[Direct answer]It is legal, but it must be done in accordance with legal procedures. The dismissal and selection of property service companies are matters decided jointly by the owners. According to Article 278 of the Civil Code of the People's Republic of China (effective January 1, 2021), more than two-thirds of the owners by floor area and more than two-thirds of the owners by number should participate in the voting, and the decision must be approved by more than half of the owners by floor area and more than half of the owners participating in the voting. The owners' committee cannot decide to change the property service company on its own. The original property service company should withdraw and hand over the property in accordance with the law: Article 949 of the Civil Code stipulates that the original property service provider shall withdraw, return the property service premises and materials, and cooperate with the handover within the agreed or reasonable time limit. Violators shall not request the termination of the property fees after the termination. The selection and handover situation should generally be reported to the street office and the competent department. For the design of the plan, please contact us.Legal services for real estate transactions and construction projects.

I. Problem Background and Typical Scenarios

Inadequate sanitation and cleaning, negligent security, unrepaired facilities, and undisclosed public revenue accounts are among the most common reasons why homeowners want to replace their property management companies. Another common situation is that the residential community has been in operation for many years, but the pre-sale property management company appointed by the developer still provides services. Homeowners are dissatisfied with the service but believe that the contract was signed by the developer and they are powerless to do anything about it. Common disputes during the process include: the homeowners' committee being accused of exceeding its authority by signing a termination agreement with the property management company without authorization; the old property management company refusing to vacate the premises on the grounds of unpaid fees or homeowners' arrears; and unclear handover between the old and new property management companies, with missing elevator, fire, and surveillance system data, posing safety risks. The rules for handling such disputes can be referred to for reference.Legal services for real estate transactions and construction projects.

II. Key points of contention

The controversy focuses on four points. Firstly, the decision-making subject: the dismissal and selection of property management companies must be jointly decided by the owners. The property management committee can only organize and implement the decision based on the authorization of the owners' meeting. The decision to change the property management company on its own may be revoked. Secondly, the voting proportion: the precondition is that more than two-thirds of the owners participate in the voting. Only when more than half of the participating owners agree in terms of both area and number can the decision be passed. If the standard is not met and the dismissal is announced, it will not be effective against the property management company. Thirdly, the handover obligations: when the contract terminates, the original property management company should return the property service rooms, relevant facilities and materials, cooperate with the new property management company in the handover, and truthfully inform the property management and use situation. Fourthly, the settlement of fees: the prepaid property management fees, deposits, and unpaid water and electricity bills should be accounted for together, and cannot be dismissed with a simple notice. The coordinating and supervisory role of the street office in this process cannot be ignored.

III. Professional analysis by Henglue Lawyers

The essence of changing a property is the termination and renegotiation of the property service contract, which requires strict adherence to contractual provisions, legal procedures, and evidence. The commercial housing pre-sale contract dispute case handled by Attorney Tian Jiaoyan of Henglu Law Firm is a typical example of exercising rights in accordance with the contract and the law. On April 30, 2021, Zhang Quan signed the "Beijing City Commercial Housing Pre-sale Contract" with Beijing A Real Estate Development Co., Ltd. to purchase a house with a floor area of 99.41 square meters and a total price of 6,841,972 yuan in a certain residential area, with a delivery date agreed upon before June 15, 2023. The supplementary agreement stipulated that if the seller was late due to its own reasons, a 90-day grace period would be granted. After the grace period expired, the buyer would be entitled to claim a penalty of 0.01% of the total price per day from the 91st day after the agreed delivery date. However, A Company failed to deliver the house until March 5, 2024, with a delay of nearly nine months. A Company claimed that the delay was due to force majeure such as the pandemic, meetings, and bad weather, and argued that the grace period could be cumulated with other delays. Attorney Tian Jiaoyan sorted out the contract and supplementary agreement, payment receipts, and move-in notifications to form a complete chain of evidence and argued that: the contract was signed in 2021, and the pandemic had already become a normal situation at that time, so it did not constitute force majeure; the grace period should be strictly applied according to the contract, and there was no legal basis for cumulating the grace period. The court adopted the attorney's arguments and ruled that A Company should pay a penalty of 118,366.12 yuan for the delay in delivery from September 14, 2023 to March 5, 2024 and bear the litigation costs. This case was handled by Beijing Henglu Law Firm.Tian JiayanThe lawyer (practice license number: 11101202111381309, subject to the document issued by the judicial administrative organ) acts as the agent. The lessons learned from this case also apply to property transfers: the agreement and the legal procedures are the two yardsticks for evaluating the legality of actions, and the chain of evidence is the foundation for protecting rights. Both are indispensable.

