Perspective | Shared Area: A Debate on Retention or Abandonment? - A Lawyer's In-Depth Analysis of the Changes in China's Real Estate Market and Legal Risks
Published:
2025-01-17
With the further impact of economic development on the real estate industry, there have been reports from various regions about the "cancellation of shared areas". This article combines China's current laws and regulations with practical operations to elaborate on the development history, current status, and future expectations of the "shared area" system in commercial housing in China. It also highlights potential legal risks and provides suggestions for response, aiming to benefit relevant participants in the real estate industry (developers, home buyers, and other stakeholders).
With the further impact of economic development on the real estate industry, there have been reports in multiple regions about "cancelling shared area". This article combines China's current laws and regulations with practical operations to elaborate on the development history, current status, and future expectations of the "shared area" system in commercial housing, and to highlight potential legal risks and response suggestions, aiming to benefit relevant participants in the real estate industry (developers, home buyers, and other stakeholders).
I. Background and Development History of the "Shared Area" System
1. Concept and Origin
Shared area refers to the practice in commercial housing sales where, in addition to the "usable area" actually used by the buyer, a certain proportion of the public building area in the building or community also needs to be shared.
The shared area is not unique to China. In the early years, China borrowed the "shared pricing" model from Hong Kong, Macau, and some Western countries to uniformly measure the owners' sharing of costs for public areas, public facilities, etc. As the commercial housing system gradually matured and the real estate industry developed rapidly in China, this system has been widely promoted and applied.
2. Gradual Establishment of Legal and Regulatory Framework
The "Urban Real Estate Management Law of the People's Republic of China" (hereinafter referred to as the "Urban Real Estate Management Law") is the basic law in China's real estate field, which involves shared area from the perspectives of land use rights transfer, commercial housing development, and sales, but does not explicitly stipulate the calculation and sharing principles of shared area.
Department regulations such as the "Regulations on the Management of Commercial Housing Sales" (Ministry of Construction Order No. 88) mention some concepts related to "shared area", clarifying that developers should truthfully provide relevant information to home buyers, including shared area, to ensure the accuracy and legality of sales and registration areas.
Local housing and urban-rural development departments have made varying degrees of detailed requirements for the calculation and disclosure of shared areas based on national standards (such as the "Real Estate Measurement Specification" and "Building Area Calculation Specification") and local implementation rules. Due to differences in economic and social environments, housing price levels, and market demand in different regions, the execution details of the "shared area" system also vary.
3. Recent Reform Trends
As China's housing market matures, consumers' demands for transparency, fairness, and reasonableness are increasing, and disputes over whether "shared area" can be included in the total purchase price and what proportion is reasonable are becoming more prominent.
In recent years, there have been calls and pilot projects in some regions proposing to "cancel shared area" and "price houses based on usable area". In some local commercial housing pre-sale plans, there has been exploration to use "usable building area" as the core pricing basis in the "Commercial Housing Sale Contract", with the public shared area being disclosed relatively transparently.
However, overall, China has not yet fully unified mandatory regulations for "usable area pricing". Most regions still adhere to the traditional sales method of "building area (including shared area) pricing", but have proposed stricter regulatory requirements for the calculation and disclosure of shared area ratios.
II. Main Issues Under the Current "Shared Area" Model
1. Lack of Transparency in Shared Area Calculation
The calculation of shared area involves multiple technical and management links in the actual measurement process, such as the inclusion range, measurement methods, and ownership division of stairwells, pipe shafts, public lobbies, equipment floors, public corridors, elevator shafts, etc., which are complex, and home buyers generally lack the ability to calculate independently, making it difficult to accurately verify the shared area data provided by developers.
Some developers or surveying institutions lack detailed disclosure regarding shared area ratios and measurement data, and there are even instances of exaggerating shared areas, leading to a significant reduction in the "actual area obtained by home buyers", resulting in disputes and complaints.
2. Lack of Unified and Mandatory Legal Norms
Currently, the calculation of shared area mainly relies on technical standards such as the "Real Estate Measurement Specification" and "Building Area Calculation Specification", but these standards are mostly industry or local standards, with relatively low legal hierarchy, and the enforcement and penalties are not sufficiently comprehensive.
There is still a lack of a unified and operable legal system nationwide regarding which parts of the shared area "must be included" or "must not be included" and the dispute resolution mechanism in case of disputes.
3. Insufficient Protection of Consumer Rights
Due to the complex structure of commercial housing transactions and significant information asymmetry, home buyers find it difficult to timely and comprehensively understand the calculation methods of shared area, specific cost sharing, and other matters when signing contracts.
In the event of disputes or controversies, consumers often face difficulties in providing evidence, and the cost of safeguarding their rights is relatively high. For developers, the administrative penalties or breach of contract liabilities they may face are still insufficient in some regions.
III. Future Policy Expectations Regarding "Shared Area"
1. The "Shared Area" Model Will Continue to Exist in the Short Term
In existing stock housing and most new commercial housing projects in cities, shared area remains the mainstream practice. It is unrealistic to completely "cancel shared area" through legislation or administrative orders in the short term.
In addition, how to include large public facilities (such as clubhouses, underground garages, etc.) in the shared area involves multiple interests and is also difficult to resolve quickly under a one-size-fits-all policy.
2. Strengthening Information Disclosure and Consumer Protection Becomes a Trend
The Ministry of Housing and Urban-Rural Development and other regulatory departments have issued multiple documents requiring the strengthening of information transparency in the real estate sales process, such as clarifying the calculation basis for shared area, sharing locations, measurement reports, etc., and disclosing them in detail in purchase contracts and promotional materials.
