Analysis of legal issues concerning property rights arising from the "Interim Regulations on Real Estate Registration" and legislative suggestions

Real estate registration is an important system established by the Property Law. Its purpose is to protect the static order and dynamic security of real estate property rights. Although the current Property Law makes certain provisions on the effectiveness review methods and responsibility assumptions of real estate registration, the provisions are not specific and detailed, affecting its implementation. Under such circumstances, on November 24, 2014, the State Council promulgated the "Interim Regulations on Real Estate Registration", which came into effect on January 1, 2015. In the "Interim Regulations", more detailed provisions are made on the efficiency procedures, review methods, and responsibility assumptions of real estate registration, which are the main basis for real estate registration in China at present.

                                                I. Legal Issues of Right Confirmation Arising from the "Interim Regulations on Real Estate Registration"
(I) Compensation Liability for Registration Errors by Real Estate Registration Institutions
Article 21 of the Property Law stipulates: "If a party provides false materials to apply for registration and causes damage to others, it shall bear the liability for compensation. If damage is caused to others due to registration errors, the registration institution shall bear the liability for compensation. After the registration institution compensates, it may seek recourse from the person who caused the registration error." Although this provision establishes in legislation that the real estate registration institution should bear the liability for compensation for registration errors, the provision is rather vague. It does not clearly define the nature of the registration error, nor does it clearly define the nature of the liability for compensation. It is unclear whether the registration error constitutes a work mistake or administrative responsibility, and whether the liability for compensation is state compensation liability or civil compensation liability. The principle of attribution is also vague, whether it adopts the fault liability principle or the no-fault liability principle. The existing legal provisions do not provide a clear explanation, especially when there is a mixed fault between the applicant and the registration institution. There is no clear division of the responsibilities each should bear. Article 29 of the "Interim Regulations" stipulates: "If a real estate registration organ makes a registration error that causes damage to others, or if a party provides false materials to apply for registration and causes damage to others, it shall bear the liability for compensation in accordance with the provisions of the "Property Law of the People's Republic of China." From this provision, it does not further refine the provisions of Article 21 of the Property Law, only simply pointing the liability for compensation to the Property Law. Article 30 stipulates: "If a real estate registration institution worker makes a false registration, destroys or forges the real estate register, arbitrarily modifies registered matters, or engages in other acts of abuse of power or neglect of duty, he or she shall be given disciplinary action in accordance with the law; if damage is caused to others, he or she shall bear the liability for compensation in accordance with the law; if a crime is constituted, he or she shall be investigated for criminal responsibility in accordance with the law." In Article 30, although the main manifestations of registration errors are stipulated, such as false registration, destruction, forgery of real estate registers, arbitrary modification of registered matters, and abuse of power or neglect of duty, and the adverse liabilities they bear are divided into three types: disciplinary action, liability for compensation, and criminal liability. Although it appears to refine the relevant provisions of the Property Law, it actually increases the difficulty of understanding and application. On the one hand, the nature of the liability for compensation is still not clearly defined, and the form and method of disciplinary action are not clearly defined. It is still unclear what kind of responsibility should be borne within the unit. In addition, in damage compensation, whether it is borne directly by the staff, by the unit, or by the real estate registration institution, and whether recourse is sought from the staff after the real estate registration institution bears the liability for compensation, these issues are not clearly reflected, naturally affecting the effectiveness of implementation and the legitimate rights and interests of the property owner.

