Study On The Priority Of Construction Project Price Priority

Contract law in article 286 th formally established the system of construction paid in priority in 1999.In judicial practice, more and more cases are claimed to apply the system of construction paid in priority, article 286 of Contract law gradually exposes various deficiencies, such as too vague, not specific enough, and does not have the maneuverability and so forth. In order to resolve the before-mentioned problems, The Supreme People’s Court issued an important judicial interpretation, the concrete contents are,(1)The court should be in accordance with the "contract law of the people’s Republic of China 286 th, and firmly believe that contractors do have the priority right in terms of other mortgages and other debts when in the trial of cases concerning real estate disputes and cases for the implementation.(2)The contractors should have no priority on the real estate project when consumers have payed all or most of the commercial housing funds.(3)Construction project cost of construction projects include the cost that the contractors shall pay the staff remuneration, and material models of actual expenses, not include the cost that the contractors payed for the loss by default.(4)The period for the performance of the priority is six months, counting from the date of completion of the construction project or a completion date that both agreed in the construction project contract.The judicial interpretation resolved the problems about the level and effectiveness of the priority, the realm of warranty, and the protection for the consumer’ legitimate interests in some extent. But it should be noted that, due to the low effectiveness of the judicial interpretation, there are still many a headache problems still in hot debate.In terms of the nature of contractors’ priority, this is a controversial issue whether in theory or in practice area. The typical opinions are the Lien said, legal mortgage, legal priority and comprehensive etc. This paper in the second chapter introduces the main content of the above opinions in detail.As everyone knows, the development of the construction industry and real estate industry is an important indicator to measure the development of the national economy in china. The price of construction claim is a kind of creditor’s rights, but the rights related to the beneficial to the people’s livelihood, related to the overall national development, therefore need to be protected in a special way. Many countries in the world on the basis of its legislative policy and value orientation, design and construct the priority legislation mode with its own characteristics. The second chapter from the perspective of comparative law, introduces the priority of legislative mode with Japanese characteristics, the design of Taiwan area legal mortgage mode, and the countries of Anglo American law system of the lien mode. How to build Chinese characteristics and in line with the national conditions of our country legislation pattern for the development of a preliminary inquiry? we believe that, in the same security system, legal mortgage and priority are not incompatible, but could run parallel. Whether a nation or a region start to set up priority system or legal mortgage system, the factors that should be taking into account are not only the traditionally national or regional legislation, the harmony between the civil law system, but also the legislative policy and legal value orientation of the country or region, especially for the priority that obviously indicate civil justice in real construction project. Our existing legislation is also a mixed situation of priority and legal mortgage.As to the view about the establishment conditions of contractors’ priority,the author considers that there is still room for discussion, and in the third chapter, the establishment of elements is necessary to put forward their own views, such as the project construction contract is invalid, the contractor’s priority is to determine the possibility. Contractors’ priority on unfinished project, whether the pre-negotiation procedure is necessary, how to estimate the reasonable period. On the priority right to be repaid by the method of changing the orientation of registration mode, namely, the priority of claim in construction project has the necessity and significance of registration, the author carried on the full proof in the third section of the third chapter, and the protection of rights and interests about the contractor in registration mode is not decreased in essence.The fourth chapter is mainly about the validity of contractors’ priority. The realm of the priority right on the debt secured, the conflict between the contractor and the purchase of consumer, the conflict and balance of interests between the contractor and financial institutions such as commercial banks. Construction priority claim the actual expenditure, and should be reasonable to the construction contract as the basis and expenses. In addition, the loaning money shall be included in the scope of priority. The implementation process of contractors’ priority in construction project is the.battlefield of all the parties, that is, the conflict of interests. How to balance between the contractors, consumers, the commercial banks and other financial institutions, is the essential problem need to be resolved. The priority of the conflict and balance of interest in the implementation is described in detail at this chapter.When the contractor starts to perform the priority right, neglect the rights and interests of confrontation between the consumers and the contractor, but there is a key problem need to pay attention, namely, how