LONG TERM IMPACT OF PROPERTY LAW UNCLEAR

Property developers in China are expected to benefit from the new PRC Property Law (中华人民共和国物权法)(Property Law) when it takes effect on October 1 2007. The Property Law was first proposed in 1993 and was finally passed by the NPC on March 16 2007, after seven revisions. The law consists of five chapters and 247 articles, covering ownership rights, the ownership registration system, condominium rights, neighbourhood rights, land contracting and managing rights, construction land-use rights, homestead land-use rights, easement and security interest, and mortgage rights.

Ashley Howlett, lead partner for Jones Day's Greater China construction practice, says that while the new law will correct many of the current legal framework's shortcomings, ambiguities regarding land-use rights could mean problems further down the road.

¡°The new Property Law will address current inadequacies such as land-use rights, ownership rights, and mortgage regulations - all of which were undeniably in need of a clear legal framework,¡± said Howlett. ¡°However, many of the details surrounding the land-use rights, such as the length of time a renewal will be valid for and the way in which the renewal applications will be processed, are still unclear,¡± he said.