The condominium system
The condominium system is designed to offer an efficient legal arrangement for collective ownership and governance of properties with three essential elements (van der Merwe 1994). First, condominium ownership is a special bundle of ownership rights in a multi-unit building that pennits ownership of an individual unit with shared title in common areas to ensure the proper functioning and integrity of the physical structure of the units and the building. Furthermore, ownership in condominiums entails three inextricable elements: the individual ownership of the units, joint ownership of the land (and the common structure and facilities), and duties and responsibilities associated with mandatory' membership in the HOA (or corporation). Second, the condominium form ensures a share of ownership in the whole common property with a clear distinction between individual property, common property, quasi-common property, and areas of exclusive use. It also creates a governance structure for the daily maintenance and management of the condominium in which the proportionate contributions of unit owners for supporting maintenance and management are specified. Third, an HOA must be formed as the decision-making and governance institution, with the voting right of every owner being guaranteed, to maintain and enhance the physical structure of the property. Operations of the HOA are like non-profit organizations in which the general meetings and smaller committee meetings must be regularly held.
Yet, the condornmium system and the HOA have social implications beyond the physical building and its upkeep. Multi-owned housing is more than a place to live; it is a community in which tensions between individual and collective responsibilities are embedded. In the common law context, the transfer of ownership and management rights among developers, managing agents, and owners is prone to power imbalances (Blandy, Dixon, and Dupuis 2006). The contractual rights of the managing agents, which are framed through then contracts with developers, often in practice infringe on the property rights of condominium owners. Yet, in the civil law context, at least in some countries, the law is muddy regarding the bundle of rights of condominium owners, and this conceals and even enables such imbalances of power (Blandy et al. 2006).
Furthermore, HOAs have political implications beyond condominium governance. Not only do HOAs offer opportunities for active community involvement for their members, but the engagement of these members in decision-making adds fuel to the development of active citizenship, which facilitates the interdependence and interaction between civil society and political realms (Marinetto 2003).
Decision-making processes also reflect a form of democracy at the local (or sub-local) level. Within such a context, the direct control of condominium owners over the budgets, the creation and enforcement of rules about the use of common space, and the initiation of lawsuits against third parties has made the homeowners committee a form of mini-local government (Marinetto 2003) or a ‘fourth level of government’ (Lippert 2019). This latter function of the HOA has specific implications in China.
