Shanghai Municipality Grant of Leaseholds Measures (Revised)

Promulgated: May 21 2001
Effective: July 1 2001
Interpreting authority: Shanghai Municipal Bureau of Housing, Land and Resources Administration

Main contents: The amended Article 11 makes payment of consideration a legal requirement for obtaining leasehold for building projects. Leasehold grant continues to be the only legal option for transfer of leasehold for land intended for retail housing development projects, but transfer of leasehold for other types of building projects is now permissible through a variety of methods. Worth noting is that the provision contained in Item One of the unamended Article 11, which made leasehold for foreign legal persons or natural persons obtainable only through leasehold grant, has been removed.
The revision makes auction or tender the only acceptable methods for transferring leasehold for land intended for the commerce, tourism, entertainment, finance, service or retail housing industries (Article 14, Item Two). Transfer through negotiation, previously allowable, now requires special permission by the municipality.
Article 17 is revised to include two items clarifying tendering Measures. Tender applicants will inspect the land offered through tender at a date and time specified in the tender advertisement (Item Two). A tender committee inspects the tender offers and issues an evaluation report that recommends the tender winner (Item Five).
Revisions to Article 18 amend auctioning Measures. In Item One, the stipulation that an auction announcement should be issued seven days prior to the auction has been dropped. Item One now states simply that the auctioneer must issue an auction advertisement. The requirement to register and pay a cash deposit before a site inspection has been struck from Item Two. Item Three, which previously stated that the absence of a reservation price must be made clear before the auction, now states that bidding will be open and that the leasehold will go to the highest bid.
Related legislation: PRC, Administration of Urban Real Property Law, Jul 5 1994, CLP 1994 No.8 p23; PRC, Granting and Assigning Leaseholds in State-owned Urban Land Tentative Regulations, May 24 1990, CLP 1990 No.5 p14; Shanghai Municipality, Implementing the «PRC, Land Administration Law»Measures (2nd Revision), Nov 17 2000, CLP 2001 No.4 p17 and PRC, Land Administration Law (Revised), Aug 29 1998, CLP 1998 No.9 p27