collection and disposition over the exclusive parts of the building; however, they shall not, when exercising their rights, endanger the safety of the building or prejudice the legitimate rights and interests of other owners.
 
Article 72
 
The owners shall enjoy the rights and perform the obligations over the common parts other than the exclusive parts of the building. They cannot refuse to perform the obligations by disclaiming their rights.
 
Where the owners assign the residential units and the units for business purposes in the building, the rights of co-ownership and joint management over the common parts of the building shall also be assigned altogether.
 
Article 73
 
Except the public roads in the cities and towns, the roads situated in the building zone shall be co-owned by the owners. Except the green land owned by the cities and towns or owned expressly by the individuals, the green land situated in the building zone shall be co-owned by the owners. Other public places, public facilities and houses for the property services situated in the building zone shall be co-owned by the owners.
 
Article 74
 
The parking spaces and garages that are situated in the building zone and planned for parking of cars shall be used to satisfy the needs of the owners.
 
The attribution of the parking spaces and garages that are situated in the building zone and planned for parking of cars shall be stipulated by the parties concerned by means of sale, giveaway or leasing, etc.
 
The parking spaces occupying the roads or other places which are co-owned by the owners and used for parking of cars shall be co-owned by the owners.
 
Article 75
 
The owners may hold owners' assemblies for election of owners' committees.
 
The relevant authorities of the local people's governments at the county level or above shall give guidance and assistance for the establishment of owners' assemblies or election of owners' committees.
 
Article 76
 
The following matters shall be jointly decided by the owners:
 
(1) formulate and amend the rules of procedure of the owners' assembly;
 
(2) formulate and amend the management rules and contracts for the building and its ancillary facilities;
 
(3) elect or replace the members of the owners' committee;
 
(4) select, engage and dismiss property services enterprises and other administrators;
 
(5) raise and utilize the funds for the maintenance of the building and its ancillary facilities;
 
(6) modify or redevelop the building and its ancillary facilities; and
 
(7) other significant matters related to co-ownership or joint management.
 
In deciding the matters as stipulated in items (5) & (6) in the preceding paragraph, consent has to be obtained from at least two-thirds of the owners whose exclusive parts are occupying at least two-thirds of the total area in that building; whereas in deciding other matters in the preceding paragraph, consent has to be obtained from at least half of the total number of owners whose exclusive parts are occupying at least half of the total area in that building.
 
Article 77
 
No owner may turn a residential unit into a unit for business purposes in violation of the laws, rules and regulations and the management rules and contracts. If an owner intends to turn a residential unit into a unit for business purposes, he shall, apart from abiding by the laws, rules and regulations and the management rules and contracts, should have obtained the consent from the interested owner.
 
 
Article 78
 
The decisions of the owners' assemblies and the owners' committees are binding to owners.
 
If the decisions of the owners' assemblies and the owners' committees infringe upon the legitimate rights and interests of the owners, the infringed owners may petition to the people's court to quash the decisions.
 
Article 79
 
The funds for the maintenance of the building and its ancillary facilities are co-owned by owners; upon the joint decisions of owners, the funds can be used for the maintenance of the common parts such as lifts and water tanks. The raising and utilization situations of the maintenance fund shall be announced.
 
Article 80
 
The matters including the sharing of capital contribution and allocation of proceeds of the building and its ancillary facilities shall be governed by the stipulations, if any. Where they are neither specified nor specified unequivocally in the stipulations, they shall be determined according to the ratio of the exclusive parts to the total area of the building occupied by the owners.
 
Article 81
 
The owners may manage the building and its ancillary facilities on their own, or they may entrust the management responsibilities to the property services enterprises or other administrators.
 
The owners shall have the right to replace the property services enterprises or other administrators engaged by the construction unit according to law.
 
Article 82
 
The property services enterprise or other administrator shall manage the building and its ancillary facilities situated in the building zone according to the owners' entrustment and it shall be subject to supervision by the owners.
 
Article 83
 
The owners shall abide by the laws, rules and regulations and the management rules and contracts.
 
With respect to the conducts which are prejudicial to the legitimate rights and interests of others, such as the discarding of garbage at will, , emission or discharge of atmospheric pollutants and noise, raising of animals in violation of the provisions, construction of illegal structures, occupation of the passageways and refusal of paying management fees, the owners' assemblies and the owners' committees shall have the rights to require the subjects to stop the infringement, eliminate the risks and hindrance, and compensate for the losses according to the laws, rules and regulations and the management rules and contracts. Wit respect to the conducts who are infringing upon the legitimate rights and interests of the owners, the owners may commence a legal proceeding in the people's court according to law.
 
 
Chapter 7  Neighboring Relations
 
 
Article 84
 
The neighboring obligee of realty shall correctly dispose of the neighboring relations in accordance with the principles of benefit of production, giving conveniences to livelihoods, unity and mutual assistance, fairness and reasonableness.
 
Article 85
 
Where there are laws, rules and regulations prescribing the disposal of neighboring relations, they shall then be followed accordingly. Where there is no such prescription in the laws, rules and regulations, local custom may be followed.
 
Article 86
 
The obligee of realty shall provide necessary conveniences on the use of water and drainage to the neighboring obligees.
 
With respect to the utilization of natural flowing water, it shall be reasonably distributed between the neighboring obligees of realty. With respect to the discharge of natural flowing water, the natural flowage shall be respected.
 
Article 87
 
The obligee of realty shall provide necessary conveniences to the neighboring obligees if they must make use of his land for passage, etc.
 
Article 88
 
Where the obligee of realty finds it necessary to make use of the neighboring land or building for erecting or repairing another building or laying pipes and wiring including electric wires, power cables, water pipes, warm gas pipes and town gas pipes, the obligee of that land or building shall provide necessary conveniences accordingly.
 
Article 89
 
The erection of a building shall not hinder the ventilation, lighting and sunlight illumination of the neighboring building in violation of the relevant engineering and construction standards of the State.
 
Article 90
 
The obligee of realty shall not emit or discharge atmospheric pollutants, water pollutants, solid wastes and other harmful substances including noise, light, magnetic wave radiation in violation of the provisions of law.
 
Article 91
 
The obligee of realty shall not endanger the safety of the neighboring realty when excavating land, erecting a building, laying pipes and wirings, and installing facilities. The obligee of the neighboring realty shall have the right to demand the obligee of realty in work progress to provide the corresponding guaranty.
 
Article 92
 
Where the obligee of realty finds it necessary to make use of the neighboring realty for use of water, drainage, passage, laying of wirings and pipes, etc., he shall make his best effort to avoid causing prejudice to the neighboring realty; however, compensation shall be made if prejudice is caused.
 
 
Chapter 8  Co-ownership
 
 
Article 93
 
Realties and chattels can be co-owned by two or more entities or individuals. Co- ownership can be divided into ownership in common and joint ownership.
 
Article 94
 
The owners in common shall enjoy ownership to their co-owned realties and chattels according to their shares.
 
