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Individual Sale And Purchase Of Residential Real Estate Loans Mortgage Legal Problem

Posted on:2006-12-15Degree:DoctorType:Dissertation
Country:ChinaCandidate:L Y TangFull Text:PDF
GTID:1116360155459115Subject:Civil and Commercial Law
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Since mortgage (a way of guarantee) was introduced from Hong Kong to China Mainland, in the transaction of commodity house for civilian use, it has become the first choice for the people who want to buy house, the most acceptable way for the bank to grant loans as well as the best way of payment for the seller to accept. However, in the rules that our country's legislature makes, this way of guarantee is still not acknowledged. Even, in the nationwide legislative rules, the word of "mortgage " has never been used formally. On the bases of basic conception related to commodity house for civilian use, the article briefly introduces the source of mortgage, which can be applied to both buyer and seller in the transaction of commodity house for civilian use during the period of time when China undertakes reform to transform the welfare-oriented public housing distribution system to housing commercialization. It also makes short comparison on the nature of mortgage in common law system, the one in Hong Kong and the one in China Mainland, and analyzes exhaustively on the legal nature of mortgage in theory. Then, it states in detail about the three major rules (transaction law, insurance law and loan law) involved in the whole process of mortgage and relevant contracts, and analyzes profoundly on the advantages and disadvantages of various kinds of contract, the rights and duties of different parties, etc.. At last, it makes the conclusion that, as a novel way of guarantee, mortgage should have a standing place in China' s property law.Besides Introduction and Conclusion, the full article is divided into two great parts: About Theory, About Practice. It is in all six small parts and 12 chapters.About Theory is divided into three parts. It is in all seven chapters. It introduces the fundamental conceptions related to commodity house for civilian use as well as the contents and difference amongst the common law system, Hong Kong and China Mainland. It also states the legal nature of mortgage as well as the common points and difference amongst mortgage and other types of guarantees. In short, these parts make a solid foundation in theory for the article to discuss problems further.The First Part: Basic knowledge about commodity house for civilian use. It is in all one chapter, analyzing six problems.From the first part to the fourth part, based on fundamental conceptions related to commodity house for civilian use: property, real estate, estates, house, etc., the article stresses the basic knowledge, such as definition, attribute, function , classification and difference of house, commodity house for civilian use and personal house, and makes an overall explanation, which certainly makes a solid foundation in theory for the article to discuss problems further.In the fifth parts, the article does an overall retrospect to the housing policy that our country implemented after the foundation of the state. It points out the drawback of the welfare-oriented public housing distribution system. It also introduces the process of housing reform. It points out that, since the early 1980s, our country began to sell the publicly-owned house in a price lower than its costs. By 1998, the system of welfare houses distribution of China's Mainland has been over formally. The fundamental nature of the housing system reform, is to resume goods attribute of the house, to turn the house from state plan products into the marketable goods, to turn the fixed assets of the publicly-owned unit into private assets which a nature person can enjoy intact ownership and be free to arrange.In the sixth parts, the article deepens questions, such as: the transaction of commodity house for civilian use, the real estate market, etc. It point out: the transaction of commodity house for civilian use is not only the exchange between money and house, but also reflects that buyer enjoys various kinds of tangible or invisible rights with legal meanings, and that he also has the duty to make registration besides undertaking the obligation to give payment for the house. The transaction of commodity house for civilian use can not do without the real estate market. In 1994, after implementation of "urban real estate manage law ", real estate market of our country had its birth. The result of house monetization and commercialization has quickened the development of real estate market of our country. The structure of real estate market of our country is roughly divided into three levels: The Primary Market is the one selling the right to use the land; Secondary Market is the one developing thereal estate after sale of right to use the land; Tertiary Market is the one making transaction of house after house comes into being. It was in the secondary market that commodity house for civilian use is bought and sold.The novelty of this chapter lies in that the definition of commodity house for civil use is not merely based on whether it has the nature of commodity, whether it has value and use value or whether it is marketable with currency. It defines commodity house for civil use like this: it is built for sale; it has intact