The Interpretation (I) of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Property Law, as adopted at the 1670th session of the Judicial Committee of the Supreme People's Court on December 10, 2015, are hereby issued, and shall come into force on March 1, 2016.

　　Supreme People's Court

　　 February 22, 2016

Interpretation (2016) No. 5

Interpretation (I) of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Property Law

(Adopted at the 1670th meeting of the Judicial Committee of the Supreme People's Court on December 10, 2015, and effective as of March 1, 2016)

　　In order to correctly try cases of real right disputes, this interpretation is formulated in accordance with the relevant provisions of the the People's Republic of China property law and in combination with the practice of civil trial.

　　Article 1 If a dispute arises over the ownership of real property rights, as well as the sale, gift, mortgage, etc. that are the basis for the registration of real property rights, the parties shall accept a civil lawsuit in accordance with the law. The parties have already applied for the joint settlement of the above-mentioned civil disputes in the administrative proceedings, except where the people's court has tried them together.

Article 2 If the parties have evidence to prove that the records in the real estate register are inconsistent with the state of real rights, and they are the real rights holders of the real property rights, and they request confirmation that they enjoy the real rights, they shall be supported.

　　Article 3 After the registration of objection has lapsed for the reasons stipulated in the second paragraph of Article 19 of the Property Law, if the parties file a civil lawsuit requesting confirmation of the ownership of the property right, it shall be accepted in accordance with the law. The invalidation of the objection registration shall not affect the substantive trial of the case by the people's court.

　　Article 4 Where, without the consent of the right holder registered in advance, the ownership of real estate is transferred, or other real rights such as the right to use construction land, easement or mortgage are established, it shall be determined that it does not have the effect of real right in accordance with the provisions of the first paragraph of Article 20 of the property law.

　　Article 5 If an agreement on the purchase and sale of real property rights is found to be invalid, revoked or dissolved, or if the obligee registered in advance abandons the creditor's rights, it shall be deemed as the "extinction of creditor's rights" as mentioned in the second paragraph of Article 20 of the property law ".

　　Article 6 The transferor transfers ownership of ships, aircraft and motor vehicles, etc., and the transferee has paid the consideration and acquired possession, although not registered, but the creditor of the transferor claims that it is a "bona fide third party" as referred to in Article 24 of the Property Law, shall not support it, unless otherwise provided by law.

　　Article 7 The judgments, awards, and mediation statements made by the people's courts and arbitration commissions in cases of division of jointly owned immovable or movable property and effective in accordance with the law to change the original property rights relationship, as well as the auction transaction decisions made by the people's courts in the enforcement procedures The book and the order of debt against property shall be recognized as the legal documents of the people's court and arbitration committee that lead to the establishment, modification, transfer or elimination of property rights as mentioned in Article 28 of property rights.

　　Article 8 A real right holder who enjoys real rights in accordance with the provisions of Articles 28 to 30 of the Property Law, but has not yet completed the delivery of movable property or the registration of immovable property, shall request protection in accordance with the provisions of Articles 34 to 37 of the Property Law. Its real right shall be supported.

　　Article 9 When the subject of the right of the common share changes due to inheritance, bequest and other reasons, other co-owners who claim priority purchase shall not support it, unless otherwise agreed between the co-owners.

Article 10 The "equal conditions" referred to in Article 101 of the Property Law shall be determined by combining the transfer price of the common share, the mode of performance of the price and the time limit.

　　Article 11 During the exercise of the right of first refusal, if there is an agreement between the co-owners, it shall be dealt with in accordance with the agreement; if there is no agreement or the agreement is unclear, it shall be determined in accordance with the following circumstances:

　　(I) the period of exercise is stated in the notice given by the transferor to the other co-owners of the shares containing the same conditions, the period shall prevail;

　　 (II) 15 days if the period of exercise is not specified in the notice, or if the period specified is shorter than 15 days from the date of service of the notice;

(III) If the transferor fails to notify, it shall be 15 days from the date on which the other co-owners know or should know the final determination of the same conditions;

　　 (IV) If the transferor fails to notify and is unable to determine that other co-owners know or should know the same conditions as finally determined, it shall be six months from the date of the transfer of the ownership of the common share.