Article 95
 
The joint owners shall enjoy joint ownership to their co-owned realties and chattels.
 
Article 96
 
The co-owners shall manage their co-owned realties and chattels according to the stipulations; where it is neither specified nor specified clearly in the stipulations, every co-owner shall have the rights and obligations of management.
 
Article 97
 
With respect to the disposition of co-owned realties and chattels and significant maintenance to co-owned realties and chattels, consent has to be obtained from the owners in common with at least two-thirds of the shares or from all joint owners, unless otherwise stipulated by the co-owners.
 
Article 98
 
The management fees and other incumbrances with respect to the co-owned property shall be governed by the stipulations, if any. Where they are neither specified nor specified clearly in the stipulations, the owners in common shall bear them according to their shares, whereas the joint owners shall bear them jointly.
 
Article 99
 
Where the co-owners have stipulated that the realties or chattels shall not be partitioned for the sake of maintaining a co-ownership relation, such stipulations shall be followed; however, where the co-owner has a significant reason justifying the partition, he can request for the partition; where it is neither specified nor specified clearly in the stipulations, the owners in common may request for partition at any time, while the joint owners may request for partition when the basis for co-ownership is lost or there exists a significant reason justifying the partition. Where prejudice is caused to others on account of the partition, compensation shall be made accordingly.
 
Article 100
 
The co-owners may ascertain the partition method by an agreement. Where an agreement cannot be reached and the co-owned realties or chattels can be partitioned without causing diminishment to its value; partition shall then be made to the physical object; where its value will be diminished through or on account of the partition, it shall be realized by means of auction or sale and the proceeds derived therefrom shall be partitioned or discounted for compensation.
 
Where flaws are identified in the realties or chattels partitioned to the co-owner, other co-owners shall be required to share the losses.
 
Article 101
 
The owner in common may assign his share of the co-owned realties or chattels under his enjoyment. Other co-owners shall be entitled to enjoy the right of first refusal under the same conditions.
 
Article 102
 
In terms of the external relations, the co-owners shall enjoy joint and several creditors' rights or assume joint and several debts for the creditor's rights and debts arising from the co-owned realties or chattels, unless it is otherwise prescribed by law or the third party knows that the co-owners do not have the relation of joint and several creditor's rights or debts. In terms of the internal relations between the co-owners, the owners-in-common shall enjoy creditor's rights and assume debts according to their shares, the joint-owners shall jointly enjoy creditor's rights and assume debts, unless the co-owners have made stipulations otherwise. If the repayment of debts by the owner-in-common has exceeded his assumed portion, the owner-in-common shall have the right to demand other co-owners for the recovery of the surplus.
 
Article 103
 
If the co-owners have neither specified nor specified clearly in the stipulations whether the co-owned realties or chattels are to be owned in common or jointly owned, it shall be regarded as being owned in common unless the co-owners have a family relationship.
 
Article 104
 
The share entitled for enjoyment by the owner in common with respect to the co-owned realties or chattels shall be ascertained according to the amount of capital contribution if it is neither specified nor specified clearly in the stipulations; where the amount of capital contribution cannot be ascertained, it shall be regarded as the enjoyment in equal shares.
 
Article 105
 
This Chapter shall be referred to for the joint enjoyment of the right of usufruct or security interest by two or more entities or individuals.
 
 
Chapter 9  Special Provisions Governing the Acquisition of Ownership
 
 
Article 106
 
If a person without the right of disposition assigns the realties or chattels to the assignee, the owner thereof shall have the right to claim it back. Unless otherwise prescribed by law, the assignee shall acquire the ownership of the realties or chattels if one of the following conditions is met:
 
(1) the assignee was in good faith at the time of receiving the assigned realties or chattels;
 
(2) it was assigned at a fair value; or
 
(3) the assigned realties or chattels that should be registered according to the provisions of law has already completed the registration process; or it has been assigned to the assignee if no registration is required;
 
Where the assignee has acquired the ownership of the realties or chattels according to the provisions of the preceding paragraph, the original owner shall have the right to demand compensation for losses against the person who is without the right of disposition.
 
References shall be made to the foregoing paragraphs for other property rights acquired by the parties concerned in good faith.
 
Article 107
 
The owner or other obligees shall have the right to claim the lost property. Where the lost property has been possessed by others through assignment, the obligee shall have the right to demand for compensation against the person without the right of disposition or to demand for return of the originals within 2 years since the date the obligee knows or should have known the assignee; where the assignee has acquired that lost property by means of auction or through purchase from a business operator with the business operation qualifications, the obligee shall reimburse the fee paid by that assignee when he demands for return of the originals, afterwards the obligee shall have the right to see compensation from the person without the right of disposition.
 
Article 108
 
Once a chattel has been acquired by a bona fide assignee, the right originally vested in the chattel shall be eliminated, unless the bona fide assignee knew the subsistence of that right at the time of assignment.
 
Article 109
 
A lost property, if found, shall be returned to the obligee. The finder shall promptly notify the obligee to claim the found property or hand it over to the relevant authorities such as the public security.
 
Article 110
 
Upon receipt of the found property, the relevant authority shall promptly notify the obligee, if his identity is known, to claim the found property. A notice of claim shall be announced if the obligee cannot be ascertained.
 
Article 111
 
The found property shall be kept properly by the finder before it is handed over to the relevant authority, it shall also be kept properly by the relevant authority before it is claimed. Where the found property is damaged or lost deliberately or for the reason of gross negligence, it shall assume civil liability accordingly.
 
Article 112
 
At the time of claiming the found property, the obligee shall reimburse or pay the necessary fees such as the safekeeping fee of the lost property to the finder or the relevant authority.
 
Where the obligee has offered a reward for the successful finding of the lost property, the obligee shall perform his obligations of undertaking to give the reward to the finder at the time of claiming the found property.
 
Where a finder has seized the found property, he shall have no right to demand for the reimbursement or payment of the necessary fees such as the safekeeping fee of the lost property or demand the obligee to perform his obligations according to his undertaking.
 
Article 113
 
The found property shall be forfeited to the State if it is unclaimed within six months since the date of announcement of the notice of claim.
 
Article 114
 
The finding of flotsam and the discovery of buriers or conceal objects shall be disposed of according to the relevant provisions concerning the finding of lost property. Where it is otherwise prescribed in the laws such as the "Law of the People's Republic of China on the Protection of Cultural Relics", those laws shall be followed.
 
Article 115
 
The accessory thing shall be assigned along with the principal thing when the latter is assigned, unless the parties concerned have stated otherwise.
 
Article 116
 
The natural proceeds shall be acquired by the owner; where both owner and usufructuary are present, the natural proceeds shall be acquired by the usufructuary, unless the parties concerned have stated otherwise, which shall then be followed accordingly.
 
The statutory proceeds shall be acquired in accordance with the stipulations of the parties concerned, if any. Where it is neither specified nor specified clearly in the stipulations, it shall be acquired in accordance with the trading custom.
 
