When you own an apartment in Japan you, along with the other apartment owners in the building, will pay monthly fees each month that go into the building’s repair reserve fund. These fees go towards periodic maintenance and repairs of the common structure of the building. Some buildings have high fees, while others have low fees. What’s the reasoning and what is a reasonable amount to expect?
Brand new and near-new apartments often have very low repair fund charges. This is often a sales tactic used by the developers in order to make the apartments appeal budget-friendly to buyers in the beginning. However, over time these fees need to be increased in order to pay for the large-scale maintenance that should ideally be carried out every 10 to 15 years. Fees may be increased in increments over the span of several years or have periodic lump-sum payments. Be wary of an old apartment with unusually cheap maintenance fees. In some cases, it may indicate that the apartment owners in the building are less interested in its maintenance or cannot afford the upkeep.
The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) released guidelines in 2011 that provide suggested amounts that should be charged based on the scale of the building. These are just guidelines and not enforceable.
If the building includes machine-type car parking, repair fund fees should be slightly higher to reflect the added cost of maintaining this equipment. The MLIT suggests somewhere in the region of 7,085 Yen ~ 14,165 Yen per month per parking space.
Broadly speaking, no two apartment buildings are alike. Their maintenance and repair history over the years can vary widely depending on issues that arise, or don’t arise, and how proactive the apartment owners are. Some buildings are poorly maintained and others are well maintained. A glance at the exterior and common areas in a building can give you a general idea of the owners’ attitudes towards repairs and maintenance, and a buyer can also obtain a list of past repairs carried out to check the history.
Large-scale repairs and maintenance
Every 10 ~ 15 years, or thereabouts, large-scale building repairs and maintenance should be carried out on a building. You may often see temporary scaffolding put up on buildings while exterior tiles are checked and window seals and waterproofing is re-done.
The MLIT conducted a survey in 2017and found the average large-scale repair and maintenance works were carried out at the 16.3 year mark on an apartment building. The second round was carried out at the 29.5 year mark and the third round was carried out at the 40.7 year mark.
As for cost, the average was 1,000,000 Yen per apartment for the first round, 979,000 Yen for the second round, and 809,000 Yen for the third round. If there is not enough money saved up in the building repair fund, the owners association may elect to borrow the funds and increase apartment fees as the loan is paid off, or collect a lump sum payment from each apartment owner. Alternatively, and the least preferable scenario, is to delay the periodic maintenance. This can cause more costly issues down the road.
Changes to labor and material costs can make repairs higher than originally budgeted for. This is an issue that has become noticeable in recent years.
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