Who will receive a portion of the profits from the National Day flag raising event held by Shenzhen property owners? Lawyer interprets the boundary of property compliance
Before and after the National Day holiday, communities such as Meilin Village, Fenghuang Yinghui City, and Gongyuan Dadi in Shenzhen were decorated with red lanterns and five-star red flags. Several property companies, including Wanxia Housing, Great Wall Property, and CMB Jiyu, organized activities such as neighborhood festivals, public welfare movie screenings, and condolences for elderly people living alone. Some small areas also set up themed check-in walls in conjunction with APEC civilization promotion. From the perspective of community governance, this is a positive measure taken by property management enterprises to fulfill their service functions and create a festive atmosphere. But from a legal perspective, these activities involve a long neglected but highly contentious issue: where does the decoration expenditure in the community come from? Who will receive the profits generated from organizing activities and promoting in public spaces? The boundary of rights between homeowners and property management around shared parts is much more complex than a national flag or a lantern.
1、 Where does the money come from for hanging the national flag and organizing activities in the community? The attribution of shared profits among property owners is the core
Article 271 of the Civil Code clearly states that owners have ownership of exclusive parts such as residential and commercial buildings within a building, and have the right to jointly own and manage the common parts outside of the exclusive parts. Article 282 stipulates that the income generated by the construction unit, property service enterprise, or other managers using the common part of the owners, after deducting reasonable costs, belongs to the common ownership of the owners. This means that if the elevator lobby, exterior walls, public areas, barriers and other areas in the community are used for advertising or commercial promotion, the revenue generated should be attributed to all owners after deducting reasonable costs.
National Day decorations and community activities themselves usually belong to the service content or public welfare expenditures stipulated in the property service contract, and are generally funded from property fees or public benefits. But the problem is that if property companies bundle holiday activities with commercial promotion, such as introducing sponsors during events, setting up check-in devices with commercial logos in public spaces, or using event photos for corporate brand promotion, it may touch upon the issue of ownership of shared operating profits. In practice, many property management companies believe that "the activities are organized by me, and the profits naturally belong to me", but this understanding is not legally valid.
The Shenzhen Intermediate People's Court has confirmed in multiple property dispute cases that property enterprises using shared parts to carry out business activities shall obtain the consent of the owners' meeting or all owners, and the ownership of profits shall not change due to the fact that the operating entity is the property. If the holiday decoration is only of a public welfare nature and the cost is covered by the property management fee, there is usually no need for a separate vote; But once it involves commercial cooperation or revenue generation, corresponding decision-making and disclosure procedures must be followed.
2、 Compliance red line for property management activities: right to know, right to decide, and obligation to disclose information
Article 278 of the Civil Code lists "using the jointly owned part to engage in business activities" as a matter to be jointly decided by the owners, which shall be approved by more than half of the owners who participate in the voting of the exclusive part area and more than half of the owners who participate in the voting. At the same time, Article 285 stipulates that property service enterprises shall promptly respond to inquiries from owners regarding property services, and cooperate with the owners' meeting or owners' committee to perform their duties.
In practice, if the activities carried out by property companies during the National Day holiday involve the occupation of public spaces, the operation of shared parts, or the generation of income, at least three points should be achieved: firstly, prior notification should be given, and the content of the activities, the scope of venue use, and the source of expenses should be disclosed to the owners; Secondly, compliance with procedures requires approval from the owners' meeting or the owners' committee for business matters; Thirdly, the accounts should be transparent, and activity expenses and any income should be included in the public revenue accounts and regularly disclosed.
The Shenzhen Property Management Industry Association has issued multiple documents in recent years to promote transparency in public revenue, requiring property companies to disclose their public revenue and expenditure on a quarterly basis. However, from the complaints and litigation cases of property owners, temporary stalls, sponsorship cooperation, and advertising placement during holiday activities are often high-risk areas for public revenue leakage. If the owner discovers that the property management company is using holiday activities to seek undisclosed profits, they can request the property management company to bear civil liabilities such as stopping infringement, eliminating obstacles, and compensating for losses in accordance with Article 287 of the Civil Code. They can also file a complaint with the street office or housing and construction department and demand rectification.
3、 Comforting elderly people living alone is a good thing, but service boundaries and responsibility risks cannot be ignored
It was mentioned in the news that companies such as Century Property, Northern Property, and Hanjing Property visited and comforted elderly people living alone before the holiday, delivering supplies such as cooking oil and fruits. This type of behavior is worthy of recognition, but from a legal perspective, when property companies carry out special group care actions, they also need to clarify service boundaries and responsibility risks.
The core obligations of property management enterprises come from property service contracts, which usually include maintenance of public areas, order management, and operation of facilities and equipment, but do not necessarily include caregiving obligations for specific owners. If the property management company makes commitments beyond the scope of the contract during the condolence process, such as promises to regularly visit and take care of medical or living affairs, and fails to fulfill them or accidents occur, the owner may claim breach of contract liability or even tort liability.
A more prudent approach is to position caring actions as public welfare volunteer services or community building activities, and clarify that they do not constitute legal or contractual obligations to homeowners; For visits to households, records should be kept and proof of consent from the owners or their families should be retained; If an elderly person is found to have urgent health or safety risks, contact their family members, community workstations, or report to the police in a timely manner, rather than disposing of them on your own. There have been precedents in Shenzhen showing that property companies have been held partially liable for compensation due to excessive involvement in the private affairs of property owners and failure to fulfill their reasonable duty of care. This risk is worthy of industry vigilance.
4、 How can homeowners use the law to protect their rights? Lawyer gives three practical suggestions
For homeowners, the activities of property management companies during holidays are not only services, but also a window to observe their compliance awareness. If the following situations are found, it is recommended to take legal action in a timely manner: first, public areas are used for commercial promotion or operation but the profits are not disclosed; The second is that the activity expenses are funded from public benefits but not jointly decided by the owners; Thirdly, property management companies collect owner information for commercial purposes under the guise of activities.
In terms of specific operations, property owners can request in writing that the property management company disclose the activity plan, cost sources, and revenue situation, based on Article 285 of the Civil Code and relevant provisions of the Property Management Regulations. If the property management company refuses to publicize, the owners can report to the owners' committee, which will supervise the rectification; If there is no property committee, you can file a complaint with the street office, community workstation, or district housing and construction department. For cases involving large amounts of money or continuous infringement, a lawyer can be commissioned to send a letter or file a lawsuit, requesting confirmation of the ownership of profits, return of profits, and compensation for losses.
For property management companies, creating a festive atmosphere is a bonus, but compliance is the bottom line. It is recommended to introduce legal review during the event planning stage, clarify the channels for expense allocation, shared usage rights, business cooperation boundaries, and information disclosure arrangements to avoid "doing bad things with good intentions".
Guangdong Zhiming Law Firm has long served Shenzhen property enterprises and owners' committees, accumulating rich practical experience in property contract review, public interest recovery, and owner's right to know litigation. Whether property companies need compliance guidance or homeowners need support for their rights, they can obtain practical legal solutions from professional lawyers. The Chinese red in the community should be both festive and clear.
