Interpretation I of the Supreme People's Court on Several Issues concerning the Application of the Property Law (‘Interpretation I’) has been come into force on March 1 2016
The ‘Property Law’ has been promulgated for nearly 10 years, recently, the Supreme People’s Court released the ‘Interpretation I’, which has further prescribed the issues on the registration of the immovable property, the division of co-owned property, the bona fide acquisition, and etc.. Hereinafter, we would like to introduce the articles about the bona fide acquisition briefly.
2 elements shall be applied on the identification of a bona fide acquisition
The assignee would not get to know that the assignor has no right of authorized disposition
‘Interpretation I’ has listed 5 circumstances on this, for example, there is valid dissidence registration in the register; the assignee knows the subject of rights recorded in the register is wrong, and etc..
The assignee shall be deemed as guilty of gross negligence
For the immovable property, if the assignee knows that the assignor has no right of authorized disposition (the 5 circumstances); or for movable property, if the object, place or timing of the transaction is not in conformity with transaction practice.
The timing on the identification of a bona fide acquisition
The timing shall be the time that the immovable property or movable property is assigned to the assignee, which refers to the time when the transfer of immovable property right is registered or the moveable property is delivered in accordance with the law. If the moveable property is occupied by the third party, the time of delivery shall be the time when the agreement concerning transfer of the right of claim for returning the original objects between the assignor and assignee comes into force.
The burden of proof on the identification of a bona fide acquisition
The true right holders advocate the assignee does not constitute bona fide, they shall bear the burden of proof. But if the movable property has been delivered through registration, then the true right holders’ claim shall not be prevailed.