[Direct answer]In principle, it belongs to all owners. According to Article 282 of the Civil Code of the People's Republic of China, the income generated by the use of the owners' common parts by the construction units, property service enterprises, etc. shall, after deducting reasonable costs, belong to the owners. Article 274 clearly stipulates that the roads, green spaces, other public places, public facilities and property service rooms within the building areas shall belong to the owners. The property company can only obtain reasonable management costs or a certain percentage of returns in accordance with the contract or legal provisions, and the rest shall be mainly used to supplement the special maintenance funds or used in accordance with the owners' joint decision.

I. Problem background and typical scenarios

There has long been a phenomenon of "the property management company keeping the profits for itself and the owners being unaware of it" with regard to public income such as elevator and external wall advertisements, public parking fees, express delivery lockers, and venue rental fees, as well as the income from clubhouse operations. Typical disputes include: the property management company keeping the profits for itself and refusing to disclose the accounts; owners wanting to know how much they can share and whether they can check the accounts; the property management company refusing to hand over the historical profits when transferring the property; and whether the owners' meeting can decide to use the profits to offset the property management fees. You can first learn about it.Real estate sales and construction project services.

II. Key points of dispute

The focus of the dispute lies in four aspects. Firstly, the definition of the scope of income, which includes the income generated from the common areas. Secondly, the deduction of reasonable costs, and whether the costs claimed by the property owner are genuine and necessary. Thirdly, the distribution ratio, and how the income is distributed between the owners and the property management company in the absence of special agreements. Fourthly, the disclosure of accounts and the return of funds. Can the property management committee request to review the audit and recover the historical income? If the property management company conceals the income or refuses to hand it over, relevant legal measures can be taken against it.Creditor-debtor relations and enforcement case servicesConsider litigation and enforcement.

III. Professional analysis by Henglue Lawyers

In practice, the key factors in public income disputes are "evidence and the subject of the dispute". The owners should first request the property management company to disclose the operating contracts, income and expenditure accounts, and original receipts through the homeowners' committee or owner representatives, and commission an audit if necessary. For those who refuse to disclose the information, the owners can apply for an investigation order in the lawsuit to obtain the operating and transaction data. In principle, the income belongs to all owners, and the property management company can claim reasonable costs according to law, but it must provide receipts and cannot use the general defense of "already used for management". As for the litigation subject, it is usually represented by the homeowners' committee on behalf of all owners. Where the homeowners' committee has not been established, the owners can jointly safeguard their rights according to law. The case law generally recognizes the principle that "net income is obtained by subtracting reasonable expenses from income, and the owners and the property management company shall distribute it according to the agreement or a reasonable proportion". Relevant disputes over joint ownership can be referred to for reference.Special services and other case-related services.

IV. Practical suggestions and legal basis

The legal basis is Article 271 of the Civil Code of the People's Republic of China (effective January 1, 2021) (owners' right to joint ownership and joint management of common parts), Article 274 (definition of common parts), and Article 282 (attribution of income from common parts); the provisions on property disclosure and transfer in the Property Management Regulations (amended on March 19, 2018); and the provisions on the use of public income in local property management regulations. Practical suggestions: First, promote the establishment of homeowners' committees and clarify the main claimants; Second, require property management companies to regularly disclose income accounts and retain original vouchers; Third, agree on the distribution ratio and prioritize replenishing special maintenance funds; Fourth, promptly initiate litigation and apply for property preservation against those who refuse to transfer; Fifth, conduct audits and fix evidence to quantify the amount to be returned. Owners' joint decision-making matters can be approved simultaneouslyBeijing Henglue Law FirmOrganize and sort out the things.

5. Henglu Law Firm's Reminder

Public income is not the "private money of the property", but owners also need to assert their rights in an organized manner. Account transparency is the first step, audit quantification is the second step, and litigation recovery is the third step. When there is no agreement on the distribution ratio, the court usually determines it based on the management input of the property and the principle of fairness, and owners should not simply demand full compensation. Attention should be paid to the statute of limitations, and the income that has been embezzled over the years should be claimed as soon as possible. If it involves the renovation of common areas or the use of income, it should also be decided by the owners jointly in accordance with the law.

VI. Frequently Asked Questions

Q1: Can owners actually share in the public income of the residential community?

