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September 4, 2012

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Tenants in old housing complexes may feel management fee hikes

TENANTS renting apartments from many old downtown residential complexes such as Jing'an Villa, where many expatriates live, should prepare for an increase in rent when they renew contracts with their landlords.

That's because the local housing authority has enacted increased fees for property management services at all such housing projects.

The new charges became effective last Saturday, as ordered by Shanghai Housing Support and Building Administration Bureau. They will cover more than 5,300 old housing compounds mostly built before the early 1990s and previously state-owned.

More than 1.8 million households residing at such apartments will face the adjustments made on property management bills. And increased maintenance costs are typically passed on by their landlords to tenants.

Compared with the residential projects that sprung up after the 1990s, older housing complexes charge much lower property management fees. The housing watchdog said yesterday that the practice was meant to help ease continuous losses for property managers servicing such aged compounds and motivate them to better their service.

Property management companies have seen their labor costs increased by multiple times over the recent decade but the growth in service charges was trivial. The previous lowest property management bill for such an apartment is 10.5 yuan (US$1.66) per month.

New rules will authorize companies to charge each household fees of up to 24 yuan a month.

The housing authority is expecting to make use of the moderate price levy to solve a long-existent dilemma in such neighborhoods where residents complain of inadequate services while the property managers are reluctant to improve service because of costs.

But it's still in doubt whether the increase will work out as planned.

"I will definitely refuse to accept paying the extra charge and so are many of my neighbors, for sure," said a woman, 68, surnamed Xu, a resident in the Jing'an Villa, on Weihai Road in Jing'an District.

Located next to busy Nanjing Road W., the old lane is popular among foreign tenants. And 45 percent of the housing complexes from this district will face the management fee changes.

"There is no way that we would agree on increased charges, not with the current service we receive," she said. The biggest complaint among residents there is the property manager fails to control the number of vehicles parked inside.


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