(II) Unregisterable Issues Arising During the Change of Real Estate Certificates

After the implementation of the Interim Regulations on Real Estate Registration, all property certificates before the implementation need to be changed to real estate certificates. In this process of change, many legal issues have arisen that should be given sufficient attention by legislators, especially in the process of changing housing property certificates to real estate certificates. Before the implementation of the Interim Regulations on Real Estate Registration, commodity housing property rights adopted the method of separating the two certificates, that is, the land certificate and the ownership certificate were separated, and there was no necessary connection between the two certificates. In practice, land certificates can be divided into two situations, that is, a unified large certificate and individual land property certificates, and the land property rights will not affect the transfer registration of the house ownership certificate. Article 16 Applicants should submit the following materials and be responsible for the authenticity of the application materials: "(3) Relevant materials proving the source of real estate ownership, documents proving the reason for registration, and real estate ownership certificates;" For commercial housing, its real estate ownership, source proof materials, and real estate ownership certificates are mainly land certificates and housing property certificates. In this case, if the two certificates are incomplete, some legal issues will arise in the process of changing real estate certificates. The first problem is that if the original land certificate is a unified large certificate and the rights have not been divided, a single housing property certificate cannot be used to change real estate registration. Second, if the original land certificate is a unified large certificate, and during the process of dividing the rights, it is found that the area of the ownership certificate number does not match the actual area, or the nature of the land is not for residential use but for industrial use, these two situations belong to the defects of the land certificate, and in this case, the housing property certificate cannot be changed to a real estate certificate. In early February 2017, Beijing News and other media outlets exposed that in Yanjiao, east of Beijing, many residential areas had their housing property certificates withheld because the nature of the land use rights was not residential land, but industrial land, resulting in the inability to change them. There are also many cases where, because of inconsistencies between the comprehensive land property rights and the actual usable area in newly developed and old residential areas that were developed in batches, defects exist in the land certificates, making it impossible to complete the change to real estate certificates. This is also an important right confirmation legal issue that has arisen after the implementation of the "Interim Regulations on Real Estate Registration".

II. Legislative Suggestions on Right Confirmation Legal Issues in the "Interim Regulations on Real Estate Registration"

(I) Improvement of Compensation Liability for Registration Errors by Real Estate Registration Institutions

1. Nature of Real Estate Registration Institutions
Based on the nature of the real estate registration institution, the characteristics of the registration behavior, and the legal consequences, it can be determined that real estate registration is an administrative confirmation act. Article 6 of the Interim Regulations stipulates: "The State Council's land and resources authorities are responsible for guiding and supervising the national real estate registration work. Local people's governments at or above the county level shall designate one department as the real estate registration institution in their administrative region, responsible for real estate registration work, and accept the guidance and supervision of the superior people's government's real estate registration authorities." In the real estate registration work in various places, the power is given to the land management department. The land management department is a typical administrative management organ, but the actions of the administrative management organ are not all administrative actions. Whether the real estate registration behavior is an administrative action mainly depends on whether the behavior is an action with legal significance made by the land management department using its administrative power. From the division of real estate registration powers, it is clear that the land management organ obtains its powers from the "Interim Regulations on Real Estate Registration". The legal consequence of registration is the legal confirmation of the property owner's real estate property rights, which is an administrative property rights confirmation action, including the basic procedures of confirmation such as determination, identification, appraisal, proof, and registration.

2. Nature, Rules, Principles, and Responsibility Assumption of Compensation Liability for Registration Errors by Real Estate Registration Institutions

(1) Clarify that the method of assuming responsibility for registration errors is state compensation

Based on the handling of real estate registration disputes involving real estate registration authorities in recent years, most disputes have been resolved through administrative litigation, with only a very small number resolved through civil litigation. According to "Several Provisions of the Supreme People's Court on Trying Cases of Housing Registration", disputes arising from property registration are administrative disputes. In such cases, compensation for damages caused by registration errors is subject to state compensation. This point should be clearly reflected in future legislation, including the "Real Estate Registration Regulations" and its related implementation rules, which will be formally promulgated and implemented, clearly specifying that the method of liability assumption is state compensation.

(2) Clarify that the rule for assuming responsibility is the presumption of fault principle.

