Money

Clarified property management rule to stifle lasting tiffs

By Liu Lu (China Daily)
Updated: 2010-05-28 07:50

Disputes between residential property management companies and homeowners in the city are expected to decline, thanks to new rules enacted on Thursday.

The Beijing Property Management Regulation will take effect Oct 1. It clarifies the rights and obligations of both homeowners and property management companies.

The new regulation provides a legal basis to solve long-existing problems in the city's property management industry, said Li Lingyan, deputy director of the legal affairs office of the municipal government.

"The proper implementation of the regulation is crucial in regulating the property management companies' behavior and protecting the interests of property owners and the companies," said Li.

The rules also spell out policies on the transfer of property management responsibilities.

"Homeowners should not be charged for services provided by the developers before the establishment of the homeowners committee," said Yu Liang, chief of the property management division of Beijing municipal commission of housing and urban-rural development.

Yu said detailed rules would be drafted to set deadlines for the establishment of owners' committees. Those rules would target those who evade payments by deliberately delaying the establishment of committees. They would make free maintenance services a long-term burden for developers.

Real estate developers can also take the initiative to establish the homeowners committees to hand over management responsibilities in advance. But before a rights transfer, developers must invite a third party to assess their work and satisfy homeowners, proven through good evaluations.

"Any remaining housing quality problems should be fixed by the construction companies before they hand over the management rights," Yu said.

But some legal experts believe there are loopholes in the definition of what constitutes a third party.

"The new regulation hasn't specified how to choose a neutral third party to prevent cheating in the assessment," said Zhang Daxian, director of the property owner and management office of the China Association of Social Workers. "I hope the government will make detailed solutions to plug those kinds of loopholes as soon as possible."

According to the regulation, property companies that refuse to withdraw within a set time after receiving vetoes from two-thirds of the homeowners will be fined up to 100,000 yuan.

"I think the fine is too small to have a deterrent power for some companies," added Zhang.

The new regulation makes another breakthrough by dividing the property services into five standards. Homeowners can select their preferred services before signing the contract.

Moreover, the city's property management association will publish a quarterly report showing the average cost of property management services in the city, providing a reference point.

When a price dispute occurs, a third party will be introduced to help make an assessment to set a mutually accepted price, said Zhang Nongke, deputy director of Beijing municipal commission of housing and urban-rural development.

"Only people who have received training and passed all the assessment procedures are qualified to be project managers or management staff of property management companies," said Zhang.

The draft of the regulation was open to public comments from Nov 18 to Dec 7. The city government gathered many opinions and suggestions from 761 citizens, most of whom expressed their concern about whether the legislation will fully solve the disputes.

"My house had been vacant for one year because of my job transfer. I haven't enjoyed any services provided by my property management company, but they want me to pay the fees. It's unfair," said a woman surnamed Liu, a resident in a newly developed residential community along Xiaotunlu, in Fengtai district.

"I hope the new law will give a satisfactory answer to end my confusion."

By far, buildings with property management in Beijing have achieved more than 400 million sq m, covering 80 percent of the city's total residential area. A total of 730 residential projects have established homeowners' committees, accounting for 20 percent of the city's total number of residential projects.