Before buying a condominium in Japan, you should familiarize yourself with how the building management association in your building operates because this body, which consists of all owners of units in the building, will make important decisions affecting your future home or investment property.
A building management association in a Japanese condominium building is similar to a Homeowners’ Association (HOA) in the United States.
What is a Building Management Association?
A building management association consists of all the unit owners in a condominium building and makes decisions regarding the day-to-day operations of the building, usage of common areas, usage of repair reserve funds (and the amount required to be paid by all owners), as well as setting the management fees.
Unit owners in a building elect a board of members to lead the association and a chairman, who also plays the important role of representing absentee and overseas owners for voting on issues regarding the property.
Some associations decide to include professional management as permanent members of the board; this does result in higher management fees but can help with efficiently operating the property.
All owners will be contacted regularly to vote on certain issues and the board holds regular meetings on various topics related to management of the building.
Typical Meeting Agenda
Tokyu Housing Lease Corporation, one of Japan’s leading property management companies, manages many properties on behalf of absentee/overseas owners.
The snapshot of the meeting agenda below is from a building management association of a large-scale residential building in Minato Ward, Tokyo that is managed by Tokyu Housing Lease Corporation.
- Topics up for voting
- How to invest the repair reserve fund. This is mostly handled by using low-risk, low-return guaranteed long-term investment vehicles that are fully insured. Any interest earned becomes part of the fund. The association will do the work of comparing several options in regards to their merits and risk management.
- Decision to incorporate the Building Management Association
- Topics regarding the election of board members
- What to do when a board member quits
- What to do when a board member does not show up for meetings
- How many members the board should have
- Discussions regarding media content (e.g. filming on location, interviews etc.)
- Various rules regarding filming
- Usage of “Share Station”, various events
- Share service for selling rice, water etc.
- Leisure activities like barbeque for residents and costs involved for grill rental etc.
- Services like laundry cleaning, shared bicycles etc.
- Decisions regarding fixing/replacement of interphone at parking garage
- Management of parking spaces
- Parking for people with disabilities, motorcycles, bicycle storage rooms
- Leasing the unoccupied parking spaces to third parties/non-residents
The agenda for this property is in reality even longer, so this gives you an idea of the various responsibilities that the building management association has.
Notification of Meetings
Regular voting sessions of the building management association usually occur several times a year.
The building management association will send out a document checking if you will be absent or available for the vote. If you are absent, there are two ways you can still participate:
Option A: Give power-of-attorney to the chairman of the board to vote on your behald. This is the most popular option for overseas owners since the building management association can make important decisions efficiently.
Option B: Give your vote on each specific issue. Since understanding all the details, as well as the lengthy reading requires a high level of Japanese, almost no overseas owners use this option.
When you engage a property manager in Japan, the building management association will send those documents in most cases directly to the PM on request, but they will still have to contact you to fill out the form as mentioned above.
Filling out this form and sending it back is the duty of the owner, because especially in properties with lots of absentee owners getting enough participants for voting is important.
To hold the meeting, 50% or more of owners need to vote. In case of important decisions regarding the property, the threshold is at 75%.
When deciding whether to tear down and rebuild the property, 80% or more of the owners need to vote.
This article is brought to you by Tokyu Housing Lease Corporation, one of the leading property management companies in Japan.
To contact them, please use the inquiry form below and a representative will contact you shortly.
Top photo: Nishi Shinjuku, Tokyo.