A homeowner in Hainan refused to pay over 19,000 yuan in property management fees and shared utility charges for three years, citing significant service deficiencies. The property company sued to recover the fees, while the homeowner counter-sued for 6,200 yuan in water leak damage. The court has now issued its ruling.

The homeowner, surnamed Mo, owns a property with an area of 131.47 square meters in a Haikou residential complex. In November 2021, Mo signed a preliminary property service agreement with the local branch of a Hainan-based property management company. The agreement stipulated a fee of 3.8 yuan per square meter per month, payable by the 5th of each month, with a late payment penalty of 0.05% per day. Starting from May 2022, Mo ceased payment of the property fees and shared water and electricity costs.

Despite repeated reminders via text message, online platforms, phone calls, and legal letters from the property company, the fees remained unpaid. By May 31, 2025, the total outstanding amount had accumulated to over 19,000 yuan. The property company subsequently filed a lawsuit with the Longhua District People's Court in Haikou, seeking payment of the overdue fees plus a penalty of 5,216.73 yuan.

In his defense and counterclaim, Mo argued that the property services were severely deficient. He cited issues such as severely rusted public fitness equipment, frequent elevator malfunctions, unverified fire safety equipment, and untimely garbage collection. Furthermore, Mo claimed his apartment suffered water damage from an upstairs leak in July 2022 and again in February 2024, costing 6,200 yuan in repairs, which the property company failed to resolve properly. Mo contended that the property company was in breach of contract, thus he should not be liable for the fees, and he counter-sued for compensation of the 6,200 yuan in damages.

Court's Decision on Fees and Penalty

The Longhua District Court found the service agreement to be legally valid. It ruled that property services are public, holistic, and continuous in nature, and therefore an owner cannot refuse to pay fees based on service deficiencies at a specific point in time or in a particular area. The court held that the evidence provided by Mo, including photos and chat records, was insufficient to prove that the property company's service flaws were so significant as to severely impact the normal life of residents.

The judgment stated that dissatisfied owners have legal avenues for recourse, such as requesting the property company to continue履行ing its duties, take remedial measures, or pay compensation. They can also file complaints with relevant administrative departments or initiate the legal process to dismiss the property company through a homeowners' meeting. However, refusing to pay fees is not an acceptable form of维权.

Regarding the penalty, the court acknowledged the contractual clause but noted that the property company's services indeed had room for improvement. It also found that Mo's refusal to pay was not due to恶意拖欠 but stemmed from disputes over service quality and the water leak. Imposing a penalty, the court reasoned, would not help resolve the conflict or benefit the community's development, and thus it was not supported.

Ruling on Water Damage Claim

Concerning the water damage, the court determined that for the 2022 incident, the property company had promptly dispatched personnel and actively coordinated with the construction unit, fulfilling its reasonable management and service obligations. Therefore, liability for the leak damage should fall on the relevant responsible party, such as the upstairs owner or the developer, not the property management company. For the 2024 leak, since the upstairs unit had already been delivered to its owner, Mo was advised to file a separate lawsuit.

The first-instance court ordered Mo to pay the full amount of over 19,000 yuan in property fees and shared utility charges, while dismissing all other claims from both parties. Both Mo and the property company appealed the decision to the Haikou Intermediate People's Court.

The intermediate court upheld the original verdict. It affirmed that while the property services had瑕疵, they did not constitute a fundamental breach of contract. It emphasized that property fees are essential for the normal operation of a community, and allowing individual owners to withhold payment based on personal perceptions would harm the interests of all residents. The court agreed that the penalty calculation standard was明显过高 and that Mo's non-payment was not恶意, thus supporting the lower court's decision to waive the penalty. It reiterated that the water damage claim was a matter of侵权纠纷 to be pursued separately. The final judgment was issued on June 4.

Legal Perspective on Fee Payment Obligations

A legal expert explained that according to China's Civil Code, owners are obligated to pay property fees as agreed, provided the property manager has delivered services in accordance with the agreement and relevant regulations. Owners cannot refuse payment on grounds of not having received or not needing the services.

The expert highlighted the public and continuous nature of property services, with fees funding the maintenance of公共设施, sanitation, and security. Withholding fees over specific, localized service issues could lead to underfunding for the property company, ultimately degrading service levels for everyone.

For significant service issues, owners are advised to use proper legal channels: demanding the property company fulfill its duties or provide compensation; filing complaints with government authorities for penalties or corrective orders; or initiating the legal process to replace the property company via a homeowners' meeting.

In this case, the court's refusal to support the penalty was based on three key factors: the excessively high contractual penalty rate; the homeowner's non-恶意 motive for withholding payment; and the acknowledged need for service improvement by the property company.

Regarding property damage like water leaks, these typically fall under相邻关系 disputes. The liable party is usually the actual infringer, such as the neighboring owner or the developer. The property company's role is generally limited to coordination and assistance, unless it is found to have neglected its management duties directly contributing to the damage.