In 1988, the Constitution of the PRC was amended. In places concerning land, the language of 「land use rights can be transferred according to the law」(Article 10) was added. In this manner, the framework of a separation between land ownership and land use rights was clearly set. The basic goal of land use reform is to “eventually turn land without cost and time limits into land with both cost and time limits.” The regulations further stated that the state-owned urban land use rights are independent economic rights. Within a certain time limit, the rights can be sold, exchanged, given as a gift, leased, or used for mortgages. Independent land leased and used for mortgages can not only benefit from the establishment of the land market but can also help to improve efficiency in the land used process. This study includes judicial problems of state-owned urban land use right leased and used for mortgages, and offers suggestions for change.