Ministry of Construction, Ensuring Legal Compliance in Development and Construction Acts of Real Property Development Enterprises Circular

Issued: February 25 2002

Main contents: According to the Circular, a real property developer is subject to various administrative actions, including orders for rectification, fines, withholding of new project approvals or construction permits, downgrading of qualifications and revocation of qualification certificates if they are involved in certain irregularities. These irregularities include: (1) lacking a construction qualification certificate or lacking the construction qualification certificate appropriate for the development project, (2) the capital funds of the project do not reach the required level, (3) where the project is being developed or has been completed, the construction payment is seriously overdue, (4) where invitation for bids or construction supervision is required, the developer has not invited bids or has not appointed a construction supervisor, (5) the developer has subcontracted the project to unqualified subcontractors, (6) where the project is a commodity premises project, the developer fails to provide home quality warranties and home owner guides or fails to comply with such warranties, (7) the developer has transferred the project without filing with the relevant authorities, and (8) the quality of the project is substandard or a major construction quality related accident has occurred. The Circular also urges relevant authorities to set up the procedures to disclose the irregularities of real property developers to the public.
Related legislation: PRC, Administration of Urban Real Property Law, Jul 5 1994, CLP 1994 No.8 p23; PRC, Construction Law, Nov 1 1997, CLP 1998 No.1 p6; PRC, Invitation and Submission of Bids Law, Aug 30 1999, CLP 1999 No.8 p34; Administration of Urban Real Property Development and Business Regulations, Jul 20 1998, CLP 1998 No.7 p53; Administration of the Quality of Construction Works Regulations, Jan 30 2000, CLP 2000 No.2 p5 and Administration of the Qualifications of Real Property Development Enterprises Provisions, Mar 29 2000, CLP 2000 No.4 p9