property right and can be freely traded in market; it can be only sold by real estate developing enterprise.Its first character, "it is built for sale" , excludes the houses built by all kinds of units or units in charge of construction entrusted by other units to solve the housing problem of their workers and staff members and the houses built by citizens for civilian use with the approval of the authority from commodity house for civil use. These houses are just for people to live in, instead of being built for exchange and sale. Therefore, they are not commodity house for civil use.Its second character, "it has intact property right and can be freely traded in market" , excludes the welfare house, margin profit shelter house for the poor,, fund-raising house , unsafe house, economical house and so on ,which are houses with dual characteristics of goods and welfare in the special period of housing reform of our country , from commodity house for civil use. The owners of these houses can not enjoy the intact house property right at the beginning. If people want to sell them in market, they have to wait until certain period of time passes. Besides, people have to hand in the money for selling land retroactively. Therefore, this kind of personal house is not the commodity house for civil use.Its last character, "it can be only sold by real estate developing enterprise" , excludes houses which are already used and all kinds of houses sold by people in Tertiary Market (also call the old house , second-hand house ), from commodity house for civil use. As to commodity houses for civil use constructed by real estate developing enterprises, the seller should be real estate developing enterprises. And the house should be sold in Secondary Market. After the houses are sold, the owners will enjoy the intact property right to the commodity houses for civil use.The meaning of defining commodity house for civil use in this way lies in that itcan distinguish accurately between commodity house for civil use and non-commodity house for civil use from many different aspects. ①As for the subject who makes investment and does development, the subject of developing, investing and constructing commodity house for civil use is real estate developing enterprises. On the contrary, the houses invested and built by state- run enterprises and institutions, organs, groups and our country as well as houses built by individual citizens are not commodity house for civil use. ②As for purpose to invest and build houses: commodity house for civil use built by real estate developing enterprises is for profit. But, houses built by other subjects are to meet the need of the workers and staff members in their units. ③As for nature of investing and building houses, commodity house for civil use has the nature of profit-generating. But non-commodity house for civil use has the nature of welfare.④As for the people who live in the houses; commodity house for civil use is sold in public. As long as people can afford to buy it and are willing to buy them, no matter who they are, they can buy them. But, other houses are limited to a group of people, such as members inside the unit and family or individuals who have the lowest income or hitting low-income.⑤As for applicable rules, The development, management and selling behaviors of commodity house for civil use are carried on according to administrative statutes and rule. Besides, it is adjusted and controlled by the market. But other houses should be adjusted and controlled according to relevant housing policies of our country and welfare policies inside every unit.The Second Part The mortgage in China mainland. It is in all two chapters, analyzing two problems. This part gives short introduction about overview and content of the mortgage in the common law system and the one in Hong Kong. Then it makes necessary explanation on definition, category, related legal relation and characteristics of mortgage in China Mainland. Then, it makes comparison on mortgage in common law system, the one in Hong Kong and the one in China Mainland. Also, it discusses on the real situation of mortgage in the transaction of completed house, the necessity for mortgage in the transaction of completed house as well as the difference and common points between mortgage on completed house and uncompleted house. At last,the article put forwards an opinion, which is quite different from the mortgage in Hong Kong and is against the opinion amongst most Chinese scholars, namely, there is only mortgage on uncompleted house; completed house should be purchased with legal charge.The novelty of this part lies in that:1, unlike the definition of mortgage made by current rules, the article puts forward its own the definition of mortgage. In "urban real estate mortgage management method ", article3.4 states: "Mortgage refers to, after the buyer pays the first-phase house cost, the loaning bank will grant loan to help him to pay the rest of need cost. In return, the buyer pledges the house as a guarantee to pay back the loan. But, this article defines mortgage like this: " Mortgage means, after the buyer pays first-phase house cost according to certain proportion, the loaning bank help him give the rest of needed money to the seller; Then, the buyer hand in related documents to the bank as a pledge to return the loan. Meanwhile, the seller has the joint duty to pay back the loan." This definition shows: in China Mainland, the