The Sequence Of Rights On Buildings And Its Realization In Bankruptcy Procedure

In bankruptcy liquidation process, rules for bankruptcy property settlementreflect the principle of fair settlement proposed by the bankruptcy law. Besides,different positions can be held for various debtor-creditor relationships in liquidationprocedure. Different principals may have both various creditor’s rights and debt whenthe liquidation procedure is started, for which full attention shall be given in thebankruptcy procedure.Due to the special nature of the real estate industry, real estate developmententerprises are also enterprises of a special type which are bound to specialdebtor-creditor relationship in the operation process. In case of bankruptcy liquidation,severe fighting on the sequence of compensation centering on all fixed assets of thedeveloper, buildings in particular, will occur. Among various rights affiliated tobuildings, the conflict between the priority to compensation for construction projectprice and other rights is prominent. Besides, there are also many obstacles andproblems for the exercise and realization of the priority to compensation forconstruction project price in the bankruptcy procedure.Due to various reasons, errors of different degree can be commonly observed inbankruptcy practice on the treatment of conflict among rights in relation to buildings,the realization of the priority to compensation for construction project price and otherproblems. Further study, improvement and modification of related laws and regulations shall be conducted. Moreover, in judicial practice process, it is necessaryto deeply understand and flexibly apply related laws and regulations to effectivelyprotect the lawful rights and interests of the parties. On research of conflict among allkinds of rights in relation to buildings and the sequence of compensation, this paperapplies multiple methods like legal analysis, comparative analysis, case analysis andothers, proposes new ideas and concepts on conflicts between the priority tocompensation for construction project price and other rights in relation to buildings aswell as the legal identification of the sequence of compensation; through analysis andcombining actual situation of legal regulations and judicial practice, this paperproposes new countermeasures or solutions on the exercise and realization problemsof the priority to compensation for construction project price in bankruptcy procedure.This paper is mainly composed of four parts. Chapter one mainly discusses thepositioning of the priority to compensation for construction project price and otherpriorities in bankruptcy procedure. Through analysis and research, this chapter first ofall illustrates that there are both consistence and conflicts between value goal of thebankruptcy procedure and priorities in the bankruptcy procedure and that it isnecessary to standardize the bankruptcy procedure and sort out creditor’s rights anddebt according to laws in judicial practice and to correctly treat and solve relatedconflicts. Next, according to existing legal regulations, this chapter also analyzes thelegal attribute of priority to compensation for construction project price to be prior toordinary creditor’s rights. Finally, this chapter discusses legal causes for the priority tocompensation for construction project price to be prior to agreed mortgage and taxpriority and other priorities of the second class. Chapter two discusses conflictsbetween the priority to compensation for construction project price and other rightsunder different situations. It mainly analyzes that the claim right for personal injurycaused in relation to the project before the project delivery and the claim formaintenance fee by the unit performing warranty obligation after project deliveryshall be compensated prior to the priority to compensation for construction projectprice; it discusses the unreasonableness of the legislation according to whichconsumer’s house purchasing rights confront with the priority to compensation for construction project price; the position is proposed that the judicial office shall holdstrict review altitude for this; this chapter also discusses that the judicial office shallstrictly examine and restrict project ownership being transferred when identify thesequence of assigned project ownership and the priority to compensation forconstruction project price. Chapter three discusses barriers for the exercise of thepriority to compensation for construction project price in bankruptcy procedure. Thefirst section specifies that the priority to compensation for construction project priceshall usually be exercised by means of civil action rather than directly applying to thepeople’s court for discounting or auction, and that the priority to compensation forconstruction project price shall also be realized by the procedure of creditor’s rightdeclaration-manager’s review-creditor meeting examination-ruling anddetermination by the people’s court-debtor’s property realization-managerdistribution in bankruptcy procedure. The second section proposes that the legalsituation for the suspending of exercise of priority to compensation for constructionproject price in reorganization procedure is too narrow and shall be improved bysupplementation, and that the contractor shall make full use of the voting mechanismprovided in article82in the Enterprise Bankruptcy Law and the coordinationmechanism provided in article87in the Enterprise Bankruptcy Law, striving forliquidation of debts by the debtor as soon as possible and as much as possible. Thethird section discusses the unreasonableness of the provision that “the guarantee rightshall not be exercised until the date of ruling and reconciliation made by the people’scourt” in the Enterprise Bankruptcy Law as well as the improvement solution. It alsodiscusses the treatment on the loss of the obligee caused by the delayed exercise ofguarantee right due to the reconciliation procedure, the responsibility for thebankruptcy administrator for the realization of the guarantee right, the relief channelof the obligee when the administrator fails to perform its responsibility and otherproblems. The fourth section discusses the way to exercise the priority tocompensation for construction project price in bankruptcy procedure-it shall beexercised through the bankruptcy procedure rather than the execution procedure anddiscusses that the way to determine the compensation scope for the priority to compensation for construction project price from perspectives of efficiencyimprovement and cost reduction in the bankruptcy procedure. The last part makessummary of conclusions based on analysis before.