In order to standardize the approval of qualification of real estate appraisal institutions, and strengthen the supervision on real estate appraisal institutions, on December 7, 2006, the Ministry of Construction issued the Notice on the Relevant Issues Concerning Strengthening the Supervision of Real Estate Appraisal Institutions (Jian Zhu Fang [2006] No. 294, the “Notice”). The main issues of the Notice are as follows:

  1.  According to the Administration Regulations on Real Estate Appraisal Institutions (Jian She Bu Ling No. 142, the “Regulations”) and the Notice of Ministry of Construction on Establishment of the System of Credit Documents of Real Estate Enterprises and Professionals (Jian Zhu Fang Han [2002] No. 192), the credit documents of real estate appraisal institutions and real estate appraisers should be established and updated in a timely manner. 
  2. The approval of qualifications of real estate appraisal institutions and the registration application, initial examination, and approval of real estate appraisers should be conducted through the information system of the approval of qualifications of real estate appraisal institutions and the registration of real estate appraisers.
  3. The initial examination and approval authorities should publish the list of real estate appraisal institutions and their legal representatives and real estate appraisers on the websites thereof. 
  4. The real estate appraisal institutions which apply the extension of original qualifications yet being rejected should apply approval of corresponding ranks during the period from the date of rejection to the expiration of the original qualifications, otherwise, the real estate appraisal institutions should be treated as new established institutions when applying again. The real estate appraisal institutions which do not apply the extension of original qualifications, or whose qualifications are revoked, must not be engaged in real estate appraisal activities and be treated as new established institutions when applying again. 
  5. The real estate appraisal institutions which complete the registration of changed names at industry and commerce authorities should apply the alteration of institution names at the approval authorities. 
  6. In the case that real estate appraisal institutions bankrupt or dissolve, the real estate appraisal reports and relevant materials should be handed over to the local construction (real estate) administration authorities or the institutions designated thereby. 
  7. The construction (real estate) administration authorities should establish inspection systems of real estate reports, identify examination standards, and conduct on-site inspections as well as record the inspection results in the credit documents and publish them to the public. 
  8. The competent authorities should require the real estate appraisal institutions which do not comply with the qualification ranks set forth in the Regulations to conduct rectifications in specific terms and revoke qualifications of real estate appraisal institutions which fail to conduct rectifications. The competent authorities should make sanctions strictly according to the Regulations to the real estate appraisal institutions which conduct prohibited activities set forth in the Regulations. 
  9. The real estate appraisal institutions which conduct appraisal activities out of the administration area where it is registered should file the real estate appraisal reports at the construction (real estate) administration authorities of the local government above county level after finishing the appraisal activities. 
  10. In relation to the real estate mortgage registration, the competent authorities should, according to the Administration Regulations on Urban Real Estate Mortgage (Jian She Bu Ling No. 98), require applicants to provide the written agreement of the mortgage value of the real estate entered by the mortgagor and mortgagee or real estate appraisal reports issued by qualified real estate appraisal institutions. 
  11. The real estate appraisal institutions ranking at the second and third level should not establish branches. All real estate appraisal institutions should not establish a representative office, connection office, or similar institutions.
  12. Real estate administration authorities should cooperate with the industry organizations of real estate appraisal and punish the unfair activities of soliciting business by bribe. 
  13. The industry organizations of real estate appraisal should strengthen self-discipline administration.