What should I do with the billions of yuan of special funds for affordable housing in my account?, Housing after bankruptcy of real estate developers | special funds | accounts
What should be done with the 170 million special funds stored in a special account after the real estate developer who undertakes the construction of affordable housing projects goes bankrupt? Today, the reporter learned about such a case from the Shanghai Railway Transport Court.
On June 11, 2012, Changsha Urban Construction and Development Company fully established Mingding Real Estate Development Co., Ltd. to carry out the construction of a certain E2 and E3 affordable housing project. On October 31, 2012, the Housing Security and Housing Management Bureau of Baoshan District, Shanghai, Changsha Urban Construction and Development Company, Mingding Real Estate Development Co., Ltd., and Shanghai Housing Construction and Development Center signed an agreement, stipulating that the difference between the project sales price and the construction price, after deducting the relevant taxes and fees that should be paid, will be included in the financial special account management for overall use. Later, Mingding Real Estate Development Co., Ltd., the Municipal Housing Security Center, and the Agricultural Bank of China Baoshan Branch signed a fund supervision agreement.
On July 5, 2019, the Shanghai Municipal Office for Promoting the Construction of Large Residential Communities issued a notice to Changsha Urban Construction and Development Company and Mingding Real Estate Development Co., Ltd., requiring Changsha Urban Construction and Development Company and Mingding Real Estate Development Co., Ltd. to transfer the sales difference funds of more than 137 million yuan for the sold shared property rights guaranteed housing on the E2 plot and more than 101 million yuan for the sold shared property rights guaranteed housing on the E3 plot to the residential development center before July 20, 2019, and uniformly include them in the financial special account management.
At this time, Mingding Real Estate Development Co., Ltd. has applied for bankruptcy liquidation to the Shanghai Railway Court. The Shanghai Housing Security Affairs Center and the Shanghai Housing Construction Development Center subsequently proposed to the manager of Mingding Real Estate Development Co., Ltd. to retrieve the special funds for affordable housing. But the administrator disagrees with the two plaintiffs' requests for retrieval, citing that the funds requested by the plaintiffs belong to the defendant's property. Therefore, the two plaintiffs filed a lawsuit against the Supreme People's Court, demanding the retrieval of over 170 million yuan in special funds for housing security and housing.
This case is the first bankruptcy derivative case in China involving the retrieval of special funds for shared property rights protection housing. The relevant person in charge of the Shanghai Railway Court explained that the currency principle applies the "possession is all" rule and usually cannot be used as the exercise object of the bankruptcy recovery right. This rule only applies to specific currencies that are separated from all others. The key to determining whether the special funds for guaranteed housing, which are kept in the bank account under the name of the bankrupt enterprise, can be retrieved during the bankruptcy proceedings, is whether the funds have been specified. The specialization of monetary property should meet the following two requirements: firstly, the parties have a clear agreement or, depending on the nature of the transaction, the ownership of currency does not transfer with the transfer of possession; The second is to have independent accounts or other custody methods to make monetary assets identifiable and sufficient to ensure that they are not confused with the property of the possessor.
After the trial by the Shanghai Railway Court, it was found that the plaintiff claimed to exercise the right of retrieval against the special funds for ensuring housing. After the special funds for ensuring housing are included in the financial special account management, they will be used in a coordinated manner for the government's purchase of shared property rights guaranteed housing, government priority purchase and repurchase of shared property rights guaranteed housing, as well as the construction of affordable housing and related supporting facilities. The purpose is to solve the livelihood problems of low-income groups facing housing difficulties, and it has social and public interest attributes. Mingding Real Estate Development Co., Ltd. is aware that the special funds for ensuring housing should belong to the government, and the sales difference funds are only temporarily stored in its regulatory account, with no change in ownership due to its possession. The difference in funds from the sale of the special funds for guaranteed housing involved in the case has been specified in the regulatory account of Mingding Real Estate Development Co., Ltd. After fund supervision, it belongs to the exception of the principle of currency possession and ownership, that is, the special funds for guaranteed housing involved in the case are separated from ownership. The plaintiff, Shanghai Housing Construction Center, as a government authorized functional entity, has the right to claim the recovery of special funds for affordable housing from the administrator of Mingding Real Estate Development Co., Ltd. in bankruptcy proceedings.
Therefore, after a re audit, the Shanghai Railway Court made a judgment ordering Mingding Real Estate Development Co., Ltd. to return more than 149 million yuan in special funds for jointly owned property protection housing, while rejecting the plaintiff's other litigation requests. After the first instance judgment, neither party filed an appeal and the judgment has taken effect.