(ECNS) -- Shanghai will halt approvals for housing projects of apartment-offices, according to a new rule issued Wednesday.
Units already sold but not yet delivered to the buyer must be renovated according to the required functions of commercial offices. Otherwise, they are forbidden to be delivered or must go through registration procedures.
Buyers are encouraged to safeguard their rights and interests if they feel they were misled by the developer while making purchases.
Developers can continue to sell the remaining units of a project that meets all requirements after making improvements, but are also encouraged to rent the units out instead of selling them.
Units already delivered and in use will be put under strict management and control, and relevant information will be logged into a registration system. The developer and the owner are required to take joint responsibility for making improvements and ensuring safety and security. Developers are also urged to eliminate potential fire hazards.
Owners of dual-purpose properties will not receive the same treatment as residential housing owners in terms of residence registration, children's education, and public utility fees.
Illegal structures built by developers will be marked on registration records and subject to trading restrictions.
On April 21, Shanghai issued a rule banning developers from building apartment-offices on plots approved for office use, or service apartments on commercial plots without having gained prior approval. The latest rule will help further eliminate the grey area of "quasi-residential housing" projects.
So far, Beijing, Shanghai, Guangzhou, Chengdu and Shenzhen have all issued policies controlling commercial office projects.
Zhang Dawei, the chief analyst at Centaline Property Agency, expected the commercial office market to see a surge in disputes and refunds following the new rule.
Yan Yue, a researcher with the E-House China R&D Institute, said the rule will deal a blow to the second-hand market as well. He also predicted a sharp drop in sales for brokers and even some developers.