 
PART III  RIGHT OF USUFRUCT
 
 
Chapter 10  General Provisions
 
 
Article 117
 
A usufructuary shall be entitled according to law to enjoy the rights of possession, utilization and proceeds collection over the realties or chattels that are owned by others.
 
Article 118
 
An entity or individual may, according to law, possess, utilize or collect proceeds from the natural resources and entities which are owned by the State, owned by the State but allowed for utilization by the collectives, or regarded as collectively-owned according to the provisions of law.
 
Article 119
 
The State shall implement the system of non-gratuitous utilization of natural resources, unless it is otherwise stated in the provisions of law.
 
Article 120
 
In exercising his rights, a usufructuary shall abide by the provisions of law relevant to the protection, reasonable exploitation and utilization of resources. The owner shall not interfere with the exercise of rights by the usufructuary.
 
Article 121
 
Where the right of usufruct is eliminated or the exercise thereof is prejudiced for the reason of expropriation or requisition of the realties or chattels, the usufructuary shall be entitled to receive the corresponding compensation pursuant to the provisions of Articles 42 & 44 of this Law.
 
Article 122
 
The right to use the maritime space as acquired according to law shall be under legal protection.
 
Article 123
 
The right to prospect, the mining right, the water collection right, and the rights to use water areas, beaches and shoals for engaging in aquatic breeding and fishery businesses as acquired according to law shall be under legal protection.
 
 
Chapter 11  Right to Land Contractual Management
 
 
Article 124
 
The rural collective economic organizations shall apply the dual operation system characterized by the combination of centralized operation with decentralized operation on the basis of operation by household contractual management.
 
The land contractual management system shall be implemented to the cultivated land, woodland, grassland, and other land used for agricultural purposes which are owned by peasants' collectives or owned by the State but allowed for utilization by peasants' collectives.
 
Article 125
 
The person enjoying the right to land contractual management shall be entitled to enjoy the rights of possession, utilization and proceeds collection over his contractually managed cultivated land, woodland and grassland, etc., he shall have the right to engage in the agricultural production such as plantation, forestry and animal husbandry.
 
Article 126
 
The contractual period of the cultivated land shall be 30 years. The contractual period of the grassland shall be between 30 and 70 years. The contractual period of the woodland with special forest may be extended upon the approval of the competent administrative department in charge of forestry under the State Council.
 
Upon the expiration of the contractual periods as prescribed in the preceding paragraph, the person enjoying the right to land contractual management may continue to enforce the contract according to the relevant provisions of the State.
 
Article 127
 
The right to land contractual management shall be created at the time when the contract for the right to land contractual management becomes effective.
 
The people's governments at the county level or above shall issue the certificate for the right to land contractual management, certificate for the right to forestry, or certificate for the right to grassland to the person enjoying the right to land contractual management, the said certificates shall also be registered for ascertaining his right to land contractual management.
 
Article 128
 
The person enjoying the right to land contractual management shall have the right to circulate his right to contractual management of land by means of subcontract, exchange or assignment, etc. according to the provisions of the Rural Land Contract Law. The period of circulation shall not exceed the residue of the original contract for the land contractual management. No non-agricultural construction on the contracted land will be allowed without the the approval according to law.
 
Article 129
 
Where a person enjoying the right to land contractual management circulates his right to land contractual management by means of exchange or assignment, and where the parties concerned demand for registration thereof, application shall be made to the people's governments at the county level or above for alteration of registration for the right to land contractual management; it shall not be used against a bona fide third party if no registration has been made.
 
Article 130
 
A contract-issuing party is prohibited from adjusting the contracted land within the contractual period.
 
Where exceptional circumstances such as destruction to the contracted land by natural disasters occur, and it is necessary to suitably adjust the contracted cultivated land and grassland, the situation shall be handled according to the provisions of the Rural Land Contract Law as well as the provisions of other laws.
 
Article 131
 
A contract-issuing party is prohibited from resuming the contracted land within the contractual period, unless it is otherwise prescribed in the Rural Land Contract Law as well as in other laws, those laws shall be followed accordingly.
 
Article 132
 
If the contracted land is expropriated, the a person enjoying the right to land contractual management shall be entitled to receive the corresponding compensation pursuant to the provisions under paragraph 2 of Article 42 of this Law.
 
Article 133
 
As for the land of the rural villages such as barren land which is contracted by means of bid invitation, auction or through open negotiations, its right to land contractual management can be circulated by means of assignment, shares purchase, mortgage, etc. according to the relevant provisions of the Rural Land Contract Law as well as the provisions of other laws and the relevant provisions of the State Council.
 
Article 134
 
References shall be made to the relevant provisions of this Law for implementing the contractual management of the State-owned agricultural land.
 
 
Chapter 12  Construction Land Use Rights
 
 
Article 135
 
A person enjoying the construction land use rights shall be entitled to enjoy the rights of possession, utilization and proceeds collection over the State-owned land, he shall have the right to erect buildings, architectures and their ancillary facilities on the land.
 
Article 136
 
The construction land use rights can be created on, above or below the land surface. The newly created construction land use rights shall not prejudice the created right of usufruct.
 
Article 137
 
The construction land use rights can be created by means of assignment or transfer, etc.
 
Where the nature of the land is for business purposes such as industry, commerce, travel, entertainment or commercial residential houses or there are at least two intended land users interested in the same piece of land, the land shall be assigned by means of open outcry such as bid invitation or auction.
 
It is strictly restricted to create the construction land use rights by means of transfer. Where the means of transfer is adopted, it shall abide by the provisions of the laws and administrative regulations relevant to the purposes of land use.
 
Article 138
 
Where the construction land use rights are created by means of assignment such as bid invitation, auction or agreement, the parties concerned shall conclude a written contract for the assignment of the construction land use rights.
 
The following clauses shall be incorporated into a contract for the assignment of the construction land use rights:
 
(1) titles and residences of the parties concerned;
 
(2) location and area of the land;
 
(3) space occupied by the building, architecture and their ancillary facilities
 
(4) purposes of land use;
 
(5) period of use;
 
(6) fees such as the assignment fee and their modes of payment; and
 
(7) measures for dispute resolution.
 
Article 139
 
For the creation of the construction land use rights, application for registration of the construction land use rights shall be made to registration authority. The right to the construction land shall be created at the time when the registration is completed. The registration authority shall then issue a certificate of construction land use rights to the person enjoying the construction land use rights.
 
Article 140
 
A person enjoying the construction land use rights shall make a reasonable use of the land; he shall not alter the purposes of land use. Where the purposes of land use needs to be altered, he shall seek the approval from the relevant competent administrative authority according to law.
 
Article 141
 
A person enjoying the construction land use rights shall pay the fees including the assignment fee according to the provisions of law and the stipulations of the contract.
 
Article 142
 
The ownership of the buildings, architectures and their ancillary facilities erected by the person enjoying the construction land use rights shall be vested in the person enjoying the construction land use rights, unless it is proved to the contrary.
 
