Fifteen years ago, Aunt Li lent a parking space assigned to her by the property management company to her neighbor. Now, when she wants the space back, the neighbor refuses. Is a private parking space lending agreement between homeowners valid? Given the shortage of parking spaces in many older residential complexes, how should such communal resources be allocated fairly?

[Case Review]

In 2002, as one of the first homeowners in a residential complex in Shanghai, Aunt Li was assigned a fixed underground parking space by the property management company and paid parking fees for its ongoing use. Later, with the growing prevalence of private motor vehicles, parking spaces within the residential complex grew increasingly scarce. In 2009, Xiao Sun bought a residential unit and took up residence in the same complex. The following year, Aunt Li and Xiao Sun concluded a private agreement (hereinafter the ¡°Agreement¡±) whereby Aunt Li allowed Xiao Sun to use the parking space, with Xiao Sun undertaking to settle the relevant parking charges on her behalf; Aunt Li was entitled to demand unconditional handover of the parking space at any time. Subsequently, without Aunt Li¡¯s awareness, Xiao Sun signed a standalone parking contract directly with the property management company, granting himself the right to exclusive use of the subject parking space. Years afterward, upon moving back to the complex, Aunt Li demanded the return of the parking space but was turned down. Having exhausted all avenues for amicable settlement, Aunt Li brought the case before the people¡¯s court.

Aunt Li contended that the Agreement entered into between her and Xiao Sun was legally binding. She claimed that Xiao Sun, in breach of contractual obligations, wrongfully occupied the parking space and was obligated to return it. By contrast, Xiao Sun argued that he had lawfully obtained the right to use the parking space, and that Aunt Li, having failed to assert her right for over a decade, had long since lost her relevant right to use the parking space. During the proceedings, the court learned that the ownership of the underground parking spaces in the residential complex belonged to the developer. The property management company, entrusted by the developer to administer such parking facilities, manages them accordingly. If the original space user voluntarily gives up the parking space or transfers ownership of their residential property, the space is reallocated according to a waiting list based on the order of registration, and private transfer of parking space usage rights is prohibited.

[Ruling of the People¡¯s Court]

The court held that parking spaces and garages designated for vehicle parking in a residential complex shall first satisfy the needs of the property owners. The complex¡¯s parking management rules explicitly provide that if the original space user voluntarily gives up the space or transfers ownership of their residential property, the space shall be reallocated according to a waiting list based on the order of registration. Given that the number of parking spaces is insufficient to meet the parking demands of all owners, the Agreement concluded between Aunt Li and Xiao Sun regarding the use of the parking space constituted malicious collusion, violated the complex¡¯s parking management rules, and prejudiced the rights of other owners. Consequently, the Agreement was held to be void. Aunt Li¡¯s claim for the return of the parking space based on the Agreement was denied by the court. Xiao Sun, who had actually used the parking space under the Agreement and, without Aunt Li¡¯s knowledge, entered into a separate Vehicle Parking Contract with the property management company, was found to have breached the principle of good faith and evaded the parking management rules; accordingly, his rights shall not be afforded judicial protection. Considering that the use of the parking space in question fell within the purview of the Owners¡¯ Committee and the property management company as a matter of residential complex management, the court ruled that the parking space should be reallocated by the Owners¡¯ Committee and the property management company in accordance with the relevant rules. Accordingly, the court dismissed Aunt Li¡¯s claim. Both Aunt Li and Xiao Sun filed an appeal, and the second-instance court affirmed the original judgment.

[Judge¡¯s Insights]

I. Forging Consensus: Improving Parking Management Rules

The difficulty in securing parking is not only a tough issue for urban governance but also an important matter bearing on people¡¯s livelihood. As private car ownership keeps rising, the imbalance between supply and demand for residential parking spaces has grown increasingly prominent. Many residential complexes short of parking resources have formulated parking management covenants, explicitly barring private lending of parking spaces or occupation through private deals; all parking spaces must be allocated uniformly and standardly and used in a fair and orderly manner subject to relevant management rules.

