[2] Compiled from: Shandong High Court
 
Case review
[4] Tianhua Property Company is the property management company of Yingxiang Community, and Zhao is an owner of the community. On November 2, 2012, both parties signed a property management service agreement, which stipulated the rights and obligations of both parties, as well as matters such as the content of property management services, quality of property management services, property management service fees, and liability for breach of contract; however, the agreement did not specify matters concerning contract modification or termination.

 
 

On September 28, 2018, Tianhua Property Management Company posted a "Property Fee Adjustment Notice" in Yingxiang Residential Community to adjust property fees.
 
From October to December 2018, Tianhua Property Management Company distributed "Tianhua Property Management Co., Ltd. Fee Adjustment Opinion Solicitation Forms" in Yingxiang Residential Community to seek opinions.
 
Starting January 1, 2019, Tianhua Property Management Company began collecting property fees at the adjusted rate. Due to Zhao's refusal to pay, Tianhua Property Management Company filed a lawsuit. During the trial, it was found that Yingxiang Residential Community (Phase I) has a total of 370 homeowners with a building area of over 48,600 square meters, and the community has not established an owners' committee. While providing property services to Yingxiang Residential Community, Tianhua Property Management Company did not disclose its revenue and expenditure to the community's homeowners, nor did it file the property fee adjustment matters with the relevant government price departments.

 
 

 
[1] Court Opinion
The adjustment of property service fees is a major property management matter within the property management area. In this case, the community involved has not yet established an owners' assembly or elected an owners' committee. The local residents' committee should perform the duties of the owners' committee. Under the guidance and supervision of the local subdistrict office or township government, it should fully negotiate with the majority of homeowners, conduct thorough investigations into the property service fee adjustment, widely solicit opinions from all homeowners, and report the investigation results to the community residents' committee and subdistrict office. Only after the community residents' committee and subdistrict office both approve the investigation results and agree to the increase in community property fees can the property management fee adjustment proceed.
 
The court determined that there was insufficient negotiation and dismissed Tianhua Property Management Company's lawsuit regarding the fee adjustment portion.
 

 

 
Article 943 of the Civil Code of the People's Republic of China.
The property service provider shall regularly disclose to the owners, in a reasonable manner, information such as the service items, responsible personnel, quality requirements, fee items, fee standards, performance status, as well as the use of maintenance funds, and the operation and income of the owners' shared parts, and shall report to the owners' assembly and the owners' committee.
 
 
Article 11 of the Property Management Regulations
The following matters shall be jointly decided by the owners: (1) formulating and amending the rules of procedure of the owners' assembly; (2) formulating and amending the management regulations; (3) electing or replacing members of the owners' committee; (4) selecting and dismissing property service enterprises; (5) raising and using special maintenance funds; (6) renovating or reconstructing buildings and their ancillary facilities; (7) other major matters concerning shared and joint management rights.
 
 
 
Article 58 of the Ministry of Housing and Urban-Rural Development Document [2009] No. 274, the Notice on Issuing the Guiding Rules for the Owners' Assembly and the Owners' Committee
If, due to objective reasons, an owners' committee cannot be elected or the number of its members is less than half of the total, before the new owners' committee is formed, the residents' committee of the property's location may, under the guidance and supervision of the sub-district office or the township/town people's government, exercise the duties of the owners' committee.
 
 
[1] The author's perspective
The services of a property company are intended to facilitate the owners' better management and use of the residential community, but the property company and the owners are always in a contractual relationship. Therefore, property service fees should follow the principles of matching quality with price, fairness and openness, and reasonableness and good faith. The property company should provide property services and collect fees in accordance with the contract, and the owners should also pay the corresponding fees as per the contract. However, if the property company collects fees beyond those stipulated in the contract, lacking contractual basis, such charges should not be supported.
 
Market changes are understandable, but if property service fees need to be raised, it must be strictly implemented in accordance with relevant regulations. Since property fees involve the interests of the majority of owners, property service companies should fully discuss and negotiate with the owners' committee and obtain approval from the owners' general meeting. Even if no owners' general meeting has been established, it requires the consent of owners who hold more than half of the total building area and account for more than half of the total number of owners. Otherwise, due to the illegal adjustment procedure, it cannot receive legal support.