Article 143
 
A person enjoying the construction land use rights shall have the right to assign, exchange, contribute capitals, bestow or mortgage the construction land use rights, unless it is otherwise prescribed by the provisions of law.
 
Article 144
 
Where the construction land use rights are to be assigned, exchanged, contributed as capitals, bestowed or mortgaged, the parties concerned shall conclude a written contract correspondingly. The period for the land use shall be stipulated by the parties concerned; however, it shall not exceed the residue of the construction land use rights.
 
Article 145
 
Where the construction land use rights are to be assigned, exchanged, contributed as capitals or bestowed, application for registration of alteration shall be made at the registration authority.
 
Article 146
 
Where the construction land use rights are to be assigned, exchanged, contributed as capitals or bestowed, the building, architecture and their ancillary facilities attached to the land shall be disposed of altogether.
 
Article 147
 
Where the building, architecture and their ancillary facilities are assigned, exchanged, contributed as capitals or bestowed, the construction land use rights of the area occupied by that building, architecture and their ancillary facilities shall be disposed of altogether.
 
Article 148
 
If, prior to the expiration of the construction land use rights, the land needs to be resumed for public interests, compensation shall be made with respect to the houses and other realties on that piece of land and the corresponding assignment fee shall be returned according to the provisions of Article 42 of this Law.
 
Article 149
 
Upon the expiration of the construction land use rights for residential houses, it shall be renewed automatically.
 
The renewal of the construction land use rights for non-residential houses upon expiration shall be handled according to the provisions of law. The attribution of the houses and other realties on that piece of land shall be disposed of according to the stipulations, if any. If it is neither specified nor specified clearly in the stipulations, it shall then be disposed of according to the provisions of the laws and administrative regulations.
 
Article 150
 
Where the construction land use rights have been extincted, the assignor shall promptly complete the cancellation registration. The registration authority shall resume the certificate of construction land use rights.
 
Article 151
 
Where the collectively-owned land is to be used as construction land, it shall be handled according to the provisions of the Land Administration Law as well as the provisions of other laws.
 
 
Chapter 13  House-site-use Right
 
 
Chapter 152
 
A person enjoying the house-site-use right shall be entitled to enjoy the rights of possession and utilization over the collectively-owned land according to law, he shall have the right to construct building and its ancillary facilities on the land according to law.
 
Chapter 153
 
The acquisition, exercise or assignment of the house-site-use right shall be governed by the provisions of the Land Administration Law as well as the provisions of other laws, and the relevant provisions of the State.
 
Article 154
 
Where a land site is lost for the reason of natural disasters, etc., the house-site-use right shall be eliminated concurrently. The rural villagers who have lost the house site shall be allocated with another house site afresh.
 
Article 155
 
Where the registered house-site-use right is assigned or eliminated, the person enjoying the house-site-use right shall promptly complete the alteration registration or cancellation registration respectively.
 
 
Chapter 14  Easement
 
 
Article 156
 
An easement holder shall have the right to use other's realties for enhancing the efficiency to his own realty according to the stipulations of the contract.
 
The "other's realty" and "own realty" as mentioned in the preceding paragraph shall refer to "servient tenement" and "dominant tenement" respectively.
 
Article 157
 
The parties concerned shall conclude a written easement contract for the creation of easement.
 
The following clauses shall be incorporated into an easement contract:
 
(1) names or titles and residences of the parties concerned;
 
(2) locations of the servient tenement and dominant tenement;
 
(3) purposes and means of use;
 
(4) period of use;
 
(5) fees and their modes of payment; and
 
(6) measures for dispute resolution.
 
Article 158
 
The easement shall be created when the easement contract becomes effective. Where the parties concerned require registration thereof, application shall be made to the registration authority for easement registration, it shall not be used against a bona fide third party if no registration has been made.
 
Article 159
 
According to the stipulation of the contract, an obligee of the servient tenement shall permit the easement holder to use his own land and not hinder the exercise of rights by the easement holder.
 
Article 160
 
An easement holder shall make use of the servient tenement according to the purposes and means of use as stipulated in the contract; he shall reduce the restrictions to the obligee of the servient tenement as far as practicable.
 
Article 161
 
The period for the easement shall be stipulated by the parties concerned; however, it shall not exceed the residue of the rights of usufruct such as the right to land contractual management and the construction land use rights.
 
Article 162
 
Where a land owner enjoys the easement or assumes the easement, the person enjoying the right to land contractual management or the person enjoying the house site use right shall be entitled to continuously enjoy or assume the created easement at the time when the right to land contractual management or the house-site-use right is created.
 
Article 163
 
If the rights such as the right to land contractual management, construction land use rights and the house site use right have already been created on the land, the land owner is prohibited from creating easement on the land without the consent of the usufructuary.
 
Article 164
 
The easement cannot be assigned in isolation. When assigning the right to land contractual management and the construction land use rights, etc., the easement shall be assigned altogether, unless it is otherwise stipulated in the contract.
 
Article 165
 
Easement cannot be mortgaged in isolation. When mortgaging the right to land contractual management and the construction land use rights, etc., the easement shall be assigned altogether at the time of realization of the mortgage.
 
Article 166
 
Where the dominant tenement, the right to land contractual management and the construction land use rights on the dominant tenement are partially assigned, the assignee shall be entitled to concurrently enjoy the easement if the assigned portion involves easement.
 
Article 167
 
Where the servient tenement, the right to land contractual management and the construction land use rights on the servient tenement are partially assigned, the easement shall be binding on the assignee if the assigned portion involves easement.
 
Article 168
 
An obligee of the servient tenement shall have the right to dissolve the easement contract and the easement shall be eliminated if the easement holder has conducted any of the following acts:
 
(1) abuse of the easement in violation of the provisions of law or stipulations of contract; or
 
(2) where the servient tenement is used non-gratuitously; however, the fee remains unpaid within a reasonable period after the expiration of the stipulated period of payment, despite the fact that two reminders therefor have been sent to the easement holder.
 
Article 169
 
Where the registered easement needs to be altered, assigned or eliminated, the alteration registration or cancellation registration shall be completed promptly.
 
 
 
PART IV  SECURITY INTEREST
 
 
Chapter 15  General Provisions
 
 
Article 170
 
Where a debtor defaults in the repayment of his debts at maturity or the situation of realization of the security interest as stipulated by the parties concerned occurs, the person enjoying the security interest shall be entitled under the law to enjoy the right of receiving compensation in priority with respect to the property subject to the security interest, unless it is otherwise prescribed by laws.
 
Article 171
 
In civil activities such as the getting of loans or trading, a creditor may, for the purpose of protecting the realization of his creditor's rights and where security is needed, create his security interest pursuant to the provisions of this Law and other laws.
 
Where a third party provides security to the creditor for the debtor, the third party may demand countersecurity from the debtor. The countersecurity shall be governed by the provisions of this Law and other laws.
 
