A landmark property heavily decorated with pieces of porcelain in central Tianjin will be put up for auction on Tuesday after its owner defaulted on loan payments.

Zhang Lianzhi purchased the French-style villa, a diplomatic residence in the 1920s and '30s, in 2002 and spent a decade transforming it using tons of multicolored porcelain shards.

Since 2007, he has operated the property as a private museum called China House, which receives more than 4,000 visitors a day, according to his office.

The Dongli District People's Court seized the house this year and announced a public sale after Zhang defaulted on a loan provided by Xinze, a local credit company.

The lender said Zhang owes 100 million yuan ($14.9 million), Beijing News reported. But the museum owner - who was detained three times over the dispute since last summer - told China Daily that the sum is closer to 58 million yuan. A reserve price of 140 million yuan has been set for the auction, according to a court statement.

Yet according to Guohongxin, an appraisal company commissioned by Zhang, the estimated market value of the property is more than 9.8 billion yuan, with most of that coming from the value of the porcelain.

The court is not entitled to sell the porcelain decor, so "the buyer will need to reach an agreement on its disposal" after the sale, a judge surnamed Zheng was quoted as saying by Innovative Finance Observation, a local newspaper.

Wang Dianxue, the museum owner's attorney, told China Daily on Monday that it is unreasonable for the court to consider the value of the house and its decor separately.

"It's like a well-decorated house: You cannot separate the interior decoration from the house itself," he said.

China House, while popular with visitors and Tianjin's tourist industry, has long been controversial among heritage experts.

"The redecoration greatly infringed the aesthetic experience of the original house and left a mark on Tianjin," said Fu Lei, a volunteer with Tianjin Memories, an NGO devoted to the preservation of old architecture.

Beijing News quoted an anonymous former employee at Tianjin Museum who said changing the exterior of the historic villa had violated local rules on protecting cultural relics.

Under regulations issued in 2005 by the municipal government, buildings listed as major protection sites - which China House is - cannot be restructured or redesigned.

However, Zhang argued that when he bought the building it was in a dangerous condition. He said the porcelain and some concrete work had helped reinforce the structure.

"By adding the porcelain to the exterior, all from my private collection, I haven't done damage," he said.

Wang, the attorney, said he has filed an appeal with the court to postpone the auction.

"China House was listed as a cultural relic in 2004 by the city government and is listed as a 3A tourist site by the city tourism administration," he said. "Yet the authorities filed no objection back then. Thus, it is unreasonable to say that Zhang violated the regulations."

Li Lei contributed to this story.

zhangmin@chinadaily.com.cn