Post-Move-in Property Issues in Commercial Housing

Fights within residential communities include:
• Homeowners vs. developers
• Homeowners vs. the government
• Homeowner vs. homeowner
• Homeowners vs. their own representatives
• Homeowner representative vs. homeowner representative
• Homeowners vs. property management companies
• Homeowners vs. neighboring owners
When conflicts erupt, the tactics are diverse and plentiful (since everyone lives close by, physical altercations are possible), and they often directly involve public opinion. It’s not just about fighting; it’s about winning the support and attention of bystanders.
The root of these conflicts lies in the property service system: developers sell homes, buyers purchase them, and signing a contract is required. That contract includes a preliminary property service agreement. Most people sign it without even reading. Even if someone does read it, they can rarely make changes—everyone signs the same way, and if you refuse, your only option is to walk away.
In a property service contract, one party is the buyer, and the other is the property management company (appointed by the developer). Once owners move in, the company charges fees and provides services according to the contract.
In a community with 1,000 homeowners, there are 1,000 separate property service contracts. If some owners are dissatisfied with the current property company and want to switch to another, how can this be done?
Property management belongs to everyone, so a single homeowner cannot unilaterally change the contract; cooperation from other owners is required. Modifying and signing 1,000 contracts individually is an impossible task, so the only solution is a vote—consolidating 1,000 contracts into one through majority rule. The legal provisions for replacing a property company are outlined in the Property Law.
Article 76: The following matters shall be jointly decided by the owners:
(1) Formulating and amending the rules of procedure for the owners’ general meeting;
(2) Formulating and amending the management stipulations for the building and its ancillary facilities;
(3) Electing or replacing members of the owners’ committee;
(4) Hiring or dismissing the property service enterprise or other managers;
(5) Raising and using maintenance funds for the building and its ancillary facilities;
(6) Reconstructing or rebuilding the building and its ancillary facilities;
(7) Other major issues concerning shared rights and joint management.
Decisions on items (5) and (6) listed above must be agreed upon by owners whose exclusive portions account for more than two-thirds of the total building area and who represent more than two-thirds of the total number of owners.Decisions on other matters listed above must be agreed upon by owners whose exclusive portions account for more than half of the total building area and who represent more than half of the total number of owners.

When homeowners hold a general meeting, establish an owners’ committee, and receive consent from more than half of the owners, the committee signs a contract with the property company on behalf of all owners, which then becomes binding for the entire community.
In our daily lives, at least two things require voting: villagers electing their village director, and homeowners electing their owners’ committee. The latter is even more difficult because, first, no government body steps up to organize it proactively; second, it requires navigating legal requirements while balancing interests among various parties; and third, it demands overcoming a common weakness among Chinese homeowners: extreme confusion about the voting process.
• Mobilizing residents is very hard.
• Getting the government to cooperate with canvassing is very hard.
• Hoping the property company won’t cause trouble is very hard.
Property companies won’t simply sit idle and wait to be dismissed. Preliminary property services usually operate under a lump-sum system, where the company’s main business involves security, cleaning, and landscaping. These three functions can all be outsourced, and outsourcing comes with many advantages—including kickbacks. Currently, whenever a property company outsources security, cleaning, or landscaping, it receives kickbacks from the contracting firms.

Other services, such as elevator management, parking, clubhouses, advertising, and property offices, can also generate profit. However, these do not require specially trained staff. A small property management company basically only needs three people: one manager, one clerk, and one accountant. Employees mainly handle two tasks: after-sales service and fee collection.
Running a property company isn’t difficult; it’s essentially about collecting fees with a clear conscience. In a 100,000-square-meter community with a monthly fee of 2 yuan per square meter, the company collects 200,000 yuan each month. Roughly half goes toward elevator maintenance, while the rest covers security, cleaning, landscaping, plus various revenue streams from common areas. With such steady income, property companies run stable operations.
Besides the lump-sum system, some property companies use a commission-based system. Under lump-sum, the company decides how much to spend, keeping whatever is left. Under commission-based, the company’s fee is fixed, and any surplus must be spent on the community.
Obviously, the more money spent within the community, the better the quality; the less spent, the worse the quality. Property companies constantly cry poor, claiming they don’t make money or are even operating at a loss. Due to information asymmetry, owners rarely know exactly how much the company spends, so their evaluation of service quality relies mostly on personal experience.
In reality, most property companies do make money. If a company were truly losing money year after year and subsidizing the community, why wouldn’t it simply leave?
Developers would rather their own affiliated company earn this money than hand it to outsiders. Some developers promote the property company’s brand when selling homes, but this branding can be merely nominal—still using the developer’s own staff under another company’s name. China’s property system grants companies a monopolistic position that is difficult to replace, resulting in insufficient market competition within the industry.