Article 172
 
A security contract shall be concluded for the creation of the security interest according to the provisions of this Law and other laws. The security contract is a subsidiary contract of the principal contract. Where the principal contract is void, the security contract shall be void concurrently, unless it is otherwise prescribed by laws.
 
Where it is affirmed that the security contract is void, the debtor, guarantor, and creditor shall respectively assume the corresponding civil liabilities in light of their faults, if any.
 
Article 173
 
The scope of security in the security interest shall include the principal creditor's right and its interest, default fine, liquidated damages, fees for the custody of property and the realization of the security interest, unless the parties concerned have stated otherwise, which shall then be followed accordingly.
 
Article 174
 
If the property subject to the security interest is damaged, lost, expropriated, etc. during the security period, the person enjoying the security interest shall be entitled to receive compensation in priority with respect to the premium, damages and compensation to be received by him. The person enjoying the security interest may deposit or withdraw the premium, damages and compensation, etc. even prior to the expiry of the implementation period of the secured creditor's rights.
 
Article 175
 
Where no written consent is given by a third party at the time when he is providing the security, the guarantor shall no longer assume the corresponding security liabilities if the creditor allows the debtor to transfer part or all of the debts.
 
Article 176
 
Where the secured creditor's rights are composed of both physical security and personal security, and the debtor defaults in the repayment of his debts at maturity or the situation of realization of the security interest as stipulated by the parties concerned occurs, the creditor shall realize his creditor's rights according to the stipulations. Where it is neither specified nor specified clearly in the stipulations, and the debtor provides security to the property on his own, the creditor shall firstly realize his creditor's right to the property. Where a physical security is provided by a third party, the creditor may realize his creditor's rights with respect to the physical security, or he may demand the guarantor to assume the assuring liabilities. Having provided the security, the third party shall have the right to demand for compensation from the debtor after assumption of the security liabilities.
 
Article 177
 
A security interest shall be eliminated if any of the following occurs:
 
(1) the principal creditor's right is eliminated;
 
(2) the security interest is realized;
 
(3) the creditor disclaims the security interest;
 
(4) other circumstances governing the elimination of security interest as prescribed by laws.
 
Article 178
 
If there is any discrepancy between the Guaranty Law and the provisions of this Law, this Law shall prevail.
 
 
Chapter 16  Mortgage
 
 
Section 1  General Mortgage
 
Article 179
 
For securing the repayment of debts, a debtor or a third party may mortgage his property to the creditor without transferring the possession of his property to the creditor. The creditor shall have the right to receive compensation in priority if the debtor defaults in the repayment of his debts at maturity or the situation of realization of the mortgage as stipulated by the parties concerned occurs.
 
The debtor or the third party as prescribed in the preceding paragraph shall be the mortgagor, the creditor shall be the mortgagee, and the property used for providing guarantee shall be the mortgaged property.
 
Article 180
 
A debtor or a third party may mortgage the following properties to which he has the right of disposal:
 
(1) buildings and other land attachments;
 
(2) construction land use rights;
 
(3) where the right to land contractual management such as the barren land is acquired by means of bid invitation, auction or through open consultation, etc.;
 
(4) production facilities, raw materials, semi-finished goods, products;
 
(5) buildings, vessels, or flight vehicles under construction;
 
(6) means of transportation; or
 
(7) other properties the mortgaging of which is not prohibited in the laws or administrative regulations.
 
The properties as listed in the preceding paragraph may be mortgaged altogether by a mortgagor.
 
Article 181
 
With the written agreements of the parties concerned, the enterprises, individually owned stores or agricultural production operators may mortgage the current and future production facilities, raw materials, semi-finished goods and products. Where the debtor defaults in the repayment of his debts at maturity or the situation of realization of the mortgage as stipulated by the parties concerned occurs, the creditor shall have the right to receive compensation in priority on the chattel when realizing the mortgage.
 
Article 182
 
Where a mortgage is taken out on a building, the construction land use rights within the ambit of occupation by that building shall be mortgaged altogether. Where a mortgage is taken out on the construction land use rights, the buildings erected on that piece of land shall be mortgaged altogether.
 
Where the mortgagor fails to mortgage the properties altogether in compliance with the provisions of the preceding paragraph, the unmortgaged properties shall be regarded as having been mortgaged altogether.
 
Article 183
 
The construction land use rights of the enterprises in township or town and the village enterprises cannot be mortgaged in isolation. Where mortgages are taken out on buildings such as factories of the enterprises in townships or towns and the village enterprises, the construction land use rights within the ambit of occupation by those buildings shall be mortgaged altogether.
 
Article 184
 
The following properties shall not be mortgaged:
 
(1) land ownership;
 
(2) the collectively owned land use rights to the cultivated land, house-site-use right, and land and hill allowed for retention, etc. unless the mortgaging of which is permitted by the provisions of law;
 
(3) business sectors, educational facilities of the social communities, medical and hygienic facilities and other public welfare facilities with the goals of benefiting the public such as schools, kindergartens and hospitals;
 
(4) the ownership or the right to use of the property is unclear or in dispute;
 
(5) properties are seized, distrained or under custody according to law; or
 
(6) other properties the mortgaging of which is prohibited according to the provisions of the laws and administrative regulations
 
Article 185
 
The parties concerned shall conclude a written mortgage contract for the creation of a mortgage.
 
A mortgage contract shall in general include the following clauses:
 
(1) types and value of the secured creditor's rights;
 
(2) period for honoring the repayment debts by the debtor;
 
(3) title, quantity, quality, condition, location, attribution of ownership and attribution of the right to use of the mortgaged property; and
 
(4) scope of the guarantee.
 
Article 186
 
Prior to the expiration of the period for honoring the repayment of debts, the mortgagee shall not stipulate with the mortgagor that the mortgaged property shall be owned by the creditor in the event the debtor fails to repay the debts at maturity.
 
Article 187
 
Where mortgages are taken out on the properties as prescribed under items (a)-(c) of paragraph 1 of Article 180 of this Law or on the buildings under construction as prescribed under item (e) of paragraph 1 of Article 180 of this Law, the mortgage registration shall be completed accordingly. A mortgage shall be created at the time of registration.
 
Article 188
 
Where mortgages are taken out on the properties as prescribed under items (d) & (f) of paragraph 1 of Article 180 of this Law or on vessels or flight vehicles under construction as prescribed under item (e) of paragraph 1 of Article 180 of this Law, the mortgage shall be created at the time when the mortgage contract becomes effective. It cannot be used against a bona fide third party if no registration has been made.
 
Article 189
 
Where the enterprises, individually owned stores or agricultural production operators take out mortgages on the chattels as prescribed in Article 181 of this Law, they shall complete the registration at the local administrative authority in charge of industry and commence. The mortgage shall be created at the time when the mortgage contract becomes effective. It cannot be used against a bona fide third party if no registration has been made.
 
Even where a mortgage has been taken out in compliance with the stipulations of Article 181 of this Law, it cannot be used against a purchaser who has already paid a reasonable purchase price and acquired the property in the normal business activity.
 
