The Owners' Committee in China: A Non-Owner Owned Puppet?

• Author: Qu Difan
• Pages: 238-262

238 TSINGHUA CHINA LAW REVIEW [Vol. 8:237

THE OWNERS’ COMMITTEE IN CHINA: A NON-OWNER

OWNED PUPPET?

QU Difan

Abstract

The Owners’ Committee in China, ever since its creation in the late

21st century, has been unpopular and unknown to most private

property owners in China. Ideally, a well-functioning Owners’

Committee should benefit the property owners and serve to be the

entity acting in the best interests of the owners. How ever due to

political, cultural, as well as legal factors, the establishment of

Owners’ Committees in China has yet to become a typical practice,

and Owners’ Committees have yet to become entities that effectively

safeguard property owners’ interest. Th ere is scarce scholarly

research in both Chinese and English regarding how the law can

facilitate the formation and operation of the Owners’ Committees.

This Article utilizes previous research findings on this topic and

addresses various problems of the Owners’ Committee, and proposes

several solutions on how the reconstruction of the current legal

mechanism can facilitate a well-functioning Owner’s Committee in

China.

I. INTRODUCTION

Currently, the problem of private apartment and home owners

being unable to participate in the management of their living

environments has caused many problems in Mainland China. Many

private property owners in Mainland China are not satisfied with the

services provided by their designated realty management companies.

As early as 1998, the owners at Liwan Square in Guangzhou, a

luxurious apartment at that time, successfully initiated an election of

their Owners’ Committee. However, such a success was not without a

struggle, since the entire process was interfered by the realty

management companies and also by government officials whom the

owners believed to be sided with realty management companies.1 The

successful election of the Owners’ Committee is nevertheless another

step toward the self-autonomy of the property owners of their own

properties.

Theoretically, according to the Regulation on Realty

Management, 2 private property owners can form an ‘Owner’s

Committee’ which in turn should act in the best interest of the owners

by supervising the service quality of the realty management companies

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1 Benjamin L. Read, Democratizing the Neighbourhood? New Private Housing and Home-owner

Self-organization in Urban China, 49 CHINA J. 31, 31-32 (2003).

2 Wuye Guanli Tiaoli (物业管理条例) [Regulation on Realty Management] (promulgated by the St.

Council, Aug. 26, 2007, effective Oct. 1, 2007) (Chinalawinfo).

2016] OWNERS’ COMMITTEE IN CHINA 239

as well as acting on the owners’ behalf in dealing with with any

disputes that might arise between the owners and the realty

managements.3 In reality however, this mechanism often does not

prove to be useful, and the rights of the owners are often infringed

upon without any remedy. Such a phenomenon correlates with the

Chinese political culture in that the government often takes a dominant

approach towards civil matters and asserts control to almost every civil

activity.4 While such a problem might be particularly conspicuous in

a state like China in which the government is often overkeen in the

involvement of civil affairs, and thus impedes the development of self-

autonomy of organizations like the Owners’ Committee, similar

problems also exist in market oriented countries such as the U.S., only

in these regions, self-autonomous organizations perish not mainly

because of third party interference, but due to inadequate funding.5 As

a result, the emergence of Owners’ Committees to a certain degree is

a challenge to the existing political institutions.6 With the rising of

private property prices in China, more property owners are troubled

by this problem and are quite helpless about it. Expensive property

owners who have spent their lifetime savings on their property are

usually unhappy with ‘management arrangements that are imposed

upon them by developers and the state.’7

This Article addresses the issue by exploring ways to incentivize

the owners to form and maintain functional Owners’ Committees. The

private properties (shang pin fang) referred in this Article are

apartments, or flats, or a number of houses collectively developed by

a single developer. These properties are ‘horizontally’ subdivided as

well as ‘vertically’ subdivided, meaning that land titles are linked with

a part of defined space or ‘cubic area,’ and ‘which is not grounded on

the surface layer of the earth.’8 Such properties are governed by

Chapter VI of the Property Law of China 9 regarding ‘Owners’

Partitioned Ownership of Building Areas.’10

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3 See id. ch. 2.

4 See generally Kjeld Erik Brødsgaard, Politics and Business Group Formation in China: The Party

in Control? 211 CHINA Q. 624, 624-28 (2012) (arguing that the Chinese state controls the strategic sectors

as well as state-owned businesses in China); see also Andrew Szamosszegi & Cole Kyle, An Analysis of

State-owned Enterprises and State Capitalism in China, CAP. TRADE (Oct. 26, 2011),

http://www.uscc.gov/sites/default/files/Research/10_26_11_ CapitalTradeSOEStudy.pdf (summarizing

China’s large and broad state sectors).

5 Benjamin L. Read, Assessing Variation in Civil Society Organizations: China’s Homeown er

Associations in Comparative Perspective, 41 COMP. POL. STUD. 1240, 1244-45 (2008).

6 Read, supra note 1.

7 Id. at 33.

8 Alice Christudason, Subdivided Buildings–Developments in Australia, Singapore and England, 45

Int’l & Comp. L. Q. 343, 343-64 (1996).

9 Wuquan Fa (物权法) [Property Law] (promulgated by Nat’l People’s Cong., Mar. 16, 2007,

effective Oct. 1, 2007) ch. 6 (Chinalawinfo).

10 Id. ch. 5.