The sub-district office responsible for overseeing the establishment of an owners’ committee is the neighborhood office

The neighborhood office is generally unwelcoming toward homeowners forming an owners’ committee because “establishing a committee equals canvassing equals troublemaking equals replacing the property company equals destabilization.” The worst part is that whenever homeowners attempt any action, they rarely hire lawyers, but if procedural errors occur, they invariably shift blame onto government departments. Property law is highly technical, and there are very few experts nationwide on this subject, primarily because handling such cases doesn’t generate profit.
When the justice bureau recommends legal counsel to sub-district offices, the selection is often arbitrary, leaving the office without professional legal support. Doing a good job earns no praise, doing poorly guarantees criticism, and if something goes wrong, officials risk severe repercussions.

If most owners in a community refuse to pay property fees, the company will have no income and must eventually leave. However, refusing to pay fees has severe drawbacks: it can lead to elevator shutdowns, ventilation failures, and water or power outages. Most communities’ critical equipment is controlled by the property company, so if the company doesn’t receive payment, it can wage a war of attrition against owners. Homeowner rights movements rely heavily on mass support. Once power is cut, some residents grow angrier, while others pivot to support the property company and oppose the very representatives they previously backed.
To pay or not to pay? Owners split into at least four factions as a result.
• Firmly refuse to pay
• Firmly insist on paying
• Unsure whether to pay
• Completely indifferent
About twenty to thirty owners firmly refuse to pay; another twenty to thirty insist on paying; two to three hundred are undecided; and six or seven hundred couldn’t care less. This is the normal state of affairs in any community. Therefore, the idea that owners could mobilize individually to get most residents to stop paying fees is objectively unrealistic. You may think you represent the majority (responding enthusiastically in WeChat groups), but in reality, you only represent those few who regularly exchange memes with you, amusing yourselves in your private circles!
Said differently, don’t assume that because community property services are poor, all dissenting owners who refuse to pay are virtuous. Among those who firmly refuse to pay, besides rights defenders, there are also chronic non-payers—deadbeats who never pay fees in any community. Rights defenders themselves aren’t always pure in motive. Some simply want to defeat a bad property company. Others have more complex agendas, aiming to replace the company with their own. Some are driven by a desire for power, enjoying the prestige of being committee director and having people rally behind them during disputes. Still others seek money, since the committee director can influence beneficial projects for the community, such as bidding for fire equipment upgrades. But don’t assume rights defenders are reliable; scheming individuals often fail to achieve results, yet under the drive of self-interest, their fighting spirit can sometimes surpass that of genuine advocates!
Among those who firmly pay their fees, there are also undercover agents for developers or property companies. In some communities where apartments were sold at discounted rates or given away, some people obtained units for free through connections, while others bought at below-market prices through relationships. During community disputes, these individuals cannot side with homeowners; they inevitably align with the property company and developers. Such people often engage in reverse propaganda: the more you criticize the property company, the more they defend it. Developers can easily buy off a homeowner by simply handing them a construction project—no cash needed. Some homeowners have a remarkably low threshold for bribery; for instance, waiving two years of fees is enough to turn them against the movement.

A well-maintained community requires continuous care and management. Throughout this process, homeowner representatives will inevitably gradually form an owners’ organization. The difference between communities with and without a committee, and whether the committee can effectively manage the community, reflects the determination and wisdom of at least half its residents.

If someone pokes holes in your door, if garbage piles up unmanaged outside your home, if your community is overrun with weeds, or if property guards assault owners, you have three choices:
• Pay property fees, form an owners’ committee, and oust the bad property company. (Often the hardest)
• Refuse to pay fees, wait to be sued, and settle during the first instance trial.
• Sell the property and leave, voting with your feet