　　Article 12 Where a co-owner transfers his share to a person other than the co-owner, other co-owners shall, in accordance with the provisions of the law and judicial interpretation, request the purchase of the common share under the same conditions, shall be supported.

　　Other requests by co-owners in accordance with one of the following circumstances shall not be supported:

　　(I) Not claiming priority purchase within the period specified in Article 11 of this Interpretation, or although claiming priority purchase, but proposing substantive changes such as reducing the transfer price or increasing the burden on the transferor;

　　 (II) On the grounds that its right of first refusal has been infringed, it only requests the cancellation of the joint share transfer contract or the invalidity of the contract.

　　Article 13 The transfer of common shares between the co-owners by share, and other co-owners by share who claim priority purchase in accordance with the provisions of Article 101 of the Property Law, shall not be supported, unless otherwise agreed between the co-owners by share.

　　Article 14 If two or more co-owners claim priority purchase and negotiation fails, the request shall be supported in accordance with the proportion of their respective shares at the time of transfer.

　　Article 15 If the transferee, when transferring immovable or movable property, does not know that the transferor has no right of disposition and has no gross negligence, the transferee shall be deemed to be in good faith.

　　If the true right holder claims that the transferee does not constitute good faith, he shall bear the burden of proof.

　　Article 16 Under any of the following circumstances, the transferee of immovable property shall be deemed to know that the transferor has no right of disposition:

　　(I) The existence of a valid registration of objections on the register;

　　 (II)Within the validity period of advance notice registration, without the consent of the obligee of advance notice registration;

　　 (II) The register has recorded the relevant matters of the judicial or administrative organ's ruling or decision to seal up or restrict the real estate rights in other forms;

　　(IV) The assignee knows that the subject of the right entered in the register is wrong;

　　(V) The transferee knows that others have been legally entitled to real property rights.

　　If the real right holder has evidence to prove that the transferee of immovable property should have known that the transferor had no right of disposition, the transferee shall be found to have gross negligence.

　　Article 17 When the transferee assigns the movable property, if the object, place or timing of the transaction does not conform to the trading habits, the transferee shall be determined to have gross negligence.

Article 18 The term "when the transferee assigns the immovable or movable property" as mentioned in the first paragraph of Article 106 of the Property Law refers to the time when the registration of the transfer of real property rights or the delivery of movable property is completed in accordance with the law.

　　If the parties deliver the movable property in the manner provided for in Article 25 of the Property Law, the time when the legal act of transferring the movable property becomes effective is when the movable property is delivered; if the parties deliver the movable property in the manner provided for in Article 26 of the Property Law, the agreement between the transferor and the transferee on the transfer of the right to return the original property becomes effective when the movable property is delivered.

　　If the law provides otherwise for the establishment of real or movable property rights, it shall be determined whether the right holder is in good faith in accordance with the time prescribed by law.

　　Article 19 The term "reasonable price" as mentioned in the second paragraph of the first paragraph of Article 106 of the Property Law shall be determined in accordance with the nature, quantity and payment method of the subject matter of the transfer, with reference to the market price of the place of transaction at the time of transfer and factors such as trading habits.

　　Article 20 Where the transferor delivers the ships, aircraft and motor vehicles as stipulated in Article 24 of the Property Law to the transferee, it shall be deemed to meet the conditions for bona fide acquisition as stipulated in the third paragraph of the first paragraph of Article 106 of the Property Law.

　　Article 21 Under any of the following circumstances, the transferee's claim to acquire ownership in accordance with Article 106 of the Property Law shall not be supported:

　　(I) The contract of assignment is found to be null and void for violating Article 52 of the Contract Law;

　　(II) The contract of assignment is revoked for legal reasons such as fraud, coercion or taking advantage of the assignee.

　　Article 22 This Interpretation shall come into force as of March 1, 2016.

　　This Interpretation shall apply to cases of first instance newly accepted by the people's courts after the implementation of this Interpretation.

　　This Interpretation shall not apply to cases of first and second instance that have been accepted by the people's court before the implementation of this Interpretation and have not been concluded after the implementation of this Interpretation, as well as cases that have been final before the implementation of this Interpretation and that have been applied for retrial or decided to retrial in accordance with the trial supervision procedures after the implementation of this Interpretation.