Wednesday, Mar 29, 2017, 7:09 PM CST – China

Society

China’s Homeowner Committees

Trouble at Home

Since their launch more than two decades ago, China’s homeowner committees have struggled to remain effective in the face of corruption, apathy and a legal vacuum, but, as self-governing organizations are rare in China, they are pushing to develop

Homeowners in a residential community in Xi’an, Shaanxi Province, present an “award” to their property management company that they have accused of neglecting its responsibilities, November 2011 Photo by CFP

Over 500 residents of the Xinghewan residential community in Guangzhou, Guangdong Province, protest their property management company’s unilateral decision to cancel shuttle bus services to downtown areas, December 8, 2012 Photo by IC

A homeowner meet-and-greet in the Yunzhuyuan residential community, Beijing Courtesy of Interviewee

The homeowner committee elected by the residents of Nanjing’s Yueya Lake Garden residential community had been dissatisfied with the quality of property management company Qixia’s service for more than half a year. The five-member committee hired a replacement company and set March 31, 2015, as the handover date, yet Qixia refused to go. On that day, Qixia brought in security guards as reinforcements in a confrontation that ended with a Yueya resident being scalded by a thrown hot water bottle. During the fierce conflict, many other homeowners felt reluctant to offend either side and maintained neutrality, making it more difficult to settle the dispute.

This incident embodies the current conundrum that surrounds China’s homeowner committees. Due to ineffective laws and a lack of experience, many homeowner committees find it hard to protect their rights and interests from property management companies, with some also struggling with poor reputations because of corruption and abuse of power. And as older members reach the end of their tenure, many committees find themselves on the brink of extinction due to a lack of successors.

However, given that homeowner committees are self-governing, something that is still a rare occurrence in China, homeowners are not expected to abandon this hard-to-come-by opportunity to manage their own communities. Many homeowners have begun to try new models to expand their autonomy and strengthen self-discipline, with experts also calling on the government to lend these committees more support, rather than interfere in their operations.

Establishment

Unlike homeowner associations in some foreign countries, Chinese committees are usually convened when conflicts between owners and property managers reach a boiling point. It is when homeowners are oppressed by a property management company that they form a committee to “struggle together,” said Shu Kexin, a homeowner committee expert who works with an NGO engaged in Chinese community affairs.

For example, China’s first homeowner committee was established 24 years ago because of a conflict over the price of electricity. Due to a mistake made during construction, the Vanke Tianjing Garden residential community in Shenzhen had to use a commercial transformer to supply residential power, only to find that some of the owners refused to pay the additional charges.

Worried about the increasing friction between the two sides, property management company director Chen Zhiping convened a homeowner committee to allow residents to negotiate more effectively. On March 22, 1991, the committee held its first meeting, which was attended by developers and representatives of the property management company. By the meeting’s end, the parties had agreed on a rate for the electricity and solved some other problems for the homeowners, such as installing more garbage cans and outdoor seating areas.

Several months later, the committee caught media attention once again by raising the monthly property management fee from 2 yuan (US$0.32) to 10 yuan (US$1.61) on the condition that the property company kept its promise to keep the area completely litter-free. Although the move was criticized as arbitrary by the local department in charge of pricing, it paved the way for other homeowners to get involved in the management of their own communities.

When Shenzhen was drafting its first local regulation on property management in 1994, Chen was invited to make suggestions. Eight years later, the Chinese government solicited public opinions on the national Property Management Regulation (PMR) and collected feedback from over 4,000 people in the first month, setting a milestone for Chinese public involvement in legislation. The national regulation took effect in 2007. That same year, China issued the Property Rights Law (PRL), further bolstering the autonomy of homeowner committees.

“The PRL has shifted the function of government departments [in regard to homeowner committees] from ‘supervision and guidance’ to ‘guidance and assistance,’” said Shu Kexin. “It means that homeowner committees have been defined as truly self-governing organizations.”

Difficulties

Despite the improved legal definition, Chinese homeowner committees did not see the rapid growth that experts had expected. They even suffered a decline in some cities.

According to data from Chen Fengshan, a private researcher of homeowner committees based in Beijing, only 10 percent of residential communities nationwide elected a homeowner committee. Official data from Beijing Municipal Commission of Housing and Urban-Rural Development showed that in 2013, only 26 percent of the city’s residential communities had set up homeowner committees, about 2 percent lower than the 2011 rate.

Many believe that a major reason behind the low rate is the difficulties homeowner committees face in protecting their rights and interests. Many committees have complained to the media that they always have to fight property management companies from a weaker position, despite the PMR and PRL.

For example, the Yueya Lake Garden homeowner committee had to ask the local government to help them expel property management company Qixia. Similarly, the Yunzhuyuan residential community in Beijing spent four years replacing their property management company, during which time several committee members were reportedly intimidated.

“It is ridiculous that the PMR states that the developer appoints the first property management company for homeowners,” private researcher Chen Fengshan told NewsChina. “It misleads the property management companies [into thinking] that they are right to stay in a community even if they fail to satisfy the homeowners.” According to Chen, many articles in both the PMR and the PRL remain ambiguous in regard to such things as the property rights of some public places and the punishments for property management companies that have damaged homeowners’ interests. These ambiguities make the laws harder to enforce.

According to Zhang Tao, director of the homeowner committee for Beijing’s Yunzhuyuan residential community, their former property management company left behind a litany of problems after being dismissed, including an illegally leased basement. In 2014, the homeowner committee sued the company for embezzling the profits earned from public areas in the community, which, according to Chinese law, should belong to all of the owners, only to see the trial thrown out for lack of evidence.

