Written Confirmation of a Zero Share

When two people buy a property together, the register often shows them as co-owners, but a later written agreement may tell a different story. In a case decided by the Daya Bay Economic and Technological Development Zone People's Court in Huizhou, Guangdong, the parties bought an apartment as co-owners and signed a property co-ownership agreement allocating 80% and 20% shares. The party with the smaller nominal share later confirmed in writing, twice, that she had never contributed any money and that her actual share was zero. When the relationship ended, she changed her position and claimed 20% of the property. The court upheld the written confirmations and ordered her to cooperate in transferring title, with all transfer costs borne by her under the parties' own agreement.

This dispute is a textbook example of how Chinese law separates the property register from the internal contract between co-investors. This article explains the relevant Civil Code rules, the evidential value of written admissions, and the practical lessons for partners in joint property arrangements.

Key Words:Partnership and Joint Ventures, Business and Contract, Contract Drafting and Review

Property Registration and the Internal Agreement#

The starting point of Chinese property law is that registration is the basis of ownership against third parties. The Civil Code of the People's Republic of China (2021), Article 209, provides that the creation, alteration, transfer, and extinction of real rights in immovable property take effect upon registration, unless otherwise provided by law. In the Huizhou case, the apartment was registered in the names of both parties as co-owners, which is why the respondent initially appeared to hold a 20% share.

The second rule is just as important. Article 214 of the Civil Code provides that the alteration of real rights takes effect when it is recorded in the register, and Article 215 draws the crucial distinction between the real right and the contract: a contract for the creation, alteration, transfer, or extinction of a real right in immovable property takes effect upon its formation, and failure to register does not affect the validity of the contract. In other words, the register governs the property right vis-a-vis the outside world, but the written contract between the parties governs their internal relationship.

A contract for the establishment, alteration, transfer or extinguishment of a real right in immovable property takes effect upon its formation, unless it is otherwise provided by law or agreed by the parties; the failure to register the real right does not affect the validity of the contract.

Civil Code of the People's Republic of China (2021), Article 215

Applied to the Huizhou case, the co-ownership shown on the register reflected the position in 2012, when the purchase was made. But the parties subsequently agreed, in writing, that the respondent had in fact contributed nothing and held a zero share. Under Article 215, that written agreement was valid from the moment it was signed, and the absence of a new registration did not invalidate it.

The Two Written Confirmations#

The evidence in the case was unusually strong. In July 2015, the respondent added a handwritten supplement to the property co-ownership agreement confirming that she had not paid any part of the purchase price, whether in cash or by bank transfer, and that her actual share was zero. In November 2015, she issued a further written statement acknowledging the same facts and undertaking to bear all costs of transferring the title into the other party's name. Both documents were signed in her own hand, and there was no evidence of fraud, duress, or violation of public order and morals.

When the respondent later claimed a 20% share, she pointed to more than fifty bank transfers made between 2015 and 2017, arguing that she had contributed to the mortgage and living expenses. The court examined the transfer records and found that every transfer was labelled as rent, living expenses, pocket money, goods payment, or repayment of loans; none was designated as payment for the property. Against the background of a long-term cohabitation in which the other party had borne the household costs, the court refused to characterise these transfers as purchase contributions, and it accepted the respondent's own written admissions as the truthful record of the parties' intent.

Transfer Costs Follow the Parties' Agreement#

The final issue concerned the costs of transferring the title. The respondent argued that under the deed tax rules, the transferee should bear the tax. The court held that the statutory default rule applies only in the absence of agreement. Where the parties have expressly agreed that one of them bears all costs of the transfer, that agreement prevails. The respondent had twice undertaken in writing to bear the full cost of changing the register to the other party's name, and the court ordered her to do exactly that.

The case therefore illustrates a general principle of Chinese contract law: parties may allocate financial burdens freely, and courts will enforce those allocations even when they depart from statutory default rules. A written undertaking signed voluntarily is not displaced by a general tax rule.

Agreed Shares Come First Under Article 309#

The priority given to the parties' written intention also follows directly from the Civil Code's rules on co-ownership. Article 309 of the Civil Code provides that the shares of co-owners in proportion in jointly owned immovable or movable property are determined by agreement; only where there is no agreement, or the agreement is unclear, does the law fall back on the amount of capital contributed, and only where that cannot be determined are the shares presumed equal. The statutory ladder therefore places a signed statement of shares at the top.

In the Huizhou case, the parties had both an initial co-ownership agreement and subsequent written confirmations, so the court never needed to apply the fallback rules. Had the confirmations been absent, the register and the initial 80/20 allocation might have governed; the written record is what moved the respondent's share to zero and made the outcome predictable.

Documenting Change and the Strength of Written Admissions#

The Huizhou case also shows how much turns on the quality of documentation. The respondent's first written admission was made in 2015, and the second in the same year, but the relationship had ended by 2024 and the dispute reached the court in 2025. More than nine years later, the written confirmations still carried the day. A signed, dated, and specific written admission of a factual position is one of the most durable forms of evidence in Chinese litigation. It does not expire with the passage of time, and it can only be displaced by evidence of fraud, duress, or a genuine subsequent change of position.

Partners in joint purchases should therefore treat every written statement about contributions and shares as a binding record. When one party confirms in writing that it holds a zero share, that document will govern the internal relationship even if the property register still shows co-ownership. The converse is also true: a party that wants to preserve a claim to a share should never sign a written confirmation that its contribution is zero, and should ensure that transfers intended as purchase contributions are labelled as such.

Practical Lessons for Partners in Joint Purchases#

For foreign investors and individuals entering partnership arrangements in China, the case offers clear guidance, and the principles apply whether the co-investment is a property purchase, a joint venture, or any other shared asset. First, put every contribution in writing: record who pays what, in what currency, and for what purpose. Second, treat the property register as a public record only, and sign a separate agreement governing the internal allocation of shares and costs. Third, when circumstances change, document the change in writing immediately; a handwritten supplement to the original agreement, signed and dated, is far stronger than an oral understanding. Fourth, label transfers accurately: a transfer described as living expenses will not later be recharacterised as a contribution to the purchase price. Finally, allocate transfer costs expressly in the agreement to avoid relying on statutory default rules. Liangjuan Li of Shanghai advises clients on partnership and joint venture arrangements, co-investment structures, and the documentation needed to protect each party's commercial expectations.