Article 190
 
Where the mortgaged property has been leased before the conclusion of the mortgage contract, the original tenancy relationship shall not be prejudiced by the mortgage. However, where the mortgaged property is leased after the conclusion of the mortgage contract, the tenancy relationship cannot be used against the registered mortgage.
 
Article 191
 
With the consent of the mortgagee, the mortgagor may assign the mortgaged property and then apply the money obtained from the assignment of property towards early settlement and payment of debts to the mortgagee or arrange it deposited. When the money obtained from the assignment of property exceeds the value of the mortgagee's creditor's rights, the surplus thereof shall be returned to the mortgagor, where the money obtained from the assignment of property is insufficient to settle the value of the mortgagee's creditor's rights, the deficit shall be settled and paid off by the debtor.
 
Without the consent of the mortgagee, the mortgagor is prohibited from assigning the mortgaged property, unless the assignee has discharged the mortgage by settling and paying off the debts on mortgagor's behalf.
 
Article 192
 
The mortgage cannot be separated with the mortgagee's creditor's rights and assigned in isolation, nor can it be used as security for other creditor's rights. Where the creditor's rights are assigned, the mortgage used for securing those creditor's rights shall be assigned altogether, unless it is otherwise prescribed by laws or stipulated by the parties concerned.
 
Article 193
 
Where the conducts of a mortgagor may sufficiently result in the reduction in value to the mortgaged property, the mortgagee shall have the right to demand the mortgagor to cease his conducts. Where the value of the mortgaged property is reduced as a result, the mortgagee shall have the right to demand the mortgagor to revive the value of the mortgaged property or provide security correspondent with the reduced value. Where the mortgagor fails to revive the value of the mortgaged property or provide a security correspondent with the reduced value, the mortgagee shall have the right to demand the debtor to advance the settlement and payment of debts.
 
Article 194
 
A mortgagee may disclaim the mortgage or his order of claims in the mortgage. A mortgagee may agree with the mortgagor to alter the contents such as the order of claims in the mortgage and the value of the secured creditor's rights. However, any alteration to the mortgage shall not have any prejudicial effect on other mortgagees without the written consent from other mortgagees.
 
Where a debtor creates a mortgage with his own property, but the mortgagee disclaims the mortgage, his order of claims in the mortgage or alters the mortgage, other guarantors shall, within the scope in which the mortgagee has lost the interest to receiving compensation in priority, have their security liabilities dispensed with, unless other guarantors undertake that they shall continue to provide the security.
 
Article 195
 
Where a debtor defaults in the repayment of his debts at maturity or the situation of realization of the mortgage as stipulated by the parties concerned occurs, the mortgagee may stipulate with the mortgagor to convert the mortgaged property into money or make use of the money obtained from the mortgaged property by means of auction or sale thereof for receiving compensation in priority. If the agreement made between the mortgagee and the mortgagor prejudices other creditors' interests, other creditors may petition to the people's court to rescind the said agreement within one year since the date when other creditors know or should have known the causes for the rescission.
 
If the mortgagee is unable to stipulate the manners of realizing the mortgage with the mortgagor, the mortgagee may petition to the people's court to auction or sell off the mortgaged property.
 
References shall be made to the market price when the mortgaged property is converted into money or sold off.
 
Article 196
 
Where a mortgage is created in compliance with the provisions of Article 181 of this Law, the mortgaged property shall be ascertained if any of the following circumstances occurs:
 
(1) the repayment period of the debts is expired, but the creditor's rights remain unrealized;
 
(2) the mortgagor is declared bankrupted or dismissed;
 
(3) situation of realization of the mortgage as stipulated by the parties concerned; or
 
(4) other circumstances which may seriously prejudice the realization of the creditor's rights.
 
Article 197
 
Where a debtor defaults in the repayment of his debts at maturity or the situation of realization of the mortgage as stipulated by the parties concerned occurs, and it thus results in the mortgaged property being distrained by the people's court according to law, the mortgagee shall have the right to collect the natural proceeds or statutory proceeds from the mortgaged property since the date the mortgaged property was distrained, unless the mortgagee has not informed the obligor who shall be responsible for settling and paying off the statutory proceeds.
 
The proceeds as prescribed in the preceding paragraph shall first be used for paying off the expenses for the collection of proceeds.
 
Article 198
 
After the mortgaged property has been converted into money, auctioned or sold off, if the money obtained therefrom exceeds the value of the mortgagee's creditor's rights, the surplus thereof shall be returned to the mortgagor; however, if the money obtained therefrom is insufficient to settle the value of the mortgagee's creditor's rights, the deficit shall be settled and paid off by the debtor.
 
Article 199
 
Where the same property has been mortgaged to two or more creditors, the money obtained from the mortgaged property by means of auction or sale shall be used for settlement and payment according to the following provisions:
 
(1) where the mortgage has been registered, the settlement and payment shall be made according to the order of registration; where the orders are the same, they shall be settled and paid off according to the ratio of creditors' rights;
 
(2) where the mortgage has been registered, those who have been registered shall receive compensation in priority; and
 
(3) where the mortgage has not been registered, the settlement and payment shall be made according to the ratio of creditors' rights.
 
Article 200
 
After the construction land use rights have been mortgaged, any new buildings erected on that piece of land shall not form part of the mortgaged property. When the mortgage to the construction land use rights are realized, the new buildings erected on that piece of land and the construction land use rights shall be disposed of altogether; however, the mortgagee shall not be entitled to receive compensation in priority with respect to the money obtained from the disposition of the new buildings.
 
Article 201
 
Where a mortgage is taken out on the construction land use rights as prescribed under item (c) of paragraph 1 of Article 180 of this Law or mortgages are taken out altogether on the construction land use rights within the ambit of occupation by the buildings such as factories of the enterprises in townships or towns and the village enterprises, after the realization of the mortgages, the nature and purposes of land use of the land ownership are prohibited from alteration if they have not gone through the statutory procedures.
 
Article 202
 
A mortgagee shall exercise his mortgage rights subject to the limitation of actions governing the principal creditor's rights; the people's court shall not give protection to him if his mortgage rights are not exercised.
 
 
Section 2  Maximum Amount Mortgage
 
 
Article 203
 
For securing the repayment of debts, if a debtor or a third party provides security to the property for the continuously occurring creditor's rights arising in a certain period of time, the mortgagee shall have the right to receive compensation in priority within the maximum amount with respect to the property subject to the security interest if the debtor defaults in the repayment of his debts at maturity or the situation of realization of the mortgage as stipulated by the parties concerned occurs.
 
Where the creditor's rights have been in existence before the creation of the maximum amount mortgage, and with the consent of the parties concerned, they can be converted into the scope of the creditor's rights under security by maximum amount mortgage.
 
Article 204
 
Prior to the ascertainment of the creditor's rights under security by maximum amount mortgage, the maximum amount mortgage is prohibited from assignment if part of the credit rights have been assigned, unless it is otherwise stipulated by the parties concerned.
 