As local governments continue to strengthen their control over the real estate market and consumers' awareness of rights protection increases, provinces and cities will further strengthen regulation in areas such as shared area data disclosure and handling of developers' violations, forcing shared area to become more reasonable, open, and transparent.
3. "Usable Area Pricing" May Gradually Expand Pilot Projects
Although there is currently no national, mandatory legislation or regulation, some cities or projects have begun to adopt the method of "pricing based on usable area" for pre-sales and promotions.
If the pilot projects yield good results, it is also possible to promote them in future legal or departmental regulations. Driven by both market competition and policy encouragement, developers may also actively shift to "usable area pricing" to gain market advantages.
IV. Possible Legal Risks and Lawyer Suggestions
(1) For Developers
1. Legal Risks of Non-compliance in Shared Area Measurement and Disclosure
If developers do not professionally calculate the shared area according to regulations or local standards, or deliberately exaggerate the shared area in sales and promotions, it may constitute false advertising, fraud, or breach of contract.
Recommendation: Strictly comply with laws and regulations such as the "Regulations on the Sale of Commercial Housing" and technical standards, entrust qualified surveying institutions to calculate the shared area, and retain complete surveying reports and basis.
In the commercial housing sales contract, promotional materials, and sales announcements, the composition and proportion of the shared area should be clearly listed, ensuring accuracy and consistency. If there are significant changes or adjustments, they should be promptly communicated and confirmed by the owners.
2. Contract breach risks due to lack of transparency in information leading to consumer disputes.
If the purchase contract does not clearly stipulate the composition and ownership of the shared area, or if there are inappropriate format clauses, disputes may arise after signing.
Recommendation: When drafting the "Commercial Housing Sale Contract" or supplementary agreements, clearly stipulate the ownership, usage methods, shared ratio, calculation methods, and tolerances for the shared area.
Try to use standardized templates developed by housing construction departments, market supervision departments, etc., to enhance the standardization of contracts.
3. Adaptation risks brought by future policy adjustments.
Once the "calculation based on usable area" is gradually promoted in some regions, developers who do not timely adjust their sales strategies or contract texts may face policy shocks and market public opinion pressure.
Recommendation: Pay attention to local legislation, regulations, documents from housing management departments, and industry dynamics, and prepare in advance for the calculation and contract templates of the "usable area pricing" model.
Develop corresponding adjustment plans, leaving room for possible policy updates in marketing strategies, sales information disclosure, and contract terms.
(2) For home buyers.
1. Lack of transparency in shared area leads to damage to the "actual usable area rate."
If home buyers do not fully understand the calculation and composition of the shared area at the time of signing, they may face a significant gap between the "actual usable area" and their psychological expectations.
Recommendation: Try to understand and review the official housing surveying report and the shared area data provided by the developer, paying attention to the allocation ratios of key areas such as elevator shafts, stairwells, and public corridors; carefully compare sales promotions with contract terms before signing, raise objections to discrepancies, or confirm them in supplementary agreements to reduce potential disputes.
2. Unclear contract terms lead to difficulties in subsequent rights protection.
If the usage rights and daily maintenance costs of the shared area are not clearly stipulated, it may lead to disputes over property management and maintenance fund collection in the future.
Recommendation: In the purchase contract and supplementary agreements, try to specify the ownership, usage, and cost-bearing of public areas to avoid subsequent property management disputes; if it is later found that the developer or property service company illegally charges fees or occupies public areas, rights should be asserted promptly through negotiation, administrative complaints, or judicial means, and evidence should be preserved.
3. Pay attention to the impact of future policy changes on personal home buying costs and rights protection paths.
If "usable area pricing" is gradually promoted, it may affect thetax calculation, secondary housing transactions, bank mortgage loan amounts, and other aspects for home buyers.
Recommendation: Pay attention to the latest regulations from local housing construction departments, market supervision departments, etc., regarding shared areas or usable area pricing; when purchasing new properties, prioritize developers or projects with relatively transparent pricing models and more complete information disclosure, and make estimates regarding the potential cost differences between "usable area" and "shared area."
5. Summary
The "shared area," as a product of the development of China's real estate industry, has its rationality: sharing the costs of using public resources and facilities, but it is also controversial due to lack of transparency, regulatory deficiencies, and low levels of legal norms. In the short term, the "shared" system will continue to exist, but as home buyers' awareness of rights protection increases and regulatory authorities demand greater transparency in housing sales, the calculation and disclosure of "shared area" will become more rigorous and public.
In the future, in some regions or specific projects, there will be a trend of expanding "usable area pricing," and both developers and home buyers need to pay timely attention to policy dynamics and regulatory requirements.
For developers, they should ensure that the calculation of shared data and information disclosure is compliant, reasonably avoid legal risks, and actively respond to possible market and policy shifts;
For home buyers, they need to enhance their legal awareness, conduct thorough information research before signing, implement detailed contract terms during signing, and promptly use legal means to protect their rights in case of disputes after signing.
At the legal level, it is expected that relevant departments will take action from multiple aspects such as legislation, administrative regulations, and judicial interpretations to further refine and improve the calculation and management system for shared areas in commercial housing. At the same time, at the market level, the introduction of the new "usable area pricing" model should also be accompanied by sound supporting policies and transitional arrangements to better protect the legitimate rights and interests of all parties in the transaction. Through these joint efforts, China's real estate industry will develop towards a healthier, more transparent, and fairer direction.
Key words:
Related News
Zhongcheng Qingtai Jinan Region
Address: Floor 55-57, Jinan China Resources Center, 11111 Jingshi Road, Lixia District, Jinan City, Shandong Province
