· Area of Law： Real Estate

· Level of Authority： Local Judicial Documents

· Date issued：03-08-2016

· Effective Date：03-08-2016

· Issuing Authority： Higher People's Court of Shanghai Municipality

· Status： Effective

Opinions of the Higher People's Court of Shanghai Municipality on Handling Several Disputes in House Property Cases
(March 8, 2016)
I. Disputes over house lease contracts
(1) Handling a dispute over the lease contract of the house which was incorporated into the scope of expropriation during the lease term
In the process of performance of a lease contract, the lessor requests to rescind the lease for the expropriation of the house, but the lessee refuses to rescind the contract and vacate the house for not being compensated for the expropriation. Before the Regulation on the Expropriation of Buildings on State-owned Land and Compensation came into force, in accordance with the Regulation on the Removal of Urban Houses, if the remover, the owner of house being removed and the lessee fail to reach a removal compensation and resettlement agreement, such a dispute shall be governed by the advance ruling procedures as the tenant is the person subject to the expropriation. If the lessor brings an action for the rescission of the lease contract, the people's court shall not be accepted. But it is specified in the Regulation on the Expropriation of Buildings on State-owned Land and Compensation that the only person subject to the expropriation shall be the owner of the house and the lessee is disqualified from concluding an expropriation compensation agreement, and thus there is a dispute in practice over whether such cases ought to be accepted.
In the tendentious opinion, if a house is included into the scope of expropriation during the lease term, two legal relationships are generally involved, i.e. expropriation compensation relationship and house lease relationship. If parties made a stipulation in respect of any matter concerning demolition and relocation involved in the rented house in the lease contract, the case shall be handled according to such stipulation. If there is no such stipulation in the house lease contract, it is appropriate to first handle expropriation compensation relationship. As the loss resulted from closing of production or business, vacating, and other expenses involved in the scope of compensation for expropriation is closely related to the lessee, if the lessor rescinds the lease contract before entering into the expropriation compensation agreement or paying the lessee corresponding compensation, it is difficult to determine the reasonable compensation which the lessee may obtain for the rescission of the contract, and it is unhelpful to protect the lawful rights and interests of the lessee. Therefore, it is appropriate to handle such case of dispute over lease contract after the expropriation compensation agreement is concluded. If the lessor requests to rescind the lease contract before the issue of compensation for expropriation is solved, the people's court shall render a ruling to dismiss the request except where it conforms to the right of rescission of contract.
(2) Compensation for infringements on the right of pre-emption of lessees
In the case that the lessor sells the rented house without giving a notice to the lessee or falls under any other circumstance of infringements on the right of pre-emption of lessees, and the lessee requests the lessor to be liable for compensation, the people's court shall support such request. But there exists dissenting opinion in trial practices over how the loss to the lessee is calculated.
In the tendentious opinion, if parties have stipulated over the liability for compensation in respect of the infringements on the right of pre-emption of the lessee, such stipulation shall prevail. In the case of no such stipulation, the lessor shall indemnify the lessee for the loss resulted therefrom, including direct loss and loss of acquirable interest. In particular, the loss of the appreciation of the house shall be reasonably determined based on the request of the non-breaching party, in light of the conditions such as the change in transaction prices on the property market on the date of infringements on the right of pre-emption of the lessee, the date when the lessee becomes or ought to be aware that his right was infringed upon, etc., and in consideration of whether lessee has adopted such measures as may be necessary to prevent further loss, and other factors.
II. Disputes over division of interests in compensation for removal and relocation
(1) Unifying application of law to the jurisdiction over cases of division of interests in compensation for house expropriation (involving supporting commercial houses)
There are different practices in trial practice and relatively huge dispute with regard to the issue of jurisdiction over cases of division of interests in compensation for house expropriation. Some courts determined such disputes as disputes over division of co-owned articles while other courts deem separation of family property as the cause of action. As regards jurisdiction, some courts apply general territorial jurisdiction; while some handle the issue according to real property exclusive jurisdiction, or to the place where the resettlement housing is located, or to the place where the expropriated house is located has jurisdiction.
In the tendentious opinion, if a party brings an action to request the division of compensation for expropriation and resettlement housing co-owned by the family, the request shall be determined as a request for separation of family property. In consideration that the compensation for expropriation and resettlement housing are indemnity for the expropriated property, if different courts respectively have jurisdiction for multiple defendants involved or many resettlement houses in different jurisdictions, the standards for law enforcement in the case shall easily lead to disunity, and the division of interests in expropriation usually involves the implementation of policies on compensation for expropriation in various regions, and hence such case shall be generally governed by the court in the place where the expropriated property is located, in order to ensure the consistency of the standards for the investigation into and handling of the facts of the case.
(2) Substantial disposition of supporting commercial houses
In compensation and resettlement for expropriation, expropriation firms determine the number of supporting commercial houses which may be allocated to a family generally in accordance with the relevant policies on the expropriated residential plot, and have the re-settler sign house purchase confirmation. When the resettler requests to confirm the right to purchase the supporting commercial house at the division of the interests in the compensation for expropriation and before the supporting commercial house is actually obtained, there are different practices. Some courts confirm the right and make division while others dismiss the claim of parties, and suspend the handling.
