Real Estate Perspective | Legal Practice and Judicial Rules on the Ownership and Return of Public Benefits in Residential Communities (Part 1)
Published:
2025-07-24
In recent years, disputes over community public benefits have gradually become a hot issue in the field of property management. This article sorts out and discusses the legal and practical issues involved in the ownership and return of community public benefits, providing a reference for property service enterprises in handling disputes over public benefits.
I. Preface
In recent years, disputes over community public benefits have gradually become a hot issue in the field of property management. This article will sort out and discuss the legal and practical issues involved in the ownership and return of community public benefits, providing a reference for property service enterprises in handling public benefit disputes.
II. Ownership of Community Public Benefits
According to Article 282 of the Civil Code, the income generated by the construction unit, property service enterprise, or other management personnel using the common parts of the owners, after deducting reasonable costs, belongs to the owners in common. “Public benefits” are derived from the “income” in this provision, and usually include advertising fees generated from the use of common areas such as corridors, elevators, and rooftops; parking fees generated from the use of public spaces and public roads site usage fees ; rental income generated from setting up stalls in public areas, and other income generated from operating using common parts. The “income” thus generated belongs to all the owners of the community.
III. Return of Community Public Benefits
1. Litigation Subject for Claiming Community Public Benefits
(1) Owners' Committee
According to Article 277 of the Civil Code, owners can establish an owners' meeting and elect an owners' committee. The specific conditions and procedures for the establishment of the owners' meeting and owners' committee shall be in accordance with the provisions of laws and regulations. According to Article 15 of the Property Management Regulations, the owners' committee shall implement the decisions of the owners' meeting. In practice, the owners' committee is mostly the subject of lawsuits for claiming community public benefits.
Whether a single owner can file a lawsuit on this issue has different views in practice: Some courts believe that, according to Article 282 of the Civil Code, the income generated by the property service enterprise using the common parts of the owners, after deducting reasonable costs, belongs to the owners in common, and should be claimed by the owners' meeting or owners' committee on behalf of all owners, and a single owner has no right to directly request the property service enterprise to return the income (Case No. 2025川16民终39).
Other courts believe that the income generated by the construction unit, property service enterprise, or other management personnel using the common parts of the owners, after deducting reasonable costs, belongs to the owners in common. In this case, the xxx Owners' Association of Nankai District, Tianjin and the defendant signed the "Tianjin Residential Property Service Contract", which is the true expression of the intentions of both parties, does not violate the mandatory provisions of laws and regulations, and is legally valid. Both parties should perform their contractual obligations in accordance with the contract. The "Management Regulations of xxx, Nankai District, Tianjin" clearly states that "public benefits are accumulated and settled annually, and the balance is returned to the owners according to their corresponding area and the return amount per unit area." Li Moumou's claim that Moumou Property should return the surplus public benefits to him according to the building area of his house and garage has factual and legal basis (2023津0104民初16805).
The difference lies in whether the community has made a clear agreement on the distribution of public benefits to individual owners. If so, the owner can file a lawsuit for their individual share. The mainstream view still tends to believe that the owners' committee should be the subject of the lawsuit for claiming public benefits.
(2) Temporary Property Management Committee
There is no unified higher-level law provision on the temporary property management committee, which is scattered in various local regulations, such as the "Jinan Property Management Regulations", "Guangzhou Property Management Regulations", and "Guangxi Zhuang Autonomous Region Property Management Regulations", etc. This article takes the "Jinan Property Management Regulations" as an example. According to Article 42 of the "Jinan Property Management Regulations", in any of the following circumstances, the street office or town people's government of the location shall promptly establish a temporary property management committee: (1) Meeting the conditions for establishing an owners' meeting, but failing to elect an owners' committee after twice organizing the owners' meeting; (2) The owners' committee needs to be re-elected due to the expiration of its term, vacancy of members, dismissal, etc., but a new owners' committee cannot be elected after twice being organized and guided by the street office or town people's government. A temporary property management committee shall be established within three months from the date of the occurrence of the circumstances stipulated in the preceding paragraph.
In addition, in conjunction with Article 3 of the "Guiding Opinions on Establishing Property Management Offices and Environmental and Property Management Committees" (Jifangguan Zi [2019] No. 2) issued by the Jinan Housing Security and Real Estate Administration Bureau, the community residential (village) committee sets up an environmental and property management committee, which, for communities that do not meet the conditions for establishing an owners' committee, or where the owners' committee cannot perform its duties normally, performs the duties of the owners' committee on behalf of the owners, and is responsible for supervising the publicity and income and expenditure of the public benefits of the residential community.
Therefore, in communities that do not meet the conditions for establishing an owners' committee, or where the owners' committee cannot perform its duties normally, the temporary property management committee can also be the subject of the lawsuit for claiming public benefits.
2. Determination of the Amount of Public Benefits
(1) According to the publicized information or the reconciliation of both parties
According to Article 943 of the Civil Code, the property service provider shall regularly disclose to the owners, and report to the owners' meeting and owners' committee, in a reasonable manner, matters of service, personnel in charge, quality requirements, charging items, charging standards, performance, as well as the use of repair funds, and the operation and income of the common parts of the owners.
