The Regulation of Leasing Activities

Chinese law provides a national-level regulatory framework for leasing. Variation, however, can occur among different localities in respect of local regulations. Moreover, different customs exist in different localities, which can affect matters such as the amount of the rental bond, frequency of rental payments and whether subleasing is acceptable. In this chapter, we outline China’s national-level regulatory framework for leasing activities. Local regulations and practices are also discussed, though no attempt has been made to systematically address local regulations and practices. The leases discussed in this chapter involve the periodic payments of rental for the occupation of real estate premises, similar to leasing arrangements made elsewhere in the world. This is to be distinguished from the granting land use rights in China, which can also be referred to as leasing from the government. As discussed below, all land in China is owned either by the government or rural collectives. Government-owned land may be transferred to an individual or company for a certain period of time (between 40 and 70 years, depending on the usage) in exchange for the payment of money. This arrangement is sometimes referred as granting of the land use right or lease of land. For the purpose of this chapter, our discussion does not include the granting of land use rights, which is regulated under a different regulatory regime.