to handle the money that consumers have payed and the one that have not payed. The author acclaims that we should spare no effort to protect the legitimate rights of consumers,and then puts forward suggestions in two different cases. The one is when consumers paid more than half of the money, although the house no longer belongs to the priority of the subject, consumers should continue to pay the remaining funds, the contractor may require the developer to make a pledge to the contractor as a guarantee. The other one is when consumer’s payment has not been more than half of the cases, the housing has been incorporated into the priority for repayment, after the auction, the sale of the construction project should be timely extracted and return the purchase of consumer payments.On the protection of the rights and interests of the commercial banks and other financial institutions, financial institutions themselves still have very advantageous position in the risk, financial institutions have the ability towards the mortgage right of the construction and have the capacity to control the risk to a minimum, such as audit the construction contracts signed by both parties seriously. When estimate the value of the mortgaged property in the final confirmation, they could get rid of the price that the developer shall pay for the project. Although the final price is determined by the construction contract and the actual construction process whether there is additional visa, for the final project price interval, we believe that banks and other financial institutions are able to make a reasonable estimation. In addition, financial institutions could actively involved in the implementation of priority, such as the independent claim third people to participate in the proceedings, to supervise the project discount auction, in case of the shrink risk. In order to solve the problem of the implementation of construction project price priority, we may face difficulties and confusion in the implementation process, we should seek the balance point between the rights and interests protecting of all the related parties in the construction project.In terms of the performance of priority, we have a detail analysis at the fifth part,and from the dynamic point of view. First of all, as for designer, investigator, the subcontractor of the construction, whether they have the right to acclaim priority. That should not be subject to the exercise of the priority of claim in construction project for expanding interpretation, and it should be strictly limited to construction contract, and is not suitable for reconnaissance. For the project construction contract segment, such as curtain wall construction, as we all know, decoration contract is a contract category, is a construction contract segment. Therefore, the application of "contract law" article 286 th is established and has sufficient legal basis. When the construction of the priority right to be repaid and the project price priority claim occurred in the same time, each party has the right to enjoy the priority of compensation according to the scope of the exercise of the rights of division and engineering can be used to calculate the cost of parties. The corresponding partial or itemized cost ratio method to divide the priority share. Decoration engineering contractor to exercise the priority claim right for the value range of value-added part of the building, which is the standard for decoration and value increase.For the subcontractor of the construction, they are constrained by the principle of the private contract, the right to claim can not be directly to the construction of the developer. In the general contractor, subcontractor that without justification fails to exercise the priority of claim in construction project, and thus damage the interests of subcontractors, they could claim, but not the price of construction contract claims priority, only the engineering claims. According to the "contract law" article seventy-third, the creditor has the right of subrogation and it should be enjoyed by the debtor and the debt of secondary debtor has already expired. The project price priority claim is an important guarantee of construction claims to achieve, but it is not for the right of subrogation due payment. Second, analysis the way of exercise, the realm that can claim priority for repayment and whether the contractors have the right to abandon the priority right. The way of exercise includes that the contractor and developer arrive at an agreement, besides, the contractor could sue the court for litigation of payment of construction contractor, or directly apply to the court to start the auction process. The priority claim in construction project should satisfy all the elements.When it comes to whether the contractor has own right to dispose the priority right, such as give up and so forth. The author firmly convinced that as long as it does not violate the mandatory regulation and the effectiveness of the law, administrative rules and regulations in the code, we shall approve of the validity of this behavior. However, when all the elements of project priority of claim are not yet satisfied, the indication of abandon made by the contractor could also be valid, and the nature of this kind of abandon is pre-giving up, it is a kind of self promise restrictions that the contractor made to the developer or to any other third person. In all, if law and administrative regulations have no prohibition, and there is no obvious unfairness or stress under the contract, the abandon behaviors made by contractors under the before-mentioned two different situations shall be surely valid and have their legitimate effects.