According to Article 55 of the Jinan Property Management Regulations, the property service provider shall set up a public notice board in the property service area, truthfully publicize and promptly update the following information, and inform the owners through the Internet and other means: ... (4) The collection situation of property service fees, the use of entrusted residential special repair funds, and the operation and income of the common parts of the owners.
Property service enterprises have the obligation to publicize the amount of public benefits. If the owners' committee does not raise objections to the relevant content during the publicity period, it can be used as the basis for determining the amount of public benefits. For example, in case (2023) Xiang 01 Min Zhong 17362, the court believed that "the "Publicity of Changsha County Property Public Benefits and Use" publicized by the appellee clearly states that the total amount of public benefits is 92,765 yuan, and no objection was raised to the relevant facts, which should be regarded as an admission of the facts." In addition, if the property service enterprise and the owners' committee have already reconciled and confirmed the amount of public benefits, the reconciliation result is legally binding on both parties. For example, in case (2024) Shaanxi 0112 Min Chu 3127, the court believed that "although the plaintiff owners' committee claimed that the amount of public benefits was 906,896 yuan, it failed to provide sufficient evidence to prove the actual income, rental standards, and occupancy rate of parking spaces, so the court determined the public benefits to be 159,100 yuan based on the "External Liaison Details Table" confirmed by both parties and reasonable costs, and after deducting 20% of the reasonable costs, the defendant company should return 127,280 yuan."
(2) Evidence Provided by the Owners' Committee
In cases where there is no publicity or reconciliation, according to the principle of "whoever alleges, whoever proves", the owners' committee bears the burden of proof for proving the relevant amount of public benefits. For example, in (2023) Xiang 01 Min Zhong 17362, the court believed that "the appellant claims to return 92,765 yuan of public benefits, and should provide evidence to prove the relevant income; the appellee's defense of deducting management costs and repair fees should also provide evidence to prove the relevant expenses."
(3) Judicial Audit
When the existing evidence is insufficient to fully prove the amount of public benefits, the court will generally require the Owners' Committee to apply for a judicial audit of the amount of public benefits in accordance with the law. Once a judicial audit is applied for, the audit results are binding on both parties, and the court generally uses the audit results as the basis for determining the amount of public benefits. For example, in case (2024) Su01 Min Zhong 2022, the court adopted the calculation results verified by the audit institution based on the bidding announcement and on-site verification, and determined the net surplus of public benefits to be 1,146,355.17 yuan.
(4) Court Discretion
This situation is relatively rare in practice. The basis for the court's discretion is based on the evidence presented by both parties, and the amount of public benefits is determined according to the corresponding evidence. For example, in case (2023) Yue 0604 Min Chu 10038, the court held that "2. Regarding the amount of public benefits, the plaintiff claims 1 million yuan, and the defendant objects to the amount of some items. The court, combining the evidence submitted by both parties and the burden of proof, confirms the total amount of public benefits to be 848,638.40 yuan."
3. Determination of the amount of public benefits belonging to all owners
(1) If there is an agreement, follow the agreement
If the "Property Service Contract" stipulates the proportion of public benefits sharing, it shall be handled in accordance with the contract agreement, that is, the operating and management fees collected by the property service enterprise shall be determined according to the proportion stipulated in the contract, and the remaining public benefits shall belong to all owners. However, some local regulations restrict the deduction ratio. For example, Article 73, Paragraph 2 of the "Jinan Municipal Property Management Regulations" stipulates that from the date of delivery of the first phase of the property to the establishment of the Owners' Committee, if the common areas of the owners are used for business operations, the construction unit and the property service provider shall organize the owners to make a joint decision in accordance with the law before implementation. The income generated from the operation of the owners' common areas, after deducting reasonable costs, belongs to the owners' common property, and the deduction ratio shall not exceed 30% of the public income. Therefore, the operating and management fees of property service enterprises in Jinan area stipulated in the "Property Service Contract" shall not exceed this proportion.
(2) No agreement, deduct reasonable costs
According to Article 282 of the Civil Code, the income generated by the construction unit, property service enterprise, or other management personnel using the common parts of the owners, after deducting reasonable costs, belongs to the owners in common. In practice, the property service enterprise generally bears the burden of proof for "reasonable costs", and the court will also determine a certain proportion to be included in the management costs of the property service enterprise, which is usually between 20%-30%. For example, in case (2023) Xiang 01 Min Zhong 17362, the court deducted 30% of the public benefits as management costs, and the remaining 70% was returned to the Owners' Committee; in case (2024) Yue 18 Min Zhong 5094, the court determined 20% of the public benefits as reasonable costs, and the remaining 80% belonged to all owners.
IV. Lawyer's Suggestions
In the current prominent disputes over public benefits, based on the above analysis and retrieval, this article provides the following suggestions for property service enterprises:
1. Effectively fulfill the obligation of regular public announcement, regularly publicize the situation of the community's public benefits, and fix the corresponding evidence for the publicized situation. The financial department shall also establish detailed income and expenditure accounts for later inquiries and reference.
2. For public expenditures, necessary democratic decision-making procedures shall be followed according to the corresponding expenditure situation to ensure procedural compliance.
3. When signing the property service contract, clearly stipulate the deduction ratio of public benefits to avoid disputes over the settlement method of public benefits allocation in the future.
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