Where has all the property management fees over the years gone?

Compiled from: Pingjiang Court
 
Case review
In May 2015, Yang purchased a residence in a community in Pingjiang County, Hunan Province, and completed the property handover procedures. That same year, Yang signed a property service agreement with the property management company. Subsequently, as Yang consistently failed to pay the property fee, the company repeatedly called to demand payment, but Yang refused on the grounds of not actually moving in.

 
 

In September 2020, the property management company sued Yang in Pingjiang County People's Court, demanding payment of the property fee and nearly one thousand yuan in liquidated damages.
 
During the trial, Yang argued that the property had remained idle after delivery—neither renovated, occupied, nor used—and that he had never received any services from the property management company, thus he should not pay the fee or damages. The company insisted that despite the property being idle, it had provided services for the safety of the property, maintenance of public facilities, and overall landscaping and cleaning of the community, so Yang was obligated to pay the fee and bear the liquidated damages.
 
 
[1] Relevant laws and regulations
Civil Code of the People's Republic of China  Article 944
The owner shall pay the property fee to the property service provider as agreed. If the property service provider has provided services in accordance with the agreement and relevant regulations, the owner shall not refuse to pay the property fee on the grounds of not having accepted or not needing the relevant property services.
 
《 [1] The People's Republic of China Contract Law Article 60 Strict Performance and Good Faith
The parties shall fully perform their obligations as agreed. The parties shall follow the principle of good faith and perform obligations such as notification, assistance, and confidentiality in accordance with the nature, purpose, and trade practices of the contract.
 
Article 6 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Specific Application of Law in the Trial of Property Service Dispute Cases
If, after a written demand for payment, the owner refuses to pay without justifiable reasons or fails to pay the property fee within a reasonable period specified in the demand, and the property service enterprise requests the owner to pay the property fee, the people's court shall support it. If the property service enterprise has provided services in accordance with the contract and relevant regulations, and the owner only uses the defense of not having enjoyed or not needing the relevant property services, the people's court shall not support it.
 
 
[1] Court Opinion
After trial, the court held that Yang, as an owner, and the property company provided property services to Yang based on the contract signed by both parties. Therefore, the dispute between the parties was a property service contract dispute, and Yang should pay the property fee to the plaintiff in accordance with the property service contract and relevant regulations. The court did not accept Yang's argument that he had not actually lived in the property after completing the check-in procedures and had not enjoyed any services provided by the property company, and thus should not pay the property fee and liquidated damages.
 
The court ruled that Yang should pay the property fee for the period from 2015 to December 31, 2019.

 

 
[1] The author's perspective
Property management fees are the fees that a property management company charges property users or owners for providing property management services based on a property management service contract, and that property users or owners should pay according to the property management service contract. It mainly includes cleaning fees, security fees, greening fees, etc., most of which are for the management of common areas and the maintenance of shared equipment and facilities for all owners, not specifically for the service of a particular owner.
 
In this case, although the house was vacant, the community's sanitation still needed daily cleaning, public order had to be constantly patrolled and maintained, and all facilities and equipment, such as elevators and fire protection, had to be paid for without a penny less. Property services are public in nature, and their value lies in meeting public services while improving the overall living environment quality, ultimately reflected in the service value to individual owners. For this reason, the upcoming Civil Code also explicitly stipulates that owners cannot refuse to pay property fees solely on the grounds that they have not enjoyed or do not need relevant property services.