The latest rural land policy is here, farmers and friends should read it quickly
"What the Township Says" agricultural news:
Recently, as an important measure to earnestly implement the pilot work of advancing the reform of market entry for rural collective for-profit construction land, as set out by the Party Central Committee and the State Council, the China Banking Regulatory Commission and the Ministry of Land and Resources jointly issued the "Interim Measures for the Administration of Mortgage Loans on the Right to Use Rural Collective For-Profit Construction Land," clarifying that in 15 pilot cities (counties), mortgage loans may be granted on the right to use rural collective for-profit construction land that meets the requirements of planning, use control, and lawful acquisition, and that has entered the market by means of transfer, lease, or capital contribution at appraised value (as shares), as well as on the right to use rural collective for-profit construction land that meets the conditions for market entry.
Simply put: rural land can now be used for loans! And for the fixed assets that have long lain dormant in rural areas, they can finally be turned into "liquid money." In fact, over the past few days, "Native Shenzhou Life" has been paying close attention to the issue of rural land use. The problem reported by many farming friends is that the money from selling agricultural products at present is not even enough to cover the fuel cost on the road, so how to use land reasonably has already become a huge problem facing farmers and friends. Now, the introduction of this policy is undoubtedly good news.
The policy has just been introduced and is currently being piloted nationwide. It is believed that it will later be rolled out across the whole country.
So which areas can carry out the pilot?
The "Measures" clearly define the applicable areas, applicable land categories, and validity period.
Regarding the applicable areas, the "Measures" clearly allow mortgage loans to be granted on rural collective for-profit construction land only in the 15 pilot counties (cities, districts) for market entry reform determined by the state, including Daxing District in Beijing, Zezhou County in Jincheng City, Shanxi Province, and Haicheng City in Anshan City, Liaoning Province, among others.
Regarding the applicable land categories, the "Measures" clearly state that rural collective for-profit construction land refers to land within existing rural collective construction land whose use is determined by the overall land use plan and urban-rural planning to be for for-profit purposes such as industrial and mining storage, commercial services, and so on. It stipulates that mortgage loans may be granted on the right to use rural collective for-profit construction land that has entered the market by means of transfer, lease, or capital contribution at appraised value (as shares), as well as on the right to use rural collective for-profit construction land that meets the conditions for market entry.
Regarding the validity period, the "Measures" stipulate that the period of validity lasts until December 31, 2017, consistent with the time limit of the pilot for market entry of rural collective for-profit construction land.
The "Measures" propose that the work of granting mortgage loans on the right to use rural collective for-profit construction land should be carried out on the premise of adhering to the unchanged nature of public ownership of land, not breaching the red line of cultivated land, and not harming the interests of farmers. At the same time, it requires that mortgage loans on the right to use rural collective for-profit construction land should adhere to the principles of lawfulness and compliance, benefiting farmers and the people, equality and voluntariness, fairness and good faith, controllable risks, and commercial sustainability.
Which land use rights can be mortgaged for loans?
The "Measures" set out clear provisions on carrying out the business of mortgage loans on the right to use rural collective for-profit construction land from aspects including the scope of business development, the use of loans, conditions, procedures, and risk protection mechanisms.
Regarding the scope of collateral, the "Measures" allow mortgage financing on two types of rural collective for-profit construction land use rights for which the right of disposal exists. First, the right to use collective for-profit construction land acquired by means of transfer, lease, or capital contribution at appraised value (as shares); second, the right to use rural collective for-profit construction land that has not yet entered the market but meets the conditions for market entry.
Those meeting the conditions for market entry include two types: one is the situation where the land has not yet entered the market but has already been registered as real estate in accordance with the law and holds a title certificate, meets the requirements of planning, environmental protection, and so on, has the basic conditions for development and utilization, the ownership entity has performed the collective land asset decision-making procedures and agreed to the mortgage, and the pilot county (city, district) government agrees that the land may enter the market when the mortgage right is realized; the other is the situation where rural collective for-profit construction land that has not yet entered the market but was lawfully used before the reform undergoes real estate registration in accordance with the law and holds a title certificate, goes through market entry procedures in accordance with relevant provisions, signs a land use contract, and completes change registration procedures.
The "Measures" also stipulate that the following collective for-profit construction land use rights may not be mortgaged: those with unclear ownership or existing disputes; those sealed by judicial organs in accordance with the law; those lawfully included in the scope of demolition and land expropriation; those whose use has been changed without authorization; and other circumstances in which mortgage may not be processed.
If default occurs, how is the collateral disposed of?
Strictly controlling loan conditions is a necessary means to control loan risks and smoothly promote the business of mortgage loans on collective for-profit construction land use rights in pilot areas. The "Measures" put forward requirements in aspects such as lawfully holding a land use right certificate, conforming to the overall land plan and urban-rural planning, and not having other encumbrances established with priority compensation, and require banking financial institutions, during due diligence, to conduct detailed investigations into issues such as whether the borrower is qualified, whether the ownership of the collateral is clear, whether the value assessment is reasonable, whether it conforms to planning, and whether it is easy to dispose of and realize cash, striving to prevent loan risks and improve asset quality.
How is the value of the collateral assessed? The "Measures" stipulate that banking financial institutions should establish a value assessment system for the right to use rural collective for-profit construction land. External assessment or internal assessment methods may be used to assess the value of the right to use rural collective for-profit construction land used for mortgage. At the same time, it stipulates that banking financial institutions should, in accordance with the provisions of the mortgage contract, strengthen the dynamic management and value re-assessment of collateral, ensuring that the mortgage rights are authentic, lawful, sufficient in value, and valid.
If there is loan default, how is the collateral disposed of? The "Measures" stipulate that after the loan matures, if the borrower fails to repay the debt or circumstances agreed upon by the parties for realizing the mortgage right occur, banking financial institutions may dispose of the mortgaged right to use rural collective for-profit construction land through lawful channels such as discounting, auction, or sale of the mortgaged property. The proceeds obtained shall be preferentially compensated to the banking financial institution.
In addition, the "Measures" also establish a guarantee mechanism system for mortgage loans on collective for-profit construction land use rights from aspects such as guarantees by government financing guarantee companies and risk compensation mechanisms, which is conducive to sharing the risks of banking financial institutions and promoting the development of the pilot work on mortgage loans on collective for-profit construction land use rights.
Basically, the policy introduced this time takes bringing farmers more conditions for increasing income and adjusting the land use structure as strategic points to carry out further rural land reform. After seeing this news, it is hoped that more farmers and friends can act quickly, carefully read the content of this article, and start taking action.
This article is originally published by "Native Shenzhou Life"; reproduction requires the consent of the author.
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