difference between charge and mortgage lies in that, there is only guarantee of property in the charge; but in mortgage, there is not only the guarantee of property, but also joint duty by developers to return the loan. Thus, mortgage has more pledges than charge. This definition also reveals one of the differences of the mortgage in China Mainland and the one in Hong Kong. That is: there is mortgage on completed house and mortgage on uncompleted house. As of November 1, 1984, all the completed house can not be purchased with mortgage, but legal charge.2, Article 34.2 of "Legal charge management method of the urban real estate" stipulates: "If using uncompleted commodity house for civilian use or the project under construction to make pledge, the organ in charge of registration should record it in the legal charge contract. If the real estate under legal charge is completed during the period of pledge, party should get the real estate right certificate from pledgor and apply for real estate pledge registration again. " This is similar to article 44 of "regulations on the transference of real estate and property management". Based on that, some people put forward an opinion: Before the house is completed, the recorded pledge made by the organ in charge of registration is mortgage; when buyer gets thereal estate right certificate and applies for real estate pledge registration again after the house is completed, mortgage is converted to legal charge on completed house. Thus, they think that there is only mortgage on uncompleted house and that completed house should be purchased with legal charge.This article disagrees with the above-mentioned views and put forward the following ideas: mortgage in China Mainland is different from the one in Hong Kong; there is mortgage on completed house as well as uncompleted house.As a matter of fact, the mortgage on completed house exists in reality: (l)When buyer needs loan to buy completed house, if the real estate developing enterprise does not have joint duty of mortgage, the loaning bank is not willing to grant loan to the buyer. Therefore, in order to sell houses as soon as possible, the real estate developing enterprise would also like to have joint duty of mortgage on completed house.(2)After commodity house for civilian use is completed and real estate right certificate is transferred, the loaning banks still ask the real estate developing enterprise to be joint mortgager of loan and interests before buyer return all the loans.(3)In the mortgage, the real estate developing enterprise not only has joint duty of mortgage during the time when the house is still under construction, but also has joint duty of mortgage on loan and interests after the house is completed; when there is force major and the payment offered by insurance company can not satisfy the loaning bank, the real estate developing enterprise continue to undertake the joint duty of mortgage; when mortgagor violates the contract and the contract is terminated by the loaning bank, the real estate developing enterprise should undertake the duty of mortgage to return the loan.It is really necessary for mortgage on completed house to exist in our country. After the relationship of mortgage is established, the loaning bank will grant the whole loan to the real estate developing enterprise, that is, when the mortgage contract becomes effective, the real estate developing enterprise will obtain its anticipated interests. But the loaning bank can only realize its interests only after the loan and interests are returned. When the buyer has no fault or there is force major, the loaning bank will not obtain its interests, let alone its loan. In such circumstance, if only let the loaning bank suffer the risk, and let the real estate developing enterprise, who havealready obtained its interests, have no duty of mortgage, it is certainly unfair. However, with the legal charge, the real estate developing enterprise makes profits without bear responsibility. Thus, only by adopting the mortgage, we could let the real estate developing enterprise bear joint liability and share losses. That is quite fair and square.The common characteristics of mortgage on completed house and mortgage on uncompleted house: The establishment of the two should be based on a contract in writing; the loan is for special use ,and it can be only used for paying the rest needed money to buy a house except the first-phase payment; Guarantee in a double warranty, including mortgage of property and mortgage of person; Mortgage right is all obtained through the legal act of concluding the loan mortgage contract of commodity house for civilian use.The difference between mortgage on completed house and mortgage on uncompleted house: the objects of mortgage are quite different; the nature of right is quite different; the virtual contents of registration for mortgage are quite different; the people who are in charge of management of objects and have duty of mortgage are quite different; the scope of. mortgage is quite different; the realization of right is also quite different.The Third Part The study on the nature of mortgage on commodity house for civilian use. It is in all four chapters, analyzing five problems. In this part, at the beginning, the article lists the four different opinions concerning the nature of mortgage made by the scholars in our country. They are as follows: mortgage is a way of legal charge of real estate; mortgage is similar