This can be claimed. According to Article 282 of the Civil Code, the income generated from the use of the owners' common areas, after deducting reasonable costs, belongs to the owners and they have the right to enjoy the benefits. How to use the income specifically shall be decided by the owners collectively, and it is usually used to supplement the special maintenance funds first. The property management company may only obtain reasonable costs or a certain percentage of returns within the scope of the contract or the law, and the rest shall belong to the owners.

Q2: What evidence do I need to prepare to recover public revenue?

Suggested preparations: property service contracts and pre-property contracts; operating contracts and settlement vouchers for elevator advertisements, venue leasing, parking fees, etc.; property income and expenditure accounts and publicity materials; materials for the establishment and authorization of the homeowners' committee; and a property handover list. If necessary, commission an audit agency to verify the data, or apply for an investigation order to retrieve the operating data in litigation. The more complete the evidence is, the more justified the quantification and distribution of net income will be.

Q3: What are the approximate litigation and attorney fees for such disputes?

The litigation fees shall be paid in accordance with the "Measures for the Payment of Litigation Fees" (effective from April 1, 2007), and shall be charged based on the proportion of the amount of the refund, to be borne by the losing party or shared proportionally. The attorney's fees shall be determined based on the proportion of the subject matter or negotiated on an hourly basis, subject to the written power of attorney. For cases with a large subject matter, the terms may also be agreed upon with the law firm. If an audit is commissioned, audit fees will also be incurred. It is recommended to budget in advance and assess whether the total benefits are worth pursuing.

Q4: How long does it typically take from filing a lawsuit to recovering the proceeds?

Cases applying the simplified procedure are usually concluded within three months, while those applying the ordinary procedure generally take six months. Cases involving audits, appraisals, or large amounts of money may take longer. If either party appeals, the second-instance trial usually takes about three months. After the judgment takes effect, if the other party refuses to perform the obligation, the party concerned may apply for enforcement, and the enforcement period is related to the situation of property investigation and control. If the property management committee sues, it may apply for preliminary preservation of the property to improve the efficiency of recovering the payment.

Q5: If I discover that public benefits have been embezzled, what should I do specifically now?

It is recommended to proceed in four steps: First, establish the main body and promote the establishment of or have the owners' representatives assert their rights; Second, require public disclosure and request the property management company to disclose the operating contracts, income and expenditure accounts, and supporting documents in writing; Third, verify and quantify the data and entrust an audit to clarify the net income over the years; Fourth, pursue legal action. If no agreement can be reached through negotiation, file a lawsuit and apply for preservation of evidence. At the same time, complaints can be lodged with the competent authorities about the property management company's violations of regulations.

This article is written based on the common judicial interpretation in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

VII. Related public cases (for reference, not handled by our firm)

The following cases are all sourced from the official websites of courts at all levels, judicial authorities, and authoritative media, and are not related to the cases handled by our firm. They are provided solely for reference in understanding relevant adjudication rules and do not constitute opinions on specific cases.

[Case No.]The case number has not been made public.
[Trial Court]People's Court of Xishan District, Wuxi City, Jiangsu Province (First Instance)
[Judicial Summary]In the case of the property management dispute between the Spring River Garden Homeowners' Committee and Shanghai Lujiazui Property Management Co., Ltd., etc., the income generated from the common areas of the residential community during the property service period, unless there are special provisions, shall belong to all owners and be mainly used to supplement the special maintenance funds. If the property management company conducts business management, it may enjoy a reasonable proportion of the income. The court awarded 70% of the net income of over 4.14 million yuan from the common areas from 2004 to 2007 to the owners, and 30% as the management return of the property.
[Source]The Bulletin of the Supreme People's Court, No. 5 (2010)

[Case Number]The case number has not been made public.
[Trial Court]The People's Court of Runzhou District, Zhenjiang City, Jiangsu Province
[Judicial Summary]The homeowners' committee of a certain residential community sued the original property management company to return public revenues such as parking fees and advertising fees. According to Article 282 of the Civil Code, the income generated from the owners' common areas belongs to the owners after deducting reasonable costs. The court found that the property management company used the public spaces and facilities to operate for profit, deducted reasonable costs, and ordered the property management company to return more than 300,000 yuan of public revenues such as parking fees and advertising fees to the homeowners' committee.
[Source]China Court Online, 2023-03（2023-03）

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 to avoid missing the statutory time limit. →Legal services for real estate transactions·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.