Interpreting the Law Through Cases

On June 26, 2015, a property management company entered into a Property Service Contract with a homeowners’ committee, under which the property management company agreed to provide property services for a certain residential community. Subsequently, the two parties repeatedly extended the contract term through written agreements. Mr. Yuan is a homeowner in that community and is required to pay monthly property fees of RMB 106.3. On December 2, 2022, the property management company mailed Mr. Yuan a Payment Notice, demanding payment of RMB 2,551.2 for property fees covering the period from January 2021 to December 2022; however, Mr. Yuan refused to accept the notice. Mr. Yuan contends that the property management company has failed to carry out reasonable and effective management and maintenance of the community. For example, the addition of parking spaces has narrowed the community’s roads; motor vehicles parked outside the buildings have damaged wall corners and curbs, allowing rainwater to seep into the premises; vehicles frequently pass through the community at night, honking their horns and disturbing Mr. Yuan and his family’s rest; and vehicles parked atop manhole covers over septic tanks pose safety hazards. Mr. Yuan stated that he would be willing to pay the outstanding property fees if the property management company addressed these issues. Subsequently, the property management company brought suit before the court, seeking payment of the aforementioned property fees.

The court, after trial, finds that, The Property Service Contract is an agreement entered into by the Owners’ Assembly or the Owners’ Committee, acting on behalf of all owners, with the property management company regarding the administration of the residential community’s property; it is binding upon all owners. In accordance with the contract, the property management company is obligated to provide property services, and the owners are accordingly required to pay the prescribed property fees. With respect to any deficiencies in the services, owners may submit reasonable suggestions and comments; however, such feedback does not constitute grounds for refusing to pay the property fees. Having already received the services provided by a certain property management company, Mr. Yuan is obligated to pay the corresponding property fees in accordance with the fee schedule stipulated in the Property Service Contract.

Rule of Law Recommendations

Property service disputes are a common pain point in community governance. In this case, on the one hand, the boundaries of rights and obligations were clarified: for minor defects in service, owners are entitled to offer reasonable suggestions and feedback, but such issues do not constitute grounds for refusing to pay property service fees. On the other hand, the case offers important insights for fostering harmonious communities, emphasizing the need to balance adherence to contractual principles with continuous efforts by property management to enhance service quality. Community governance is a systemic undertaking; only by staying within the framework of the rule of law and pursuing a dual‑pronged approach—upholding the spirit of contract while improving property management services—can true community harmony be achieved.

In this regard, the following recommendations are proposed:

● Homeowners should uphold the spirit of contract and pursue their rights rationally: they should view the “continuity” and “imperfections” of property services in a balanced manner, assert their rights prudently, and seek redress through lawful channels. If homeowners identify defects in property services, they should preserve evidence by taking photographs, recording videos, or keeping written records, and promptly submit requests for corrective action to the property management company. Should the property management company fail to address these issues, homeowners may safeguard their legitimate rights and interests by bringing the matter to the attention of the residents’ committee, the subdistrict office, or the property management association.

● Property management companies should elevate their service standards and fulfill their duties conscientiously: strengthen their service orientation and proactively accept oversight. They must strictly perform their obligations in accordance with the terms of the property service contract, establish a rapid response mechanism to address reasonable suggestions and complaints from owners, enhance their problem‑resolution capabilities, and ensure that every issue receives a timely reply. At the same time, they should regularly disclose service details, fee schedules, and progress on corrective measures, thereby safeguarding owners’ rights to information and oversight. For areas critical to public safety and basic living needs—such as parking, facility maintenance, and fire safety—property management should put in place routine management systems, earning owners’ trust through concrete actions.

● The community achieves coordinated governance and positive interaction by refining communication mechanisms to resolve conflicts and disputes. The owners’ committee should serve as a bridge, establishing channels for dialogue between residents and the property management company—such as WeChat groups for residents and regular resident‑接待 days—and disseminating legal knowledge related to property services through case studies. It should also urge the property management company to improve its services, guide residents in exercising their rights in a rational manner, and jointly foster a community environment characterized by lawfulness and contract compliance. Meanwhile, the neighborhood committee, subdistrict office, and property service associations should strengthen guidance and oversight of property management within residential communities, engage multiple stakeholders in mediation efforts, intervene promptly, and facilitate negotiations between the parties within the legal framework, thereby safeguarding community harmony and stability.

Relevant statutory provisions

( Reposted from: Shanghai No. 2 Intermediate People’s Court)

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