Monday, April 25, 2016

China Homeowners Live in Legal Limbo - WSJ

China Homeowners Live in Legal Limbo - WSJ: "SHANGHAI—A land-title dispute in southeastern China is highlighting a major uncertainty over homeowner rights in a nation where the government owns all the land."


This situation has been the subject of several major revisions in the law over the last twenty years or so. It's a tough one to resolve. The national government wants to have a thriving real estate market, but local governments want to own and lease the land. That is a gross oversimplification but it will have to do for now.


Tom Skiba said...

In addition you have the issue of the existence and authority of the condo association. While the structure the government in China created when it privatized home ownership essentially creates a condo corporation, the law does not necessarily lay out their rights, responsibilities, and duties. So, for example, do they actually have a legal right to contract? I know the ABA has been involved for more than a decade working on a variety of projects related to Chinese law and particularly real estate law to bring some clarity to the situation. Pat Randolph was a spearhead for this issue for many years before his untimely passing.

Evan McKenzie said...

Tom--I was in China a few years ago for a conference on HOAs. You are right that the authority of the condo association is very unclear. To complicate matters, there are also many voluntary HOAs that have been created by irate owners who are trying to protect their rights. They feel that developers and local governments are in bed with each other, often in corrupt ways, to the detriment of owners. For example, I heard stories of people with the right connections who made major additions to high-rise condos--such as building an entire story on top of their penthouse!--with no permission from any condo association. And I was told that people who complain too much get beat up by private security guards. The government very nearly shut down our conference because they thought the activists might get out of hand.