THE state of disrepair of household buildings, evident in falling exterior tiles, was a common worry last year among residents of the Shuiyan Mingju community in Beijing’s Haidian District. Dissatisfaction with their property management company and the need to have a say in repairs and apportionment of related costs prompted Yu Lin and other householders to apply to the local administrative office for permission to set up a property owners’ committee.
　　Rapid development of China’s real estate market in recent years has spawned new social conflicts. Civil disputes among property owners, property management companies and developers now embody the bulk of problems arising within urban communities. Committees comprising the actual owners of estate property present a viable solution. They are autonomous civic organizations that protect the interests of the home-owning residents of particular residential areas that sponsor them, and play a decisive role in involving individuals in public affairs and building a more harmonious pattern of neighborhood relations amid China’s sweeping urbanization.
　　owners Take a stand
　　Up to the 1980s, urban families in China lived mainly in accommodation allocated to them and administrated by their work units. Reforms to the housing system and developments in the commercialized real estate market gave rise to property management companies responsible for maintaining communal facilities. But as a third party contracted by developers and hence quite removed from the owners, these companies are often perceived as undermining property owners’ interests.
　　Most of the residents of Langqinyuan, a 400,000-sq-m residential district in central Beijing’s Xicheng District comprising 2,400 households, moved there in 2005. A year later, the property company arbitrarily raised car-parking fees from RMB 150 per month to RMB 2 per hour. Residents sent representatives to negotiate with the company on several occasions, but to no avail. Disputes on the matter soon escalated to the point where angry residents set up a roadblock at the community entrance. Eventually the local government stepped in to help settle the matter. Shortly after, property developers drilled 18 wells within Langqinyuan premises to provide water for newly built offices nearby. As six of the wells were within 20 meters of household buildings, residents were understandably concerned about the safety of their homes. As one owner, now a member of the owners’ committee, Luan Jimin explained, “This incident alerted us to the imperative to set up a home owners’committee. We need an organization to represent our collective will and interests that gives us a united voice and the power to protect our rights in the face of unscrupulous property companies and property developers.”
　　Luan Jimin and some other householders voluntarily went about the detailed procedure of setting up a property owners’ committee. They were bound by law to confirm a 50 percent or more occupancy of the residential district, and that more than two years had elapsed since the first resident moved in. They accordingly drew up the relevant documents and delivered them in person to each household. In April 2007, members of the property
　　owners’ committee were duly elected. Their first task was to get rid of the existent property management company and, after inviting public bidding, to take on the Jiahao Company. The next step was to bring a lawsuit against the property developers requiring them to fill in the wells they had sunk in the community. The Beijing Water Authority eventually made an investigation that ended in its sealing the wells and imposing a fine on the developers.
　　Langqinyuan property owners are satisfied with the new property management company, which has reduced service fees from RMB 2.5 to RMB 2.2 per square meter, and halved the parking fee. As Mr. Zhu pointed out, “Our community has a pleasant environment, and residents from outside often come here for a stroll or to walk their dogs. People would use it as a shortcut, dropping litter and causing disturbances before we set up our committee. Since the Jiahao Company set up enclosing walls, it’s much safer and cleaner.”
　　Luan Jimin was at work as he spoke to us, distributing information sheets. “The contract with the Jiahao property management company is due for renewal, so we’ve scheduled the fifth owners’ committee meeting to discuss whether or not to take on a new company,” he explained.
　　


　　Lean Legislation
　　At the moment, the Property Law; the Regulations on Property Management; and the Regulations on Management of Residential Building Maintenance Funds are the only guidelines available to property owners’ committees through which to administrate their communities. This absence of legislation has created a dilemma for Fengdan Lishe neighborhood in Beijing’s Haidian District. As vice chairperson of the property owners’committee, now in its third term, Ms. Pei pointed out, “These three laws don’t cover every aspect of our daily problems. Residents who take advantage of the communal space to construct prohibited additions to their homes are a common example. All the committee can do is to try to persuade them to demolish these extensions. But they generally refuse, and the damage these infringements cause to other residents’ interests results in their refusal to pay management fees the following year. As a lawsuit drags on for as long as six months to a year before the ruling is made, there is nothing we can do in the meantime.”
