(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."

One of the reasons that are often cited to justify attempts to redesign residential properties for commercial use is that the practice may help private businesses or individual startups reduce their operational costs and their boom will boost employment and increase residents' income. But people benefiting from the change of property use, often renters or those who lease residential compounds, may ignore the impact their business has on other residents in the same community.

Due to the indifference, deliberate or not, disputes have been ongoing. In settling these disputes, the authorities should first correctly prioritize the two things involved in them: the economic interests of a few property renters and leasers and the legitimate rights and interests of most homeowners concerning their properties, including a peaceful living environment.

The Property Law rules that property owners are not allowed to change self-owned residential properties for commercial use in violation of laws, administrative regulations and management rules. It also stipulates, provided the purpose of a property is altered through legal procedures, its owner should first obtain the consent of interested parties, in addition to complying with laws, administrative regulations and management rules. The only problem is that, before the new judicial interpretation came into effect, the definition of "interested parties" was not explicit in the Property Law.

Wang Lin (Yangcheng Evening News): In a society ruled by law, the personal rights of all citizens are equally protected. In addition, we must be aware of the fact that each right has its limitations, and the property right is no exception. If a property owner uses his (her) home for a restaurant or home-schooling, adjacent neighbors could be more or less influenced, and their voices should be heard.

Every person pursues a peaceful environment and better quality of life, including cleanliness, quiet, safety and comfort. However, altering residential properties for commercial use can easily break the balance of such living conditions.

Zhou Shijun (Daily Sunshine): The new judicial interpretation of the Supreme People's Court on the commercial use of residential properties reveals a confidence from the authorities in the self-governance capabilities of community residents.

Previous experience shows that once residential properties are used for as commercial purposes, disputes among neighbors are unavoidable. If the authorities intervene too much, it adds extra costs to governance. Worse still, corrupt officials may seek benefits by favoring one side. The modern philosophy of governance advocates a smaller role for government agencies in settling civilian disputes, which also helps foster a more self-disciplined society.

Wu Jiang (www.zhnews.net): Compared with costly offices in business buildings, residential properties allow self-employed individuals to spend far less in terms of house rentals, and they are much closer to large volumes of possible customers. This is a big draw for property owners redesigning their own homes for commercial use. It is, however, improper to consider the issue only from a commercial perspective.

Some argue that a veto system is too rigid in deciding the use of private properties, and say it would be better if the "majority rule" is applied. In practice, strong opposition to the commercial use of residential properties, such as opening retail outlets, are usually from close neighbors who are most affected, while most residents in the same building may support the alteration due to consequent conveniences. However, the legitimate rights and interests of the small group should not be sacrificed.

Helps with jobs

Liang Jiangtao (www.qianlong.com): In the face of a tight job market, veto power for each property owner could be too harsh for those unemployed who need to earn a living through small home retail outlets. The new judicial interpretation may block opportunities for self-employed businesses or startups in communities. In addition to administrative requirements for fire emergency, safety and hygiene, and environmental protection, it has become even more difficult to start up a new business in a private home.

The new rule may cut down on disputes in neighborhoods, saving governing costs by simplifying approval procedures. It will, however, dampen the enthusiasm of startup entrepreneurs and the self-employed.

Bi Xiaozhe (www.zhnews.net): For those with plans to start up a small business in their private homes, they need approval from residents in the entire building now. It is extraordinarily difficult, as we can imagine. The new judicial interpretation has in fact banned business operations in residential compounds. But most home retail outlets are very helpful for consumers by saving shopping hours and commuting costs.

Though disputes over commercial use of residential properties were increasing, there were no lawsuits on this issue before the new judicial interpretation was published. This situation may change in the future, adding to the workload of courts.

A Ji (The Beijing News): Some suggest prohibition on changes of property use, but community business, such as opening an art studio, a law firm or SOHO, is a world trend. On one hand, it lowers business costs. On the other hand, the right of how to use private properties belongs to the owner, as long as it does not affect neighbors' ventilation, lighting or passage.

Therefore it is imperative to improve legislation on ways to identify categories and damages of these changes of property use, and revise standards for their entry into communities. This will help increase the operational flexibility of the new judicial interpretation, leading to a more practical way to address the issue.