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January 14, 2013

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Home » Metro » Expat Community

Expats, property managers argue over fees

A PROPOSED 65 percent increase in property management fees at an upper-echelon residential complex in downtown Shanghai has drawn the ire of both expatriates and Chinese who live there.

Representatives of property owners at Lakeville, the first phase of the complex in the heart of Xintiandi, met with agents from Shanghai Feng Cheng Property Co on Saturday, demanding to know where every penny of their property management fees goes.

Disputes between expats and their property managers have increased in Shanghai as more foreigners have come to the city to work.

Property managers claim they have to raise fees because of higher labor costs and the demands of residents for higher quality services that include security, building maintenance, grounds upkeep and rubbish collection.

The number of foreign citizens living in Shanghai exceeded 173,000 at the end of last year, a 6.7 percent increase from 2011. Most of them live in about 80 neighborhoods across the city.

In the 10-year-old Lakeville community, more than half of apartment occupants are expats. The service contract signed every two years between the property company and the residents' representative committee expired on December 31, and discussions on a renewal have bogged down over fees.

Feng Cheng, which is in charge of human resources, procurement, accounting and management, made separate presentations for each topic to a group of apartment occupants over the weekend in an effort to defend monthly fees proposed to rise to 12.7 yuan (US$2.04) a square meter from 7.7 yuan.

"The increase is intended to cover losses the company has suffered since 2009 and avoid another deficit this year," said Wang Weiliang, property manager of the community.

He said cost-cutting measures, including a reduction in service staff, had been implemented.

Feng Cheng, according to Wang, began sinking into the red in 2009, and the total deficit reached some 1.69 million yuan between 2009 and 2012. He blamed the rising cost of labor.

Lack of trust in budgets

Property owners don't quite see it that way. They accused the company of falsifying figures related to the proportion of costs of painting outdoor walls allocated to each apartment. Also, they claim the company's plans to purchase surveillance monitors priced at 17,500 yuan are exorbitant given that the devices can be bought for only 2,000 yuan apiece.

"It is using a jet tire when a common automobile tire is all that's required," complained a resident surnamed Tong.

Tong said he was "offended" by the budget figures presented by the management company.

"I think the problem is that we don't know how the figures are calculated, whether they are correct or not," said French expatriate Bruno Villette, who has been living at the complex since 2004.

"It's a problem of confidence. It is not professional to spend so much more than is budgeted," Villette said.

Lakeville is not the only residential complex in the city where tempers are flaring.

A Norwegian named Ingar, who declined to give his full name, said he has been living in the city since the 1980s and he's fed up with local property management companies.

"It is very difficult to get good or qualified property management companies in Shanghai," he said. "I think 90 percent of them are scum."

He said the property management company serving his former residence in the Xujiahui Garden complex did nothing to maintain the property.

When he complained, he said he was told the company couldn't afford to provide better services. He filed a lawsuit against the property managers and said he was attacked by thugs sent to scare him off.

A Finn living in the La Doll International on Beijing Road W., who declined to be named, said she is unhappy with property management services.

"There are so many security men, but they sleep on duty or chat among themselves as people go in and out of the buildings," she said. "They don't lift a finger to help open doors sometimes."

Not everyone is quite so outspoken.

William Coon, an American who has been living in the second phase of Mingducheng in the Minhang District for four years, said he pays about 593 yuan a month in property management fees. He also pays 300 yuan a month for a parking space.

"The good news is that my property fees haven't increased," he said. "The bad news is that they are high, about equal to the fees that I would pay in a major American city."

Still, Coon said he is satisfied with the service he gets for his money.

"We have a beautiful park, and I realize that the gardeners and maintenance cost money," he said. "Every building has a person on duty nine hours a day to help us with any problems."

Adjustments require vote

In 1997, Shanghai officials allowed property management fees to fluctuate within a certain range. In 2005, the city started implementing charges based on types of housing.

Still, any adjustment in property management fees requires a majority vote by property owners in a complex.

Zhu Zhirong, director of the Association of Shanghai Property Management, said many of his group's members are under siege, caught between rising costs and residents' unwillingness to pay more for the higher services they demand.

A small number of smaller management companies, faced with deficits, have simply pulled the plug abruptly, leaving complexes to cope with uncollected rubbish, machinery breakdowns and untended gardens.


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