Real Estate Perspective | Legal Practice and Judicial Rules on the Ownership and Return of Public Benefits in Residential Communities (Part 2)
Published:
2025-08-01
This article further examines frequently encountered disputes in practice, building upon the previous article, "Legal Practice and Judicial Rules on the Ownership and Return of Public Benefits in Residential Communities (I)", which mainly addresses disputes concerning the determination of litigation entities, the amount of public benefits, and the determination of the amount of public benefits that should belong to all owners in disputes over the ownership and return of public benefits in residential communities.
I. Preface
In the previous article, "Legal Practice and Judicial Rules on the Ownership and Return of Community Public Benefits (I)", we mainly sorted out the disputes involved in litigation entities, the determination of the amount of public benefits, and how to determine the amount of public benefits that should belong to all owners in cases of disputes over the ownership and return of community public benefits. Based on this, this article further sorts out the frequently encountered related disputes in practice.
II. The Statute of Limitations for Cases of Claiming Community Public Benefits
1. Applicability of the Statute of Limitations
The mainstream view is that the statute of limitations applies to cases of claiming community public benefits. According to Article 188 of the Civil Code, the statute of limitations for lawsuits requesting the protection of civil rights from the people's court is three years. The statute of limitations is calculated from the date when the right holder knows or should have known that his or her rights have been infringed and the obligor. Ordinary statute of limitations 。
2. Commencement of the Statute of Limitations
(1) If the Owners' Committee is not established, it shall be calculated from the date of establishment of the Owners' Committee.
Case: Chongqing Municipal People's Court Civil Ruling on Retrial Application for Dispute over Ownership of Buildings and Separate Ownership of Buildings between Chongqing Certain Real Estate Development Co., Ltd. and Owners' Committee of Certain Area in Yubei District, Chongqing【(2020) Yu Min Shen 1654】
The court held that: The rental income involved in the case should be public benefits, and the disposal of public benefits is a major matter as stipulated in Article 76 of the Property Law of the People's Republic of China, and should be jointly decided by all owners. The Fengyuan Lijings Owners' Committee, which represents all owners in exercising their rights, was only established and registered on May 24, 2016, so the statute of limitations in this case should be calculated from the date of establishment of the Fengyuan Lijings Owners' Committee. From May 24, 2016, the date of establishment of the Fengyuan Lijings Owners' Committee, to November 1, 2018, when the Fengyuan Lijings Owners' Committee filed this lawsuit, it did not exceed the three-year statute of limitations.
(2) If the Owners' Committee is established, the statute of limitations should be calculated from the date when the Owners' Committee knows or should have known that its rights have been infringed. In practice, the following different situations are distinguished.
① From the date of termination of the property service contract or the date of withdrawal of the property service enterprise
Case: Nanchang Intermediate People's Court Civil Judgment on Retrial Review of Dispute over Property Service Contract between Owners' Committee of Certain Area in Honggu Beach New District, Nanchang and Certain Property Management Co., Ltd., Nanchang【(2024) Gan Min Zai 12】
The court held that: The retrial court held that the statute of limitations for public benefits should be calculated from the date of termination of the "Preliminary Property Management Service Agreement", namely January 30, 2019, therefore, the claim of the Owners' Committee for public benefits from 2006 to March 2022 did not exceed the statute of limitations.
Case: Chongqing Higher People's Court Civil Judgment on Second Instance of Dispute over Owners' Common Ownership between Certain Property Management Company, Chongqing and Owners' Committee of Certain Area, Chongqing【(2021) Yu 01 Min Zhong 4000】
The court held that: In this case, The property company withdrew from the community on January 23, 2017, and there is no evidence to prove that the two parties had settled or transferred the public benefits before that. Only when the property company withdrew from the community and did not transfer the public benefits did the Owners' Committee know or should have known that its rights were infringed, so the statute of limitations in this case should be calculated from January 23, 2017, and expired on January 23, 2020, and the Owners' Committee had already filed a lawsuit with the first-instance court on December 3, 2019, so the Owners' Committee's claim did not exceed the statute of limitations.
② Using the date of public announcement of the community's public benefits as the starting date of the statute of limitations
Case: Haikou Intermediate People's Court Civil Judgment on First Instance of Dispute over Property Service Contract between Owners' Committee of Certain Community in Qiongshan District, Haikou and Hainan Certain Property Service Co., Ltd.【(2024) Qiong 0107 Min Chu 7399】
The court held that: 2. **Statute of limitations issue**: XX Property Company did not announce the public benefits to all owners, and the XXX Owners' Committee first learned about the public benefits on November 14, 2022, so the statute of limitations should be calculated from that date, The plaintiff filed the lawsuit on August 26, 2024, which did not exceed the three-year statute of limitations.
III. Whether Public Repair Costs Can Be Deducted
Whether public repair costs can be deducted from community public benefits depends on whether the costs fall under the category of "reasonable costs", that is, whether they are necessary expenses for generating public benefits, and whether they have been approved through the owners' meeting or the owners' committee. If the property service enterprise fails to provide sufficient evidence to prove that its expenditure is a reasonable cost, or fails to follow the statutory procedures, it shall not be deducted from the public benefits.
Case: Shenzhen Intermediate People's Court Civil Judgment on Second Instance of Dispute over Property Service Contract between Dongbu Property Management Co., Ltd., Shenzhen and Fourth Owners' Committee of Baozhu Garden, Nanshan District, Shenzhen【(2021) Yue 03 Min Zhong 999】
The court held that: 2. The property company claimed that it spent 49,698 yuan on community repairs and claimed to offset the surplus funds in the public benefits account, but its evidence was insufficient to prove that the expenditure was actually made from the public benefits account, and the expenditure was not authorized by the owners' meeting or the owners' committee, which does not comply with the provisions of the Property Management Regulations on the use of public benefits, therefore, its claim for offsetting has no factual or legal basis.
Case: Nanjing Intermediate People's Court Civil Judgment on Second Instance of Dispute over Property Service Contract between Certain Property Management Co., Ltd., Nanjing and Owners' Committee of Xuanwu District, Nanjing【(2024) Su 01 Min Zhong 3503】
The court held that: In the absence of the consent of the Owners' Committee or the Owners' Meeting to deduct the expenses, the daily maintenance and repair of the community should belong to the scope of property services, and the relevant expenses have been included in the collected property fees, while the major repairs and special repairs of the property should be paid by the repair fund, and the repair fees do not belong to the investment for generating public benefits, therefore, the claim of Nanjing Certain Property Management Co., Ltd. to deduct the repair fees from the collected public income is not accepted.
IV. Conclusion
Combining the previous analysis and retrieved cases, property service enterprises should pay attention to internal compliance management and improve the legal risk awareness of their employees in their actual operations to avoid being in a passive situation in similar cases.
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