01
In China, they buy an object and the right to use the land
Land in cities belongs to the state; Rural and suburban land is generally collectively owned unless the law classifies it as state land. For a commercial project, the key title is usually a time-limited right to use state-owned construction land. The building itself, land title, purpose and registration record are analyzed together.
- Ownership
- The owner of the land is the state or rural collective
- Land-use right
- Paid provision, allocation, lease or other regime provided by law
- Purpose
- Industrial, commercial, office, residential, logistics and other approved purpose
- Building
- The right to a building and land-use right must form a consistent chain
- Registration
- Creation, transfer, mortgage and other changes are verified by the register
02
Foreign status is checked separately from a regular transaction
A foreign company, its Chinese enterprise, representative office and individual have different access to facilities. For independent development or investment activities, the Foreign Investment Negative List, business scope, requirements for commercial presence, capital and foreign exchange financing are checked. Purchasing for personal use depends on the buyer's status and local city regulations.
You need a city, type of object, purpose, buyer and source of funds. For example, the official Beijing investment portal specifies certain conditions for a foreign enterprise to purchase non-residential premises for its own office; in another city, the set of documents and restrictions may differ.
03
Real estate due diligence begins with the cadastral and design file
The extract or certificate does not replace verification of the original grant of land, payment of land grant premium, approved use, period, boundaries, building, planning and actual use. For an object in a company, corporate, debt, tax and litigation checks of the owner are added.
- Title
- Copyright holder, object, area, period, purpose and history of transitions
- Encumbrances
- Mortgage, arrest, pre-registration, lease, easement and dispute
- Land contract
- Grant/transfer contract, premium, development covenants and change of use
- Permits
- Planning, construction, fire, EIA, completion acceptance and operational licenses
- Physical
- Survey, access, utilities, defects, contamination and registry compliance
- Economics
- Tenants, deposits, debt, taxes, service charges and capex
04
The transfer of rights is completed by registration, not payment
The contract binds the object, price, deposit, closing conditions, release of encumbrances, transfer of documents and the risk of refusal of registration. Before closing, consents, taxes and the possibility of transferring land-use rights along with the building are confirmed. In a lease, the landlord's right, authority, registration or filing, assignment, fit-out, sublease, sale of the property and the right to early exit are checked.
Registered rights to the object are directly transferred; taxes, consents and technical status are analyzed.
The owner of the project company changes, but along with the asset, its obligations and violations remain.
Less capital, but dependent on the title and conduct of the lessor.
The agreement binds the requirements for the facility, construction, acceptance and commencement of the lease.
05
The price is modeled after determining the tax status of the parties
The transaction may affect the buyer's deed tax, VAT and surcharges, stamp tax, corporate or individual income tax, and the seller of the property - Land Appreciation Tax. The use of urban land may create an Urban and Town Land Use Tax; ownership and delivery of a building - real estate tax according to the applicable regime. Rates, incentives and local implementation are checked by city and transaction type.
- Deed tax
- Occurs during the transfer of land-use right or ownership of a building provided for by law
- LAT
- Calculated based on the increase in value with established deductions and a progressive scale
- VAT
- Varies by property, seller, history and applicable regime
- Withholding
- In a cross-border structure, the seller's income, PE, treaty and remittance are checked
- Allocation
- The treaty determines who bears a particular tax and what happens when reassessed
06
Development begins with the feasibility of the project on a specific site
Before purchasing or bidding, spatial planning, land quota, zoning, development intensity, floor area ratio, height, infrastructure obligations and industry tolerance are checked. Changing the purpose or parameters requires consent and may result in a new grant agreement, additional payment and re-approval.
- 01Investment decision
Project, industry, investor eligibility, approval or filing.
- 02Land route
Grant, tender/auction/listing, transfer, lease or acceptable collective land route.
- 03Planning conditions
Boundaries, purpose, indicators, transport, utilities and public facilities.
- 04Financeability
Capital, bank, mortgage, presale and restrictions on the use of funds.
07
Permissions form a sequential chain
The set and names of procedures depend on the project and location, but usually the investment procedure, land-use approval, construction land planning permit, construction project planning permit, review of project documentation, construction permit, EIA, fire and special industry permits are analyzed. Starting work before the required permit creates the risk of stoppage, fines and problems with acceptance.
Planning permission is based on land, planning, design, contractor chosen, quality, safety and financing. An error at an early stage is transferred to the input and registration of the finished object.
08
The contractor is verified by license, qualifications and actual role
The construction contract is concluded in writing and describes the scope, design responsibility, standards, program, price, materials, subcontracting, insurance, HSE, guarantees and handover. The use of someone else's qualification certificate, illegal subcontracting chain or lack of required qualifications may affect validity and liability.
- Employer
- Land, permits, site access, initial data and timely decisions
- Contractor
- Qualification, personnel, method, procurement, quality and safety
- Designer/supervisor
- Scope, approvals, professional liability and independence
- Subcontractors
- Allowed packets, consent, flow-down and direct control
- Security
- Performance bond, advance guarantee, retention and parent guarantee
09
Variation without a procedure turns into a dispute about volume and price
The contract establishes a bill of quantities or lump sum basis, milestones, measurement, invoices, taxes, withholding and final account. Any change undergoes a written instruction, cost and time assessment, confirmation of authority and recording of consequences. For delay, the events of the customer, contractor, authorities and force majeure are separated.
The price is more stable only with a mature scope and clear distribution of design risk.
Requires agreed upon quantities, rates, records and joint measurement procedures.
We need open-book, audit rights, allowable cost and pain/gain formula.
Notice, contemporaneous records, mitigation and deadline preserve the party's position.
10
Acceptance is a process, not just one signature at the end
Control is built through approval of materials, inspections, concealed works records, testing, commissioning, punch list and completion acceptance. The transfer of the object is associated with as-built documents, manuals, warranties, keys, permits and personnel training. Defects liability period does not cancel mandatory quality requirements and liability for hidden defects.
- ITP
- Inspection and test plan with hold points and responsible persons
- Evidence
- Photos, laboratories, site diary, RFI, NCR and corrective action
- Completion
- Work status, documents, systems input and unfinished items
- Warranty
- Deadlines by type of work, response time, access and emergency repair
- Final account
- Closes after agreeing on variations, claims and defects
11
EIA, fire safety and industrial conditions are designed in advance
Based on the level of impact, the project may require an environmental impact report, report form or registration form. Environmental approvals, emissions, waste, water, soil, energy, occupational health, fire and production licenses must correspond to the actual process, and not just the architectural purpose of the building.
Old pollution, permits, monitoring, hazardous materials, underground tanks, regulations and distribution of responsibility for remediation are checked.
12
Construction dispute is won contemporaneous records
The main conflicts concern the validity of the contract, scope, variations, delays, quality, final account and payment priority. The contract defines the law, court or arbitration, language, expert procedure and interim measures, but the party maintains daily program updates, notices, approvals, measurements and causation.
- 01
Confirm land-use right, purpose, term, boundaries and registration history.
- 02
Check foreign clearance, business scope, foreign exchange financing and local regulations.
- 03
Collect land, planning, construction, EIA, fire and completion file.
- 04
Check mortgage, lease, court restrictions, debts and physical condition.
- 05
Model all taxes, fees, price and closing mechanics.
- 06
Record the qualifications of participants, scope, price, changes, security and acceptance.
- 07
Maintain a single contemporaneous project record until the final account.