Research On Administrative Supervision Of Real Estate Presale

The development of Real Estate Presale System in our country has a history ofmore than two decades, which contributes to the property market boom dramatically.We have to admit that the presale system has been playing a positive role inpromoting the development of the property market as it speeds up the constructionfund turnover, improves the capital efficiency and boosts the exploitation capabilities.However, the legal risks caused by the current presale systems have also beingbrought to our attention as well. Because of the time difference between the presaleand delivering of properties, some certain loopholes could be taken advantage of bysome real estate developers. They might conduct false propaganda, extend thescheduled delivery time, change the original planning and engage in several otherirregularities. Such kind of activities will impair the legal rights of consumers. What’sworse, the relevant regulations and laws in China are not flawless so that there are nostandards established for the administrative supervision to conform to. Unsoundlegislation and ineffective supervision lead to the administration failure in real estatepresale. On behalf of the authorities, the government is obligated to protect the properrights of buyers and correct the conduction code of administrators. It plays anirreplaceable role to improve the administrative supervision on presale to ensure thehealthy and orderly development of the real estate industry.This thesis aims at analysing the basic connotation and characteristics of existingreal estate presale administrative supervision regulations and laws. Besides, theshortcomings of the current systems are also discussed. Based on the practical casesof presale disputes, the main problems and causes have also been found out. After that,suggestions and solutions to these problems are proposed as well. There are threeadministrative supervision regulations for real estate presale, namely, pre-licensingsystem, pre-contract registration system, pre-funding of administrative regulatorysystem. They are guideposts for administrative supervision activities of economicsubjects during the procedure of real estate presale. Firstly, pre-licensing system provides a series of rigid rules for the real estatepresale participants to follow. The real estate developers are requested to havequalifications and certificates stating the appropriate rights to develop the specificland. However, the eligibility requirements are not restrict enough, which might leadto undesired extension of real estate presale business. Improving the accessrequirements on presale systems can be carried out by setting up individual fundsaudit mechanism, establishing the integrity rating system to ensure the economicstrength and integrity of real estate developers. Secondly, the most important task ofpre-administrative supervision is the supervision of presale funding. Due to the lackof detailed administrative supervision rules and definition of specific supervisionsubjects for presale funding, it is difficult to regulate in practice, which is a commonproblem for many local governments. Therefore, the top priority is to set up detailedregulations and laws and dedicated regulation organizations for the presale fundingadministration to ensure efficient supervision.Moreover, in addition to the problems existing in the current regulations andlaws gained from the analysis mentioned above, the supervision organizations alsohave the ambiguous roles crossing different departments and decentralizedorganizational structure problems. In order to achieve better supervision effect, acoordination mechanism between various regulatory participants should beestablished. Strict accountability mechanisms and sanctions should also be introduced.Finally, there is no risk-sharing mechanisms in our current real estate presale, whichleads to considerable risks for the vulnerable buyers. Our Government can also createa presale funding risk guarantee system to get consumers, banks and real estatedevelopers together sharing the risks and solving the existing issues in the presaleadministrative regulatory constantly.