(LI SHIGONG)

While recent judicial interpretations released by the Supreme People's Court, China's top judicial organ, have addressed some ambiguities in the country's two-year-old Property Law, they may give rise to new disputes, legal experts say. For example, one of the two interpretations, published on May 24, clarifies conditions on the controversial practice of redesigning residential properties for commercial use. It is considered a legal basis for settling neighborhood disputes over this issue.

Every homeowner has first refusal for the commercial use of residential properties in their buildings, according to the judicial interpretation. That is to say, if one person wants to redesign his (her) home for commercial purposes, he (she) must obtain consent from all other residents in the same building who are defined as interested parties. Previously there were no explicit regulations in this regard. The new rule that will take effect this October entitles homeowners with veto power in their hands to decide how or to what extent their neighbors can alter the use of their properties.

China's Property Law, which has only been in place for a couple of years, is not clear in defining who are interested parties. Once disputes emerged in the neighborhood, involved residents would have to first prove the existence of a causal connection between the damage or losses they are suffering and the irregular behavior of their neighbors, which virtually multiplies difficulties and costs in attaining legal evidence as a result.

The problem of using residential properties for commercial purposes is a common one in Chinese communities. Self-employed individuals often change part of or all their homes into sales outlets or other business spaces to make ends meet. However, it is controversial enough to change the original legalized use of properties.

Most legal experts agree that the new judicial interpretation, based on studies of many previous cases facing courts at the grassroots level, is practically applicable. They say that the introduction of the veto system in settling neighborhood disputes will prove effective to maximally protect homeowners' legal rights concerning their properties.

People calling for relaxed controls on attempts to redesign residential properties for commercial use argue that flexible policies in this regard will encourage more people to start up their own business, which will both increase job opportunities and contribute to state revenues.

Chinese lawmakers, attempting to better provide equal protection for both state and private properties, enacted the Property Law and released the draft in 2005, which was officially adopted by the National People's Congress two years later.

Public interests first

Wang Renhui (Luzhong Morning Post): Before the formulation of the Property Law, changing the legalized use of residential properties resulted in a growing number of disputes. Even if the new law has been in place for a while, a lack of detailed rules for its implementation leaves courts helpless to settle such disputes. The new judicial interpretation holds a negative stance toward the commercial use of residential properties by empowering every interested party with the right of veto in the form of a community "referendum."