Regarding the principle of attribution of liability for compensation for registration errors by real estate registration institutions, the newly revised and implemented "State Compensation Law" deleted the original "illegal" attribution principle and only stipulated the "rule principle", which has created some uncertainty regarding the principle of attribution of liability for compensation for registration errors by real estate registration institutions. This needs to address the current "State Compensation Law". According to the provisions of the first three items of Article 4, the illegal principle is still the main principle for administrative liability compensation. However, according to Article 21 of the "Property Law", the rule principle of liability for compensation for registration institutions has the choice between the no-fault liability principle and the fault liability principle. The author believes that, combining the state compensation liability rule principle with the illegal principle, the rule principle of liability for compensation for registration institutions should be the presumed fault liability principle, for the following reasons. First, the no-fault liability principle means that the registration institution needs to bear the compensation liability for all registration errors, which is clearly unreasonable. If the registration error is caused by the parties, such as providing false materials or fabricating false transactions, and the registration institution has no direct responsibility, the compensation liability should not be borne by the registration institution, but by the parties themselves. Second, if the "illegal rule principle" in the "State Compensation Law" is applied, when the registration error is not due to illegal acts but only to work errors of the registration authority, it is excluded from the scope of state compensation, which is clearly inconsistent with the relevant provisions of the "Property Law". Here, the "rule principle" in the "State Compensation Law" should be understood as a diversified rule principle, which includes the presumed fault rule principle.

(3) Clearly stipulate the right of the parties to initiate civil litigation.

The current "Interim Regulations on Real Estate Registration" does not stipulate the issue of liability assumption for both the registration institution and the registration applicant. How to divide the liability of both parties, whether to assume joint and several liability or several liability, and how to resolve the overlapping issue of administrative compensation liability and civil liability. Currently, scholars mainly have two viewpoints, that is, adopting a several method to divide the responsibilities of both parties. However, some scholars believe that it is joint and several liability because it is difficult to divide the respective proportions; in terms of litigation methods, some advocate single administrative litigation, while others advocate the simultaneous conduct of civil and administrative litigation. Let's first talk about the division of responsibility. If it is joint and several liability, it will create a problem of compensation recovery, so whether the state pays the compensation first or the registration applicant pays first, and then the state pays it to the registration applicant, and how the state and the registration applicant divide the responsibility are all lacking clear legal provisions in practice. If the liability is divided according to several liability, it can be divided into primary and secondary liability, or equal liability, which can be divided according to 3:7 or 5:5 in judicial practice, which is more operable in judicial practice. Therefore, the method of assuming liability for both the registration institution and the registration applicant can be clearly stipulated as several liability in future legislation. As for the issue of litigation, adopting a single administrative litigation method is not advisable. Administrative litigation can only solve administrative violations but cannot solve the issue of civil compensation, and the damage is caused by two different entities. In this case, the injured person should be granted the right to simultaneously file administrative and civil litigation.

(II) Countermeasures for Unregistered Issues Arising During the Change of Real Estate Certificates

Unregistered issues arising during the change of real estate certificates should be analyzed on a case-by-case basis, and different measures should be taken for different situations in the implementation rules.

1. Clarify the issue that the real estate certificate cannot be changed to an immovable property certificate for commercial housing built on industrial land.

Constructing commercial housing on industrial land and arbitrarily changing the use of land is a serious violation of the "Land Law". The land management department and the real estate management department are responsible for inspecting and supervising the development and construction units. The land management department should supervise the use of land and reclaim the land use right for those who arbitrarily change the land use right. The development cycle of commercial housing is very long, which may last for many years. If the land management department does not discover or deal with this issue during this period, it means that the land management department is negligent or has other behaviors. If this results in the inability of the commercial housing owner to change to an immovable property certificate, the owner and the right holder can file an administrative inaction lawsuit to hold the land management department accountable. Of course, this does not affect the right holder's pursuit of the responsibility of the real estate development enterprise. This point should be clearly stipulated in the "Real Estate Registration Regulations" that will be formally implemented in the future. In addition, the handling of real estate certificates requires three certificates to be complete. If the local real estate management department issued a real estate certificate without a land certificate, this is a typical administrative violation, and the parties can also hold the real estate management department accountable through administrative litigation. It is worth noting that the administrative litigation of the land management department and the administrative litigation of the real estate management department cannot be tried together, because they are two different litigations.