to legal charge or can be called quasi-legal charge; mortgage on uncompleted house is a way of hypothecating right; mortgage is a way of remising warranty. Then the article puts forwards the writer' s own opinion on it, and makes profound and exhaustive statements about the relationship and difference amongst mortgage , legal charge, the way of hypothecating right and the way of remising warranty. In general, this article agrees that mortgage is a new way of warranty which is quite different from other ways of warranty, and proves that mortgage can not be used with conservation of ownership right.Firstly, on legal charge of real estate, quasi-legal charge and mortgage, there arethree novel points:1 , According to the theory that the object of mortgage should be specific, the article put forwards that legal charge can not be used in uncompleted house. The object of legal charge must be completed house; the object of mortgage can be completed house or uncompleted house. There are three defects if people use article 3.4 of "urban real estate mortgage management method " as the rules regulating legal charge on uncompleted house. (1)This regulation does not accord with article 39 of the Warranty Law on mortgage contract: the establishment of legal charge on commodity house for civilian use is not based on the following conditions, namely, giving the first-phase payment and signing contract of legal charge with the loaning bank; Only after the person who borrows money uses other houses or property with similar value as a warranty and signs the contract on legal charge with the loaning bank, the legal charge on the loan can be effective, and the loaning bank can grant loan to the applicant who want to borrow money. (2) Parts of conditions stipulated by this regulation accord with some conditions set by mortgage, such as giving the first-phase payment, using the purchased house as a warranty to return the loan and letting the loaning bank pay the rest of needed money to buy the house;(3)Many kinds of loan guarantee can be compatible with one other. Stressing that article 3.4 is about legal charge does not mean that it denies the existence of mortgage: Various kinds of guarantee can coexist and be not incompatible; the coexisting of many kinds of guarantee provide people with many choices when doing legal act and bring more benefits to protect their legal interests.2, As for article 47 of " Interpretations on the Warranty Law ", people can not. think the legal interpretation on the expecting right to uncompleted house acknowledges the right as the object of legal charge. The property right of real estate must be created by registration in the organs with legal authority. As for Article 34.2, which states the organ in charge of registration should "record it in the legal charge contract" before the house is completed and mortgagor obtains his the real estate right certificate, this article thinks that it is not registration of uncompleted house, which can not have the effect of legal charge on uncompleted house, and that only after the commodity house is completed and the mortgagor obtains his the real estateright certificate, namely, the house has been delivered to the buyer after the buyer applies for real estate pledge registration again, there can be the effect of legal charge on completed house.3, This article refutes all sorts of views which thinks legal charge can be used in uncompleted house and puts forward the author's opinion :With regard to the view, "legal charge can be used in uncompleted house because law has made strict limitation on uncompleted house, even though it is not completed yet." , the article points out: the law "which has made strict limitation on uncompleted house" refers to article 44 of " urban real estate manage law "; from its content of view, it is not the regulation for the need of buyer. The real reason is that buyer will bear great economic risk before the uncompleted house is completed and delivered to him. In order to protect the interests of buyer and assure the performance of contract for house transaction, even though buyer does not need to obtain loan from the loaning bank, the related rules would also be stipulated.With regard to the view, "there already exists the practice of legal charge on uncompleted house in all parts of our country, and there are distinct regulations about legal charge on uncompleted house in "urban real estate mortgage management method" ." , this article points out: there are also practices and regulations about mortgage on uncompleted house in all parts of our country. That is to say, the practices of financing the sale of uncompleted house are quite different in our country. In other words, even though there are distinct regulations about legal charge on uncompleted house in "urban real estate mortgage management method" , there still exist practices and regulations about mortgage on uncompleted house in all parts of our country, which also indicates that people need mortgage on commodity house for civilian use even more in reality.With regard to the view, "there are also examples of legal charge on uncompleted house in foreign legislature " , the article points out: Mortgage also stems from foreign countries but not Chinese local product.With regard to the view, " in the list of non-legal charged properties in "the Warranty Law" of our country, there is no prohibitive regulations about legal charge on uncompleted house" , the article points