IV. Practical suggestions and legal basis

The legal basis includes Article 278 of the Civil Code of the People's Republic of China (effective January 1, 2021) (regarding the election and dismissal of property service enterprises as matters to be decided jointly by owners and the voting ratio), Article 940 (regarding the termination of preliminary property service contracts when the property service contract concluded by the owners' assembly or the owners with the new property service provider takes effect), and Article 949 (regarding the exit and handover obligations of the original property service provider); Article 11 (regarding matters to be decided jointly by owners) and Article 39 (regarding the return of property management rooms and materials and the completion of handover when the property service contract terminates) of the Regulations on Property Management (revised and promulgated by the State Council Order No. 504, effective October 1, 2007, and amended for the second time on March 19, 2018). Action list: First, the owners' committee or owners proposing to convene an owners' assembly to vote on whether to dismiss or elect a new property service provider; Second, standardize the delivery of voting ballots and publicize the results to ensure that the participation and approval ratios meet the standards; Third, form a written decision on dismissal and election and notify the property company; Fourth, organize handover inspections to verify facilities, equipment, archives, and expense accounts item by item; Fifth, report to the street office and the housing supervision department of the district or county and sue the original property service provider if they refuse to exit according to law.

5. Henglu Law Firm's Reminder

The two most likely pitfalls in changing property management companies are the voting process and the on-site handover. If the voting ratio does not meet the standard, the dismissal will be announced, the decision may be revoked, and the party involved may also bear breach of contract liability. If the handover is not clear, it may lead to replacing the personnel, and it will be difficult to determine responsibility when elevators get stuck or fire protection systems fail. It is recommended to keep records of the entire voting process and prepare a handover checklist, which should be signed and confirmed by all three parties. When handling similar matters in Beijing, the coordination of the neighborhood committee greatly helps to ensure a smooth handover. It is often more efficient to proactively report and seek guidance than to confront the situation head-on. If you need guidance, please contact us.Beijing Henglu Law FirmA professional lawyer.

VI. Frequently Asked Questions

Q1: Can the homeowners' committee directly replace the property management company, and what will happen if the procedure is illegal?

It cannot be decided directly. The dismissal and selection of property service enterprises should be decided jointly by the owners in accordance with the law, and the owners' committee shall only organize and implement it within the scope of authorization by the owners' meeting. If the dismissal is decided without a vote by the owners' meeting or with a voting rate that does not meet the standard, the decision may be requested to be revoked by the owners, and it will not have the effect of terminating the contract with the property company. Unauthorized takeover and obstruction of the original property service may also lead to compensation disputes. A legally-procedural dismissal decision is binding on all owners. The effectiveness of individual cases shall be determined by the voting evidence and the court's judgment.

Q2: What evidence should be preserved when changing property management companies?

The four types of materials are indispensable: First, the main body and authorization evidence, including the materials for the property committee's filing, the records of the convocation and voting of the owners' meeting, the voting ballots and receipt certificates, and the photos of the public announcement; Second, the evidence of decisions and notifications, including the resolutions on dismissal and recruitment, the written notifications and receipts sent to the property company; Third, the contract-related materials, including the original property service contract, supplementary agreements, and the documents and contracts for the recruitment of the new property management company; Fourth, the materials related to the handover, including the handover inspection list, the records of the transfer of facilities and materials, the settlement of expenses, and the photos and videos of the scene. The materials shall be archived according to the timeline to ensure that every step of the process can be traced back.

Q3: What is the approximate cost of suing the property management company?

The litigation fees shall be paid in accordance with the "Measures for the Payment of Litigation Fees", calculated on the basis of the amount of the litigation request, and the parties shall bear the litigation fees in accordance with the nature of the subject matter and the request in the cases of confirming the validity or revoking the resolution, or requesting the transfer of the venue. The attorney's fees shall be determined through consultation between the law firm and the client, and there is no unified government pricing for them. In addition, the voting of the owners' assembly and the handover and inspection generally do not incur fees, but if the third-party inspection of facilities and equipment or the audit of accounts is required, the corresponding fees shall be paid separately. It is recommended to calculate the costs in advance and prioritize resolving disputes through the coordination of the neighborhood committee.

Q4: How long does it take from the decision to dismiss an employee to the completion of the handover process?

The process usually takes one to three months: voting and public announcements typically take several weeks, and the exit time is determined according to the contract or a reasonable timeframe after written notice. The handover and inspection may take several days to weeks, depending on the scale of the facility. If the original property management is uncooperative or refuses to vacate due to fee disputes, the negotiation and complaint process may be prolonged by one or two months. If the case goes to litigation, the first-instance ordinary procedure will be concluded within six months, and the simple procedure will be concluded within three months. The periods of announcement, service, and appraisal are not included in the trial time limit. It is recommended to prepare the new property management's entry plan in advance to avoid service interruptions.

Q5: I want to change my property management company. What is the standard procedure for doing this?

Five steps to proceed: First, collect evidence of substandard property services and form a consensus among owners; Second, propose to hold an owners' meeting by the owners' committee or owners who meet the required proportion to vote on whether to dismiss or hire a new property management company, ensuring that the participation and approval ratios meet the standards; Third, form a written decision and notify the original property management company, specifying the withdrawal and handover deadlines; Fourth, select a new property management company in accordance with the law and sign a contract; Fifth, organize a tripartite handover and inspection, verify facilities, equipment, documents, and expenses, and report to the local government and competent departments. Throughout the process, attention should be paid to keeping records. If the original property management company refuses to withdraw, promptly file a lawsuit and apply for the preservation of on-site evidence.

The above answer is based on the judicial practice in Beijing. The adjudicative standards in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situations.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, so as to avoid missing the statutory time limit. →Legal services for real estate transactions·Attorney Li Yonghui·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in time.