Article 205
 
Prior to the ascertainment of the creditor's rights under security by maximum amount mortgage, the mortgagee may stipulate with the mortgagor to alter the time, scope of the creditor's rights and the maximum value of the creditor's rights for the ascertainment of the creditor's rights; however, the altered contents shall not have any prejudicial effect on other mortgagees.
 
Article 206
 
The creditor's rights of a mortgagee shall be ascertained in any of the following circumstances:
 
(1) expiration of the stipulated period for the ascertainment of creditor's rights;
 
(2) there is no stipulated period for the ascertainment of creditor's rights or the or unclear stipulated period is unclear, and the mortgagee or the mortgagor requests for ascertainment of the creditor's rights after two years since the date of creation of the maximum amount mortgage;
 
(3) new creditor's rights are impossible to come up;
 
(4) mortgaged properties are seized or distrained;
 
(5) the debtor or mortgagor is declared bankrupted or dismissed; or
 
(6) other circumstances for ascertainment of the creditor's rights as prescribed by laws.
 
Article 207
 
The provisions of this Section as well as the provisions of Section 1 of this Chapter, General mortgage, shall govern the maximum amount mortgage.
 
 
 
Chapter 17  Pledge
 
Section 1  Pledge of Chattels
 
 
Article 208
 
For securing the repayment of debts, if a debtor or a third party pledges his chattel for possession by the creditor, the creditor shall have the right to receive compensation in priority from the chattel if the debtor defaults in the repayment of his debts at maturity or the situation of realization of the pledge as stipulated by the parties concerned occurs.
 
The debtor or the third party as prescribed in the preceding paragraph shall be the pledgor, the creditor shall be the pledgee, and the chattel delivered shall be the pledged property.
 
Article 209
 
The properties which have been prohibited from assignment according to the laws and administrative regulations shall not be pledged.
 
Article 210
 
The parties concerned shall conclude a written pledge contract for the creation of a pledge.
 
A pledge contract shall in general include the following clauses:
 
(1) types and value of the secured creditor's rights;
 
(2) period for honoring the repayment of debts by the debtor;
 
(3) title, quantity, quality and condition of the pledged property;
 
(4) scope of the guarantee; and
 
(5) the time required for the delivery the pledged property.
 
Article 211
 
Prior to the expiration of the period for honoring the repayment of debts, the pledgee cannot stipulate with the pledgor that the pledged property shall be owned by the creditor in the event the debtor fails to repay the debts at maturity.
 
Article 212
 
A pledge shall be created at the time of delivery of the pledged property.
 
Article 213
 
A pledgee shall have the right to collect proceeds derived from the pledged property, unless it is otherwise stipulated in the contract.
 
The proceeds as prescribed in the preceding paragraph shall first be used for paying off the expenses for the collection of proceeds.
 
Article 214
 
During the period of continued existence of a pledge, a pledgee shall assume the liability of compensation if he, without the consent of the pledgor, uses or disposes of the pledged property without authorization and the pledgor is prejudiced as a result.
 
Article 215
 
A pledgee shall bear the obligations of safekeeping the pledged property in a proper manner, he shall assume the liability of compensation if the property is damaged or lost due to his improper safekeeping of the pledged property.
 
Where the conducts of the pledgee may result in the damage or loss of the pledged property, the pledgor may demand the pledgee to deposit the pledged property, or the pledgor can request to advance the settlement and payment of debts and demand the pledgee to return the pledged property.
 
Article 216
 
Where it is possible that the pledged property may be damaged or its value reduced significantly due to a reason not attributable to the pledgee, which is calculated to endanger the rights of the pledgee, the pledgee shall have the right to demand the pledgor to provide a corresponding security; where the mortgagor fails to provide the corresponding security, the pledgee may auction or sell off the pledged property, he may then stipulate with the pledgor and apply the money obtained from the auction or sale towards early settlement and payment of debts or arrange it deposited.
 
Article 217
 
During the period of continued existence of a pledge, a pledgee shall assume the liability of compensation to the pledgor if the pledgee rehypothecates the pledged property without the consent from the pledgor and the pledged property is damaged or lost as a result.
 
Article 218
 
A pledgee may disclaim a pledge. Where a debtor pledges with his own property, other guarantors shall, within the scope in which the pledgee has lost the rights and interests of receiving compensation in priority, have their security liabilities dispensed with if the pledgee disclaims the pledge, unless other guarantors undertake that they shall continue to provide the security.
 
Article 219
 
The pledgee shall return the pledged property after the debtor has repaid the debts or the pledgor has advanced the settlement and payment of secured creditor's rights.
 
Where a debtor defaults in the repayment of his debts at maturity or the situation of realization of the pledge as stipulated by the parties concerned occurs, the pledgor may stipulate with the pledgee to convert the pledged property into money or make use of the money obtained from the pledged property by means of auction or sale thereof for receiving compensation in priority.
 
References shall be made to the market price when the pledged property is converted into money or sold off.
 
Article 220
 
A pledgor may request the pledgee to promptly exercise the pledge upon the expiration of the period for honoring the repayment of his debts; the pledgor may petition to the people's court to auction or sell off the pledged property if the pledgee fails to do so.
 
Once the pledgor has demanded the pledgee to promptly exercise the pledge, the pledgee shall assume the liability of compensation if prejudice is caused by the delay in the exercise of the pledge by the pledgee.
 
Article 221
 
After the pledged property has been converted into money, auctioned or sold off, if the money obtained therefrom exceeds the value of the creditor's rights, the surplus thereof shall be returned to the pledgor; however, if the money obtained therefrom is insufficient to settle the value of the creditor's rights, the deficit shall be settled and paid off by the debtor.
 
Article 222
 
A pledgor and a pledgee may stipulate the creation of a maximum amount pledge.
 
The provisions of this Section as well as the provisions of Section 2 of Chapter 16, Maximum amount mortgage, shall govern the maximum amount pledge.
 
 
Section 2  Option pledge
 
 
Article 223
 
The following rights to which a debtor or a third party shall have the right of disposal may be pledged:
 
(1) money orders, cheques or cashier's cheques;
 
(2) securities, certificates of deposit;
 
(3) warehouse receipts, bills of lading;
 
(4) transferable fund units, shareholding rights;
 
(5) property rights vested in the transferable intellectual property rights such as registered trademark rights, patent rights and copyrights;
 
(6) accounts receivable; and
 
(7) other property rights that can be pledged according to the provisions of the laws and administrative regulations.
 
 
Article 224
 
Where a money order, cheque, cashier's cheque, securities, certificate of deposit, warehouse receipt or bill of lading is put in pledge, the parties concerned shall conclude a written contract. A pledge shall be created at the time when the certificate of rights is delivered to the pledgee; where there is no such certificate, the pledge shall be created at the time when the relevant authority has completed the pledge registration.
 