out: there is not any regulations about legalcharge on uncompleted house " urban real estate management law " and "the Warranty Law" ; As a matter of fact, there is not any prohibitive or mandatory regulations about legal charge on uncompleted house in the list of legal charged properties or non-legal charged properties enumerated by "the Warranty Law" of our country.Secondly, on the way of hypothecating right and mortgage, as for the view that mortgage is a way of hypothecating right, this chapter discusses them exhaustively on the base of their difference.Thirdly, on the way of remising warranty and mortgage, the article makes its own argument on the definition of remising warranty as well as the common points and difference between remising warranty and mortgage. The article proves that the way of remising warranty is different from mortgage in five aspects. As for the view that "the contents of right are different" is quite different from the views held by most scholars who think mortgage is different from legal charge. The article thinks the view that mortgage transfer or lose the right to disposal is wrong. It points out that there is no transference of right when the loaning bank deposits the mortgagor' s documents concerning his rights to the purchased house, and that it also does not mean the loaning bank has the right to disposal. There are two kinds of disposal. One is virtual disposal; the other is legal disposal. The person who has right of disposal does act according to the related rules, instead of the agreement made by the parties. And his right of disposal can be either virtual disposal or legal disposal. In the period of time when mortgage still exists, the loaning bank can not dispose freely the mortgaged commodity house for civilian use. It can not use the house as a warranty on other debts. It also can not transfer it to other people; If mortgagor can not return the loan when the term of loan is over, the loaning bank can not dispose directly the commodity house to its content. Moreover, it can not possess directly the commodity house. That is to say, the loaning bank can not dispose the commodity house virtually or legally. It can only dispose the house according to the agreements in the mortgage contract. When the bank makes auction or sells off the object of mortgage, although it may seem that the bank is disposing the object of mortgage, in fact, this kind of disposal is proceeding according to the agreement between the parties. It does not mean that the bank obtainsthe right to disposal when the bank disposes the commodity house according to agreement. Even though people may insist that the bank obtains the right to disposal, this right to disposal is quite different from legal disposal of ownership right. This article states that, before the loan is returned, the act that the bank deposits the mortgagor' s documents concerning his right to the purchased house is to restrict mortgagor' s right to disposal, not to transfer the right to disposal.Fourthly, after comparing mortgage and legal charge, the article concludes that there should be mortgage in " the Warranty Law" of our country. As for the adoption of mortgage or the way of remising warranty, this article states that mortgage is a new type of property right, and that it can coexist with the way of remising warranty.The insurmountable defects of the way of remising warranty are as follows: (1)In the case that the debtor does not perform his duty, because the creditor can obtain the ownership of related objects without involvement of liquidator, there is possibility that creditor gets sudden huge profits, and that debtor is confronted with the risk of losing his ownership right; Because there is lack of publication, the third party also has the risk of suffering loss.(2)There are many complex procedures in it, which lead to great inefficiency: when the buyer applies for the loan, he must transfer his ownership right to the loaning bank, make registration in the organs in charge of registration, pay certain taxes and costs, make publication and obtain related certificates. When the loan is returned, the buyer has to do the above-mentioned things once again in order to get back his ownership right. Because publication occupies much time, the long period of time for publications greatly affects the efficiency of transaction. Besides, the related costs will increase mortgagor' s burden.The advantages of mortgage are as follows: (l)It can make balance between parties so that the buyer can use little money to by the commodity house in a short period of time and get rights concerning the purchased house. The real estate developing enterprise can sell commodity houses quickly so that the circulation of funds will be quickened. Consequently, there will be better economic and social benefits; under the condition that the real estate developing enterprise is also guarantor of the loan, the risk of bank will be greatly reduce, and the bank will have moreinterests. Thus, mortgage can benefit all the parties in such kind of economic activities. (2)Mortgage does not transfer ownership right to the loaning bank, which can correct effectively the unfairness that the creditor dominates all the values of the objects under warranty so as to reduce the possibility that creditor obtain sudden huge profits. (3) Mortgage is more flexible. It can enhance the working efficiency, reduce the unnecessary procedures and lower the costs of granting