On July 20, 2020, the Standing Committee of Shenzhen Municipal People's Congress released an announcement on seeking public comments for the Regulations of Shenzhen Special Economic Zone on Urban Renewal (Draft for Comment) (the "Urban Renewal Regulations(Draft)"), which means the Regulations of Shenzhen Special Economic Zone on Urban Renewal (the "Urban Renewal Regulations") which have been in preparation for many years finally enters into the fast track of legislation and promulgation for implementation.

Compared with Urban Renewal Regulations, the Urban Renewal Regulations (Draft) have the following new highlights:

(1)   For the first time, the implementation of urban renewal work is put forward for being oriented by social public interests, among which the emphasis is laid on the strengthening and improvement of supporting public services and infrastructure construction, which are undoubtedly of great benefit to the immigrant city of Shenzhen short of medical and educational resources. Meanwhile, it puts forward the requirements for greening and strengthening the protection of historical features in the urban renewal work, which is also a measure conforming to the requirement for the sustainable development of a city.

(2)   The Urban Renewal Regulations (Draft), by reference to the advance notice registration system of the Real Right Law, stipulate that advance notice registration may be made for real property when relevant relocation compensation and resettlement agreements have been signed, which is a highlight and innovation of the Urban Renewal Regulations (Draft). With respect to market players, the advance notice registration mode shall be regarded as a favorable policy, which can effectively avoid the circumstance such as "selling same properties twice" and arbitrary breach of contract by property owners. However, the effective implementation of such policies need to rely on the introduction of specific implementing rules by follow-up real estate registration departments, and refine the qualification conditions and procedures for handling advance notice registration. Meanwhile, as advance notice registration is not a mandatory step during the implementation of urban renewal, how to urge right holders to waive part of its rights and interests in real estate and make advance notice registration in order to achieve its policy effects still needs to be further tested in the market.

(3)   The "individual expropriation" mode created by the Urban Renewal Regulations (Draft) is the key highlight of this legislation. That is, the government may expropriate and compensate the houses of a few owners who fail to sign the agreement, and after the houses are expropriated under the name of the government, the government may acting as the right holder sign a compensation plan with market players. From the perspective of market players, this model is helpful to solve the problem of "nail households" in urban renewal, but the provision itself faces many challenges.

As the Urban Renewal Regulations(Draft) are still at the stage of solicitation for opinions, and conclusions have not yet been reached on many issues, if you are interested in the relevant legal analysis of the Urban Renewal Regulations(Draft), please let us know and we will send you the "Real-time Interpretation of Key Clauses of the Regulations of Shenzhen Special Economic Zone on Urban Renewal (Draft for Comment)" published on our official WeChat account.