When you buy a condominium, there are ongoing monthly costs beyond just repaying your mortgage. These include “management fees” and “repair reserve funds.” It’s important to fully understand these fees before making a purchase. In this blog post, we’ll provide a detailed explanation of these costs, which you’ll continue to pay even after buying your condo.
■(1) Ongoing Costs After Purchasing a Condominium■
First, management fees are used to maintain the livability of the condominium, covering things like cleaning shared areas, equipment inspections, and elevator maintenance. On the other hand, repair reserve funds are money set aside for future major repairs that will be necessary as the building ages.
You will be required to pay both fees as long as you live in the condominium. Your total monthly housing costs will include these fees on top of your mortgage payments, so it’s crucial to confirm the exact amounts beforehand to avoid straining your budget.
The amount you pay for management fees and repair reserve funds varies depending on the age and size of the condominium, but together they can amount to several tens of thousands of yen per month. It’s essential to confirm these costs in advance to avoid any surprises.
■(2)How to Check the Amount of the Repair Reserve Fund ■
The specific amounts for management fees and repair reserve funds are outlined in the condominium’s management rules. For newly built condos, you can check these fees in the property documents or by asking the sales representative. If you’re buying a used condo, request the Important Matters Investigation Report through the real estate agent.
This report contains key information, including:
- he total amount accumulated in the repair reserve fund
- Any unpaid fees
- Scheduled fee increases
- Whether the management association has any outstanding loans
- Past repair work history
- Future repair plans
This information will help you understand the long-term cost burden and the condominium’s maintenance status.
■(3)Check Management Fees and Repair Reserve Funds with a Long-Term View■
Once you purchase a condo, you’ll be paying management fees and repair reserve funds continuously. In some cases, there may be additional charges or increases in fees if there is a shortage in the reserve fund. To avoid any unpleasant surprises, make sure to review these thoroughly before purchasing.
You may be tempted to choose a condominium with the lowest possible fees, but lower fees don’t always mean better. If management fees are too low, cleaning and equipment maintenance may be inadequate, leading to deteriorating shared areas. This can decrease the quality of living and lower the value of the property.
Similarly, if the repair reserve fund is insufficient, there may not be enough money to cover future large-scale repairs, resulting in unexpected additional charges for residents. It’s important to pay appropriate fees to ensure the long-term upkeep of the building.
At SeaHome, we have expertise in determining the appropriate levels for management fees and repair reserve funds, and we can support you in selecting the right condominium. If you’re considering purchasing a condominium, please feel free to contact us!
