Family ordered to pay off 54-year lease for parking spot

Putuo District People's Court has ruled that a homeowner's family has to pay off a 54-year, 150,000-yuan ($24,712) lease for a parking spot in their residential compound, the court said Monday.

The plaintiff, the real estate developer that built the compound, sued the homeowner, surnamed Wang, earlier this year after he refused to pay the 50,000 yuan he owed on the lease, according to a court press release.

Wang and the developer, which was not identified, signed a contract in January that gave the homeowner access to the parking spot for the next 54 years in exchange for a lump sum payment of 150,000 yuan, the court said. Wang paid the developer 100,000 yuan when he signed the contract and promised to pay the rest in February.

However, Wang reconsidered the deal after a friend told him that Chinese law caps the term for a property lease at 20 years. Wang asked to shorten the term of the lease to 20 years, but the plaintiff refused, insisting that the contract was valid.

The plaintiff offered to cancel the contract, which would have forced Wang to forfeit the parking spot, but he insisted on renegotiating the contract on the grounds it violated the law.

Although Chinese law stipulates that property lease terms can't exceed 20 years, the disputed contract contained a clause that preemptively renewed the lease for 20 years, and then another 14 years, at the time it is signed.

In its ruling, the court determined that the clause was valid.

Wang, who was in his 70s, died while the lawsuit was still pending. The court ordered his wife and daughter to pay off the remainder of the lease.

The law sets the limit on leases to protect the interests of the parties because prices and ownership can change greatly over the long term, said a lawyer surnamed Wang with Lixiaohua Law Firm.

Wang said that the law does not prohibit a contract from containing a clause that automatically renews the agreement.