“How could we get the evidence, since all the invoices and certificates were in the hands of the [former] property management company?” Zhang said.

“The PRL states that the developers and the homeowners may negotiate for the property rights of some public places in the community, but in reality, homeowners have no bargaining chips when they talk with developers,” said researcher Chen Fengshan.

“The laws have acknowledged the homeowner committees, but in practice, their rights are often constrained or even eliminated,” he explained, adding that he is devoting himself to compiling a database of the struggles of Chinese homeowners as a future reference point for lawmakers.

The Homeowners

Shu Kexin, however, is concerned more about the problems created by the homeowners. He said he would be more likely to blame Chinese homeowners’ apathy toward self-governance for the low number of homeowner committees.

“In China’s several thousand years of history, Chinese people were used to joining together only in [times of] disaster, such as famine. Except for religious organizations, China has few self-governing organizations, leading many citizens to become accustomed to being governed,” he wrote in an article for NewsChina titled “The Silent Homeowners.”

Chen Fengshan shared this view. He told NewsChina that he had spent more than a year collecting enough signatures to establish a homeowner committee in his community. Many homeowners rolled their eyes at his promotional materials and even questioned whether he was aiming to benefit from them in some way. “Even young people are reluctant to bear some responsibility in a homeowner committee,” real estate giant Ren Zhiqiang once told the media.

“Chinese homeowner committees will always experience a process of rising and falling,” said Shu Kexin. “When a conflict is escalating, a homeowner committee will rise, and when the conflict subsides, it becomes harder to sustain the committee.” Committee director Zhang Tao told NewsChina that by next March, two committee members will be left in service, including himself, yet only two residents in his community have signed up to be future candidates.

More troubling is that some homeowners have conflicting interests, preventing them from forming a united front. Media discovered that the discord in Yueya Lake Garden extended to residents as well, with some of the homeowners helping the old property management company Qixia oppose the handover. According to media reports, some of them didn’t want to offend the old property staff members with whom they had good relationships, while others had personal stakes in the company – some of their relatives were Qixia employees.

Other Chinese homeowners simply feel like they’re not being heard. “Many of the residents in my community are elderly and what they care about is not what I care about,” said an anonymous residential community resident in Guangzhou to local media. “I sometimes feel that I [need to push] to be represented.”

Corruption is also a big obstacle. A local newspaper in Hubei Province recently exposed a series of corruption cases in local communities, including bribery during elections, colluding with property management companies for illegal profit, and embezzling public funds.

Government’s Role

Currently, most Chinese residential communities have contracted property management out to a professional company and the homeowner committee members work on a voluntary basis. Many experts believe that a better way to develop homeowner committees is to let them bear the cost and profit of property management, with the property management company serving as an employee. In such a way, the committees not only have more say on property matters, but they also can more easily control the finances involved in their operation.

This new model, however, cannot be realized without support from the government. Residential communities, for example, are not allowed to use the government-allocated fund for community repair and maintenance until it gets permission from their residents committee, a street-level department engaged in local governmental affairs, such as helping local police maintain community security, settling disputes among neighbors, and implementing family-planning policies.

However, many government departments still hold a suspicious attitude toward the self-governing homeowner committees. For example, the local residents committee strongly opposed Yunzhuyuan’s homeowner committee when its members first moved to replace their property company. According to homeowner committee director Zhang Tao, some officials even asked him to “think of his future if he insists on the replacement.” More recently, members of Yueliangwan residential community in Jiaxing, Zhejiang Province, told local media that their application to establish a homeowner committee has remained unanswered by the government for half a year.

According to Chen Youhong, a professor working with the Beijing-based NGO Governance & Community Institute, homeowner committees greatly depend on their surrounding political environment, which varies significantly throughout the country. Shanghai, for example, has a high rate of membership in homeowner committees (85 percent), but most of these committees were established by the local government. This has actually weakened the autonomy of homeowners, and failed to balance the powers of the government and the property management companies, according to Chen. On the other end of the spectrum, Jiangsu Province’s provincial government has given local homeowners more space by proposing a new concept of “homeowner representatives” who are empowered to manage the community with relevant government departments if their community is otherwise ineligible for the establishment of a homeowner committee.

“The ultimate objective of a harmonious community is to realize smooth interaction between the homeowners, the property management companies and the government,” said Chen.

“As current laws have far from resolved the problem, the three sides must jointly work out [rules] for better running the community… The government and the homeowner committees actually complement and complete each other... [and] it is time for the government to make room for the homeowner committees,” he continued.

It does not mean that the government should not do anything in the development of homeowner committees. On the contrary, all the experts interviewed said that the government should give more support to help them develop.

“The homeowners committees and the [government-backed] residents committees should work as two colleagues at the same level,” Zhang Tao told NewsChina. “My experience proves that both sides need cooperation in many fields.”

As a homeowner committee researcher, Chen Fengshan is often invited by government departments to give lectures on property management. When some people questioned if he was suborned by the government, he replied that better communication with the government helps the struggle for homeowners’ rights and interests.

“In addition to more detailed legislation, the government could take measures to enhance public awareness [of self-governance] and offer some technical guidance,” suggested Shu Kexin.

“Everybody knows that a bunch of chopsticks is much harder to break than a single one, but the chopsticks will not gather together without external force,” he added. “The government is one such force. The more support the government gives, the better a homeowner committee runs. A sustainable homeowner committee will in turn alleviate the government’s burden. It is a win-win situation.”

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