On December 22, the Beijing Housing and Urban-Rural Development Commission issued the "Beijing Municipal Measures for the Supervision and Administration of Commercial Housing Pre-sale Funds (2023 Revised Edition)" (hereinafter referred to as the "Measures") and publicly solicited opinions.
Compared with the current measures for the supervision and administration of pre-sale funds, the "Measures" have made important adjustments in many aspects such as the supervision of the main body and strict withdrawal management, especially the adjustment of the regulatory body of commercial housing pre-sale funds from commercial banks to the government, which has attracted market attention.
"Due to the implementation of the off-plan housing system for new houses in China, if the developer has a capital flow problem in the later stage, it will affect the timely delivery of the house. The supervision of pre-sale funds plays a decisive role in the delivery of houses. Wang Xiaochang, chief analyst of Zhuge Data Research Center, said in an interview with the Financial Times that the main body of supervision of commercial housing pre-sale funds will be adjusted from commercial banks to the government, which can effectively prevent the misappropriation of pre-sale funds by real estate enterprises in violation of regulations, supervise and standardize the use of housing funds for project construction, reduce delayed delivery and even unfinished problems, and better safeguard the legitimate rights and interests of home buyers.
The regulatory body has been adjusted from commercial banks to the government
The pre-sale funds of commercial housing refer to all the house price paid by the buyers for the purchase of the house at the time of the pre-sale of the commercial house, including deposits, down payments, housing loans, installment purchase payments and other forms of purchase money.
The "Measures" make it clear that the main body of supervision of commercial housing pre-sale funds will be adjusted from commercial banks to the government, and the regulatory principles will be adjusted from "government guidance, bank supervision, multi-party supervision, and special funds" to "government supervision, social supervision, special account collection and deposit, special funds, approved expenditures, and accountability for violations".
In view of the division of labor and the performance of duties, the "Measures" pointed out that the Beijing Municipal Commission of Housing and Urban-Rural Development is responsible for guiding and coordinating all districts and departments to carry out the supervision of pre-sale funds.
The Beijing Housing Fund Management Center is responsible for the management of the supervision account of commercial housing pre-sale funds (hereinafter referred to as the "supervision account"), which mainly includes the opening of the supervision account, system construction and operation and maintenance, accounting collection and identification, preliminary examination and payment of funds, and statistical analysis of funds.
The competent departments of housing and urban-rural construction in all districts of Beijing (including housing management departments, the same below) are responsible for guiding, supervising and inspecting the specific implementation of the supervision of pre-sale funds for commercial housing within their respective administrative areas, and undertaking the review of the use of pre-sale funds.
The Beijing Branch of the People's Bank of China is responsible for guiding the undertaking bank to handle the opening, alteration and cancellation of the special depository account (supervision account) for pre-sale funds.
The Beijing Supervision Bureau of the State Administration of Financial Supervision is responsible for supervising and inspecting the operational risks and compliance of the supervision of pre-sale funds of the undertaking banks.
The Beijing Municipal High People's Court is responsible for supervising and guiding the city's intermediate people's courts, basic level people's courts, and special courts to standardize the people's courts' preservation and enforcement acts, and ensure that the funds for the pre-sale of commercial housing are used for project construction.
Chen Wenjing, director of market research at the China Index Research Institute, told the Financial Times that the Measures have strengthened the regulatory responsibility of the local housing and construction department for pre-sale funds, and clarified the review responsibilities of the local housing and construction department for the use of pre-sale funds. At the same time, the Beijing Housing Fund Management Center has been introduced as a specific supervision business undertaking department, giving full play to its independence and professional advantages in fund management, strengthening the implementation and supervision of commercial banks, and ensuring that the new requirements for the supervision of pre-sale funds are in place.
Set up nodes for the use of pre-sale funds in four links
The "Measures" point out that when the developer applies for the pre-sale license of commercial housing, it should clarify the pre-sale fund supervision plan in the pre-sale plan, and the pre-sale fund supervision plan should include: the key supervision quota of the project, the project use plan, the name and account number of the supervision account, the pre-sale fund supervision agreement, and other circumstances that need to be explained. After the developer obtains the pre-sale permit of the commercial house, it shall publicize the pre-sale fund supervision plan in a conspicuous position in the sales venue.
In the work of determining the supervision quota, the "Measures" innovatively adopt the construction general contractor according to the project cost to put forward the key supervision quota and the amount of funds used at each node, which shall be approved by the district housing and urban-rural construction department in charge of comprehensive project delivery and use conditions and the risk situation of the development enterprise. Better guarantee the key supervision quota funds, which can cover the construction and installation costs of the project and prevent the risk of project funds.
According to the "Measures", the project fund plan is set up in four links: the completion of the underground structure, the completion of the main structure, the completion of the acceptance and filing, and the completion of the first registration. The development enterprise should reasonably determine the amount of funds used by each node based on its own capital situation and financing capacity. Before the completion of the first registration of a non-residential project, the funds in the special supervision account shall not be less than 5% of the key supervision quota, and 6 months before the completion of the first registration and actual delivery of the residential project, the funds in the special supervision account shall not be less than 5% of the key supervision quota.
Buyers can inquire about the balance of funds within the key supervision quota of the project
The "Measures" make it clear that all the pre-sale funds paid by the buyers, such as deposits, down payments, mortgage loans, installment purchase funds and other forms of purchase money, shall be directly deposited into the supervision account, and shall be identified by the capital center according to the development enterprise, pre-sale certificate project, building, house number, buyer, type of funds, amount, etc. After the pre-sale funds enter the supervision account, they should first be used to collect the funds of the key supervision quota. Buyers can check their account information and the balance of funds within the key supervision quota of the project through the website of the Beijing Housing Fund Management Center.
The Measures point out that when the funds within the key supervision quota fail to cover the follow-up construction costs, the development enterprise shall not use the funds within the key supervision quota to pay for the construction costs;
In addition, if there is any of the following circumstances, the Beijing Municipal and District Housing and Urban-Rural Development Departments may suspend the development enterprises from withdrawing funds from the special supervision account, urge the development enterprises to make corrections as soon as possible, and supervise and supervise the use of funds in the special account in conjunction with the capital center: the quality accident occurs in the pre-sale project, the pre-sale project is not delivered on time or there is a risk that it cannot be delivered on time, the development enterprise has serious violations of laws and regulations, affecting the construction of the project or there is a business risk, and other circumstances that the municipal and district housing and urban-rural construction departments deem.
Chen Wenjing said that the "Measures" require buyers to deposit the purchase money paid into the supervision account of the project pre-sale funds publicized by the Municipal Housing and Urban-Rural Development Commission and the Capital Center portal, and check and compare the supervision account information in a timely manner to ensure that all the individual purchase money is deposited into the supervision account. These measures will help prevent project risks and stabilize home buyers' expectations, which may play a positive role in boosting market confidence, and more cities are expected to follow suit in the future.
Source: Financial Times Client Reporter: Xu Beibei Editor: Duan Jiaxi Email: [email protected]