Court Orders Payment of CNY 3176.63 in Property Fee Dispute
A property management company filed a lawsuit against a homeowner in Eastern China City for unpaid物业管理 fees and late payment penalties. The court ruled in favor of the company on the principal amount but rejected the claim for penalties due to the company’s own service shortcomings. The case highlights the reciprocal obligations under Chinese property management contracts.
The plaintiff, a property management company, managed a residential community in Eastern China City’s North New District. The defendant, Ms. Liu, owned a unit in that community. The parties signed a preliminary property management service agreement in November 2008, setting the fee at CNY 1.9 per square meter per month for the 210.14-square-meter property, payable semi-annually. The plaintiff claimed Ms. Liu owed fees from November 1, 2009, to June 30, 2010, totaling CNY 3176.63, plus CNY 240 in late payment penalties. The plaintiff also sought reimbursement for postage and copying costs. Ms. Liu refused payment, alleging poor service quality: the company failed to help form an owners’ committee, did not address heating issues, neglected maintenance, and mishandled repair requests for roof leaks and damaged doors, even losing personal items left in the unit.
During the hearing, the plaintiff submitted the signed service agreement and provided statements. Ms. Liu’s representative argued that the company had reduced service standards and failed to fulfill contractual duties. The court examined the evidence, including the agreement and testimony, and noted that both parties had participated in the trial. The plaintiff acknowledged that certain services, such as vehicle entry registration and common-area maintenance, were not fully performed. The court accepted the agreement as valid and the defendant’s non-payment as established by the evidence.
The court held that the property management service agreement was legally binding, as both parties had voluntarily entered into it. Since the plaintiff had provided property management services during the disputed period, Ms. Liu was obligated to pay the overdue fees of CNY 3176.63. However, the court found that the plaintiff had not fully performed its contractual obligations, citing issues like inadequate vehicle registration and delayed common-area repairs. Therefore, the court rejected the claim for late payment penalties. The court also denied the request for postage and copying costs, as the plaintiff failed to provide supporting receipts.
According to Chinese contract law, parties must fully perform their obligations in good faith. The court applied Article 60 of the Contract Law, which requires complete performance, and Article 111, which allows the aggrieved party to demand remedies for substandard performance. Under the Property Management Regulations, owners must pay fees per the service contract (Article 42), but the court balanced this with the service provider’s duty to meet quality standards. Evidence rules placed the burden of proof on each party; the plaintiff proved the debt, while the defendant’s service complaints were partially substantiated by the court’s own observations.
This case underscores that property management disputes often involve reciprocal failures. While owners must pay agreed fees, management companies cannot rely on the contract to demand penalties if they themselves fall short of service standards. The court’s decision to award the principal but deny penalties sends a clear signal: both sides must adhere to their contractual duties. Practical tip for readers: document all service requests and responses to support any claims of inadequate performance.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.