Article 225
 
Where the date of honor or the date of collection of the money order, cheque, cashier's cheque, securities, certificate of deposit, warehouse receipt or bill of lading is earlier than the expiry date of principal creditor's rights, the pledgee may honor it or collect the goods with it, the pledgee may also stipulate with the pledgor to apply the money honored or the goods collected for early settlement and payment of debts or to arrange it deposited.
 
Article 226
 
Where fund units or shareholding rights are put in pledge, the parties concerned shall conclude a written contract. Where fund units or shareholding rights which have been registered with the Securities Registration and Settlement Institution are put in pledge, the pledge shall be created at the time when the Securities Registration and Settlement Institution has completed the pledge registration. Where other shareholding rights are put in pledge, the pledge shall be created at the time when the administrative authority in charge of industry and commence has completed the pledge registration.
 
The fund units or the shareholding rights shall not be assigned after they have been pledged, unless it is otherwise agreed upon between the pledgor and the pledgee through negotiations. In this situation, the pledgor shall apply the money obtained from the assignment of the fund units or shareholding rights towards early settlement and payment of debts or arrange it deposited.
 
Article 227
 
Where the property rights vested in the transferable intellectual property rights such as registered trademark rights, patent rights and copyrights are put in pledge, the parties concerned shall conclude a written contract. The pledge shall be created at the time when the relevant competent authority has completed the pledge registration.
 
The pledgor shall not assign or permit others to make use of the property rights vested in the transferable intellectual property rights after they have been pledged, unless it is otherwise agreed upon between the pledgor and the pledgee through negotiations. In this situation, the pledgor shall apply the money obtained from the assignment of or permitting others to use the pledged property rights vested in the transferable intellectual property rights towards early settlement and payment of debts or arrange it deposited.
 
Article 228
 
Where the accounts receivable are put in pledge, the parties concerned shall conclude a written contract. The pledge shall be created at the time when the credit reference agency has completed the pledge registration.
 
The pledgor shall not assign the accounts receivable after they have been pledged, unless it is otherwise agreed upon between the pledgor and the pledgee through negotiations. In this situation, the pledgor shall apply the money obtained from the assignment of the accounts receivable towards early settlement and payment of debts or arrange it deposited.
 
Article 229
 
The provisions of this Section as well as the provisions of Section 1 of this Chapter, Pledge of chattels, shall govern the option pledge.
 
 
Chapter 18  Lien
 
 
Article 230
 
If the debtor defaults in the repayment of his debts at maturity, the creditor may take lien of the debtor's property under his lawful possession, he shall also have the right to receive compensation in priority from that chattel.
 
The creditor as prescribed in the preceding paragraph shall be the lienor; the chattel under possession shall be the liened property.
 
Article 231
 
The chattel taken as lien by the creditor shall fall into a same legal relationship with the creditor's rights, except for the lien between the enterprises.
 
Article 232
 
The chattels which have been prohibited from lien according to the provisions of law or stipulations of the parties concerned shall not be liened.
 
Article 233
 
Where the nature of a liened property is a divisible object, its value shall be equivalent to the amount of debts.
 
Article 234
 
A lienor shall bear the obligations of properly safekeeping the liened property; he shall assume the liability of compensation if the liened property is damaged or lost due to his improper safekeeping of the liened property.
 
Article 235
 
A lienor shall have the right to collect proceeds derived from the liened property.
 
The proceeds as prescribed in the preceding paragraph shall first be used for paying off the expenses for the collection of proceeds.
 
Article 236
 
The lienor shall stipulate with the debtor on the period for honoring the settlement of his debts after a lien has been placed on the property. Where it is neither specified nor specified clearly in the stipulations, the lienor shall give at least two months to the debtor for honoring the settlement of his debts, except for chattels such as fresh food, living organisms and perishables which are difficult for preservation. Where the debtor fails to honor the settlement of his debts at maturity, the lienor may, through negotiations with the debtor, convert the liened property into money, or the lienor may receive compensation in priority from the money obtained by means of auction or sale of the liened property.
 
References shall be made to the market price when the liened property is converted into money or sold off.
 
Article 237
 
The debtor may request the lienor to exercise the lien upon the expiration of the period for honoring the settlement of his debts; the debtor may petition to the people's court to auction or sell off the liened property if the lienor fails to do so.
 
Article 238
 
After the liened property has been converted into money, auctioned or sold off, if the money obtained therefrom exceeds the value of the creditor's rights, the surplus thereof shall be returned to the debtor; however, if the money obtained therefrom is insufficient to settle the value of the creditor's rights, the deficit shall be settled and paid off by the debtor..
 
Article 239
 
Where a mortgage has been taken out or a pledge has been put on a chattel, a lienor shall be entitled to receive compensation in priority if a lien is placed on the same chattel subsequently.
 
Article 240
 
A lien becomes eliminated if the lienor losses the possession of the liened property or accepts the debtor to provide an alternative security in place of the existing one.
 
 
PART V  POSSESSION
 
 
Chapter 19  Possession
 
Article 241
 
Where the stemming of possession is based on the contractual relationship, etc., the utilization, proceeds collection and liability for breach of contract, etc. concerning realties and chattels shall be governed by the stipulations of the contract; however, they shall be governed by the relevant provisions of law instead if they are neither specified nor specified clearly in the stipulations of the contract.
 
Article 242
 
Where the realties or chattels are damaged after use by a possessor, the mala fide possessor shall assume the liability of compensation.
 
Article 243
 
Where the realties or chattels are possessed by a possessor, an obligee may demand the possessor for return of the originals and the proceeds derived therefrom. However, the obligee shall reimburse the bona fide possessor for the expenses necessary for safeguarding the realties or chattels.
 
Article 244
 
Where the realties or chattels under possession are damaged or lost, the possessor shall return the premium, damages and compensation, etc. for the damage or loss received by him to the obligee if the obligee of the realties or chattels demands for compensation; the mala fide possessor shall remain liable to compensate for the losses if prejudice caused to the obligee cannot be adequately compensated.
 
Article 245
 
Where the realties or chattels under possession are subsequently usurped, the possessor shall have the right to demand for return of the originals; with respect to the conducts of hindering the possession, the possessor shall have the right to demand for elimination of hindrance or risks; where prejudice is caused by the usurpation or hindrance, the possessor shall have the right to demand compensation for the usurpation.
 
The possessor's claims for the return of the originals shall lapse if they have not been exercised within one year since the date of usurpation.
 
 
SUPPLEMENTARY PROVISIONS
 
 
Article 246
 
In the means time, local regulations may provide the relevant prescriptions according to the provisions of this Law before the prescriptions governing the scope of unified registration, registration institutions and registration measures of realties are incorporated in the laws and administrative regulations.
 
Article 247
 
This Law shall be effective as of October 10, 2007.
 
 
【法规标题】中华人民共和国物权法 (附英文)
【发文字号】中华人民共和国主席令第六十二号
【颁布日期】2007-03-16
【实施日期】2007-10-01
【失效日期】
【颁布单位】全国人民代表大会
【时效性】有效
【时效性说明】
 
中华人民共和国物权法 (附英文)
 
   
 
 

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