In the tendentious opinion, when the resettler requests to confirm the right to purchase the supporting commercial house at the division of the interests in the compensation for expropriation and before the supporting commercial house is actually obtained, he is actually claiming to divide the right to the house. In consideration that the actual area and location of the house which the resettler may possibly obtain remain undetermined, it is inappropriate for the court to confirm the right and make division. If the compensation for removal and relocation is reserved at the removal and relocation department for the purchase of resettlement housing, the compensation for removal and relocation may also not be handled. If a party requests to confirm the right to purchase the resettlement housing, the court may dismiss his claims provided that it shall explain to the party that he may make the claim upon the determination of the actual area, location, etc. of the house.
III. Disputes over confirmation and division of ownership of houses and other disputes
(1) If a house is registered under the name of one spouse, and the other spouse requests to be confirmed as the joint owner of the house, whether the people's court accepts the case.
In the tendentious opinion, the creation, alteration, alienation or termination of the interest of a real estate shall come into effect if it is registered in accordance with the law. A house registered under the name of one spouse is unnecessarily determined as estates by the entirety, and the registered title holder may, based on the publication force of the real estate registration, commence corresponding transaction, while it is difficult to effectively protect the lawful rights of the unregistered title holder. Hence if one spouse unregistered as title holder has actual demand to request to be confirmed as a joint owner, the request is actionable and the people's court shall accept it.
(2) Handling of actions for confirming the ownership of seized houses
In trial practices, it frequently happens that the plaintiff brings an action for confirming the ownership of a house registered under the name of the defendant. however, the house at issue has been subject to sealing-up, seizure, freezing or other implementation measures of the court. There exist different opinions over how to the problem.
In the tendentious opinion, when a court hears an action for confirmation of house ownership, it shall inquire into the ownership of the house registered under the name of either party and required to be confirmed, and if it discovers that the house at issue has been sealed up, seized, or frozen as the property of person subject to enforcement by the enforcement department of the court, it shall dismiss the request of the party for confirmation of ownership and guide the party in filing opposition to the enforcement with the enforcement court in accordance with Article 227 of the Civil Procedure Law of the People's Republic of China and Article 17 of the Provisions of the Supreme People's Court for the People's Courts to Seal up, Seize and Freeze Property in Civil Enforcement.
(3) Determination of the ownership of a house purchased with loan by one spouse before marriage
In trial practice, there exist different opinions as to whether a house purchased with mortgage by one spouse before marriage and of which the mortgage is jointly paid by spouses is joint property or separate property.
In the tendentious opinion, if one spouse paid the developer for the house by mortgage, performed the obligations under the contract of sale of house, and the ownership is registered under the name of one spouse, the property shall be determined as the separate property of one spouse. Joint loan repayment after marriage is actually the joint repayment of the debt to the bank . Under Article 10 of the Interpretation (III) of the Supreme People's Court of Several Issues on the Application of the Marriage Law of the People's Republic of China, such real estate shall be handled at the time of divorce by both parties by agreement, the court may render a judgment to award such real estate to the party under whose name the real estate is registered if no agreement is reached, and, for the part of the loan having been jointly repaid by both parties after marriage and the corresponding property appreciation, the party under whose name the real estate is registered shall compensate the other party at the time of divorce.
(4) Adhering to the principle of division of jointly owned houses
In the tendentious opinion, a prudent attitude shall be held at the division of a jointly owned house, so as to not only consider whether the conditions for the division are satisfied but also need to ensure the realistic feasibility of the party's request for the division. According to Article 99 of the Property Law, where the co-owners of a commonly owned real estate or personal estate have stipulated that it is not allowed to partition the real estate or personal estate so as to maintain the relationship of common ownership, such stipulation shall apply; but where any co-owner has certain significant reasons for partitioning the real estate or personal estate, he may request the partition; in the case of no or unclear stipulation, a joint owner may request the partition where the basis for the common ownership disappears or he has certain significant reasons.
The loss of the basis of co-ownership shall be determined generally in terms of the extinguishment of common ownership relationship, for instance, such circumstances as divorce and separation of family property may constitute the loss of the basis of co-ownership. If a party requests division during the existence of the common ownership relationship, the cause shall be significant. The determination of a significant cause shall be varied for different basis of co-ownership. If one spouse requests to divide common property during marriage, the request shall conform to the circumstances as prescribed in Article 4 of the Interpretation (III) of the Supreme People's Court of Several Issues on the Application of the Marriage Law of the People's Republic of China: A spouse conceals, transfers, sells, destroys or squanders common property, fabricates joint debts, or commits any other conduct that seriously damages the community property; or a person to whom a spouse has a statutory obligation of support suffers from a serious illness and needs medical treatment, but the other spouse refuses to pay the relevant medical expenses.
(5) Handling a dispute in which, upon the death of the public house lessee, a roommate files an action, requesting to confirm that the person with household registered at the public house or the person actually residing therein is not a roommate, and requesting vacation and transfer.
In the tendentious opinion, upon the death of a public house lessee, the competent department of public housing or the property management department it entrusted shall determine a new lessee. Before such determination, it is inappropriate to accept such actions. In the case of acceptance, a ruling may be rendered to dismiss such actions.