loans.In conclusion, mortgage does not have the defects the way of remising warranty has, and can achieve the same effect the way of remising warranty makes. Thus, mortgage should have its own standing point as one of the property rights in the future.Fifthly, on conservation of ownership right and mortgage, the article points out that, as for research on mortgage, almost nobody analyzes the relationship between conservation of ownership right and mortgage.When completed house is sold, the real estate developing enterprise should help the buyer obtain the ownership certificate of the purchased house, and the buyer hands in it to the loaning bank as a warranty of debt. If the buyer does not return the loan, the real estate developing enterprise has the duty to buy the house, and the ownership right will belong to the real estate developing enterprise. Therefore, there is a problem concerning carrying out the ownership certificate once again. As a matter of fact, as long as the buyer buys the commodity house by means of mortgage, there is no above-mentioned possibility, let alone the problem concerning carrying out the ownership certificate once again. Carrying out the ownership certificate needs a series of procedures and expenses, such as applying, paying the fees, paying taxes, announcement, etc. Article 134 of "the Contract Law "stipulates a institution called conservation of ownership right. As for the problem of. buying house be means of mortgage, should people adopt conservation of ownership right? Before the buyer returns the loan, the real estate developing enterprise does not need to help the buyer carry out the ownership certificate. The ownership right belongs to the real estate developing enterprise. After the buyer returns the loan and interests, he can carry out the ownership certificate of the purchased house.The article thinks that people can not apply conservation of ownership right to the transaction of commodity house. The reasons for that are as follows:(1)Only the seller and the buyer are involved in conservation of ownership right. There are not any third parties in it. Thus, there is no bank to participate in. Conservation of ownership right can happen before the loan is returned, and it can not happen after the loan is returned. Because, in mortgage, there is a third party (the bank) in the legal relation of the transaction, and because seller obtains all the payments after the mortgage contract is created, conservation of ownership right can not be applied to the transaction of commodity house. (2)In the mortgage of commodity house for civilian use, if conservation of ownership right is applied in it, there will be the disorder of rights: the real estate developing enterprise obtains the payment and conserves the ownership right; the buyer gives the payment, but does not have the ownership right; the seller gets the loan, but does not need to offer guarantee; the bank gives the loan to the buyer, but he real estate developing enterprise enjoys the warranty. The result of this disorder of rights is that, if he real estate developing enterprise violates the contract, the seller and the buyer will suffer the loss, and they can not have legal protection to safeguard their interests. If the buyer does not enjoy the ownership right, why should he give warranty to the loaning bank? If the buyer does not return the loan and the real estate developing enterprise does not agree to use the house to pay back the loan, how to protect the bank' s interest? If the real estate developing enterprise, as the owner of the commodity house, sells the house again, what kinds of rules people can use to protect the buyer' s interests? (3)There are two ways to sell commodity house for civilian use. One is to sell it before it is completed; the other is to sell it after it is completed. Because people can not make registration before commodity house is completed, there is no problem about conservation of ownership right; there are act of duty and act of property in the transaction of completed house. If conservation of ownership right is applied in the transaction, the transaction can be effective without act of property. Consequently, it leads to that transaction of completed house can not be protected by the property law, and it certainly will reduce the legal protection to the transaction of completed house.About Practice is divided into three parts. It is in all five chapters. These parts introduce exhaustively the major procedure involved in mortgage on commodity house for civilian use, the contents of four main contracts, the problems in these contractsand the problems in the real practices, which need to be solved.The Fourth Part The procedure of mortgage on commodity house for civilian use and related contracts. It is in all two chapters. These parts introduce exhaustively the major procedure involved in mortgage on commodity house for civilian use, the contents of four main contracts: the collaborative project contracts of the real estate developing enterprise and the loaning bank, the transaction contract of commodity house for civilian use of the seller and the buyer, the insurance contract of the buyer and insurance company appointed by the loaning bank, the mortgage contract of the buyer and the loaning bank.The Fifth Part The problems related to mortgage on commodity house for civilian use. It is in all two chapters. This stresses...
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