SHANGHAI (Dec 22): Real estate developers must begin construction on plots of idle land within three months of receiving a government notice or else lose their right to develop the land, according to revised draft rules published on Wednesday by China's Ministry of Land Resources.

The revised rules, which the ministry published on its website to solicit public comment, are not yet in effect.

If developers fail to start construction within three months of receiving a notice to start construction, the local Ministry of Land Resources will enter negotiations with the developer to determine a way to dispose of the land.

Disposal methods may involve an extension of the deadline to begin construction, according to the rules. However, if the ministry and the developer are not able to reach a disposal agreement after one year, the ministry can rescind the usage rights without compensation, transfer the usage rights to a new user, or assess a fee of up to 20% of the price paid for the land.

The Chinese government has tried to crack down on land hoarding by real estate developers in recent years as part of a broader campaign to address high housing prices.

Real-estate developers are required to submit development plans as a condition of bidding on new land at government auctions. But some developers have accumulated large holdings of undeveloped land in the hope of profiting from rising land prices.

With government still restricting the flow of credit to the real estate sector and house prices now falling month on month in many cities, the new rules could add to the cash flow pressures on real estate developers. — Reuters

SHARE
SPONSORED CONTENT
Platinum Melati Residences—Setapak’s latest gem for family-centric sustainable living with LRT connectivity

Walkable to the LRT and surrounded by urban essentials, this mature address in Setapak brings together the best of city living, placing everyday necessities—schools, malls, hospitals and the like—close at hand.

read more