　　This is an all-pervasive problem. On average, just 70 percent – downward to 30 percent – of Beijing residents pay their property management fees, according to incomplete statistics. Property owner Shu Kexin has been active in protecting his rights and is now an expert in this field. He commented that refusing to pay these fees signifies property owners’ dissatisfaction with the property management company, but it may result in even worse service and the start of a vicious circle.
　　What’s more, current laws and regulations make no mention of supervision of fees imposed either for management or maintenance, or of public revenues, such as income from advertisements on elevators, generated on the premises of resi- dential districts.
　　The owners’ committee, moreover, is still nascent. The Regulations on Property Management, released in 2003, first established the concept, and The Property Law legalized it in 2007. But considered as a whole, relatively few residential districts have property owners’ committees, despite longstanding unresolved problems between residents and property management companies/developers. Local governments, however, are bringing local regulations into effect that will provide more rounded legal recourse.
　　new Management Modes
　　When Langqinyuan Community first appointed the Jiahao Property Management Company it put a trust mode into operation. It consists of building a trust system and a platform for individual owners, the owners’ committee, and the property management company. Their expectations are that broader participation by more individuals with various interests will enable more effective management of the community as a whole.
　　Shu Kexin pointed out that although China’s present management modes require property owners to pay fees, they do not give them the right as individuals to complain directly to the property management company. All property owners can do is to raise suggestions and offer advice that the owners’committee take up and negotiate with the property management company. There is hence a clear imbalance between owners’ rights and obligations. The trust system, however, endows upon the individual owner the rights and means to advise, supervise, and obtain information.
　　For the past four years, Langqinyuan residents have had access to the community accounts through the financial supervision team that property owners have appointed. Team member Ms. Pan confirmed that the team oversees audits and accounting processes and carries out a monthly check of revenues, such as advertisement fees and rent for public space. After deducting costs, the revenues are divided among the property owners. In 2011, they added up to RMB 582,300.
　　Meng Xiansheng, a lawyer at Beijing Renhe Law Firm, remarked that the Langqinyuan property management mode is an appropriate pilot for the present relevant law system. It reveals the advantages of a trust when introduced into property management.
　　This trust indenture management mode has since been promoted in many communities in Beijing, but is still at an experimental stage.
　　


　　Encourage Participation
　　Shuiyan Mingju resident Yu Lin and some of her neighbors spent six months setting up their property owners’ committee. The time was mainly taken up going to the local administrative office, meeting with developers, liaising with the property management company, exchanging ideas with individual residents and checking related laws. “At first we were all very enthusiastic about our tasks of following the procedures and distributing materials. But neither the property management company nor the developer was cooperative. According to law, the latter should have allocated us a room as an office. But they did not, so we had to hold meetings standing in the yard or at one of our homes. This so dampened our spirits that some members lost interest and dropped out. Also, as most property owners are about 40 years old and at the busiest time of both their careers and family life, many stood down from the committee shortly after it was set up.”
　　Ms. Pei was elected vice chairperson of the Fengdan Lishe community property owners’ committee last year. Now 57, she retired two years ago. Her experience has shown that property owners are keen enough on establishing the owners’ committee but not on participating in the actual work. As the committee runs on a voluntary basis, it’s hard to get young professionals to join in because they are focused on their careers. “But retired property owners lack the energy and drive necessary to pursue solutions to the problems that arise,” Pei said.
　　“Low participation by property owners is the main obstacle to establishing owners’ committees, probably because we Chinese are too accustomed to being administrated and fostered. But to protect your own interests, you have to be proactive in standing up for them. Owners are becoming more aware of this, as evident in the new owners’ committees established every year,” Shu Kexin concluded. He mentioned that Beijing’s Haidian District is trying to set up owners’ committees in each commodity housing district. “The Property Law is important for communities’ healthy development because it gives them property rights and also the right to self-administration through the help of property owners’ committees.”