The relevant provisions of The Civil Code of the People¡¯s Republic of China and the Shanghai Regulations on Residential Property Management indicate that the right to use parking spaces bears the nature of public interests. In practice, parking management rules for residential complexes must be tailored to local conditions and scientifically formulated. Such rules need to balance the parking demands of new and existing owners regarding the first vehicle and extra vehicles per household, while also taking into account the long-term use of parking spaces and the overall peace and order of the complex. Major matters involving the parking rights and collective management rights of all owners must, by law, be approved by voting at the Owners¡¯ General Meeting before taking effect, thereby ensuring that the rules are legally sound and formulated via co-governance based on owners¡¯ consensus.

II. Community Co-Governance: No Evasion of Management Rules

Parking management rules adopted by vote of the Owners¡¯ General Meeting embody the overall interests and collective will of the complex and are binding on all owners. No individual may make private alterations or deliberately circumvent such rules.

In the present case, the agreement between Aunt Li and Xiao Sun for temporary use of a specific parking space subject to recall at any time, and Xiao Sun¡¯s subsequent entry into a Vehicle Parking Contract with the property management company in his own name after having obtained actual use of the parking space under the Agreement, were both intended to circumvent the complex¡¯s registered waiting list allocation mechanism for parking spaces and to breach the principle of equal distribution of public resources. Such conduct constituted malicious collusion that infringed upon the lawful rights and interests of others, thereby frustrating the legitimate expectation rights of other owners on the waiting list. This conduct violated both the principle of good faith and the complex¡¯s management covenants. Accordingly, the private agreement in question and the irregularly executed contract are not afforded legal protection.

III. Strengthening Oversight: Transparency in Parking Management

Parking administration of the residential complex is primarily the responsibility of the property management company. However, key aspects such as the allocation of parking spaces, conclusion of relevant contracts, and confirmation of usage rights must strictly comply with the complex¡¯s parking management rules. In performing its duties, the property management company shall adequately verify ownership and investigate the relevant circumstances, exercise due diligence in completing relevant formalities in accordance with the rules, and proactively maintain the order of parking space management.

At the same time, the effective operation of the rules requires multi-party oversight. The Residential Committee and relevant administrative departments shall strengthen their supervision and guidance over the property management company. The Owners¡¯ Committee and the owners themselves shall actively exercise their rights to be informed and to supervise, urging the property management company to regularly disclose information regarding parking space usage, waiting list status, and relevant revenues and expenditures, thereby ensuring full transparency throughout the process.

All owners shall voluntarily abide by the parking management covenants and refrain from the opportunistic conduct of privately loaning or informally occupying parking spaces. Only by collectively observing and upholding the rules can the bottom line of fair distribution of public resources be preserved, and can neighborhood harmony and the stability of community governance be maintained.

[Comments from a Deputy]

Jiang Shanyong, Deputy to the Shanghai Municipal People¡¯s Congress; Deputy Director of the Shanghai Jing¡¯an District Center for Cultural Heritage Protection and Management Services

Disputes over parking spaces in residential complexes are a common occurrence. On the one hand, such disputes stem from an overall shortage of parking space resources in some complexes; on the other hand, such phenomenon is closely related to the lack of scientific and effective management of such spaces by the relevant parties.

In the present case, the court lawfully determined that the privately executed parking space loan agreement was void, thereby restoring the allocation principle governing the disputed parking space. On a legal level, the court emphasized the public attribute of parking space usage rights and the primacy of parking management rules in community self-governance. On a social level, it advocated the concept of ¡°rules first, use thereafter¡± for the allocation of community public resources. This judgment plays a positive guiding role in enabling the Residential Committee, the Owners¡¯ Committee, and the property management company to take a leading role in community self-governance, and in fostering a sense of collective responsibility and awareness of rules among community residents. It upholds fairness and justice, serves as a vivid example of judicial empowerment in community governance, and provides robust judicial protection for the improvement of people¡¯s livelihood.

[Relevant Laws]

The Civil Code of the People¡¯s Republic of China

Article 7 When engaging in civil activities, civil subjects shall follow the principle of good faith, uphold honesty, and honor their commitments.

Article 154 A civil juristic act concluded through malicious collusion between the actor and the counterparty to impair the lawful rights and interests of others shall be null and void.

Article 276 Parking spaces and garages designated for vehicle parking within a building district shall first satisfy the needs of the property owners.