This guide explains the difference between reserve funds for major repairs and management fees, their relationship to rental tenants, the reality of management fees and common service fees, and how to identify properties with proper management practices—essential knowledge for choosing the right rental property.
Reviewed by: Nobuyuki MoriPresident, M-Assets Co., Ltd. / Licensed Real Estate Transaction Specialist (Miyagi #018212)
When you live in a rental apartment, you may encounter fees such as "reserve fund for major repairs" and "management fees." These may seem like expenses typically paid by condominium unit owners, but they can also be relevant to rental residents. This article clearly explains the difference between reserve funds and management fees, their significance for rental tenants, and how to use this knowledge when selecting a property.
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A reserve fund for major repairs is money set aside to cover major repairs to the building, such as exterior wall painting, roof waterproofing, elevator maintenance, and water supply/drainage pipe replacement.
In condominiums, each unit owner pays a set monthly amount to the management association, which allocates it according to a long-term repair plan. The typical amount ranges from roughly ¥5,000 to ¥20,000 per unit per month, depending on the building's age and size.
Relationship for rental tenants: In rental properties, it is the owner (landlord) who directly pays the reserve fund. However, in buildings with insufficient reserve funds, major repairs are less likely to be carried out, which creates the risk of accelerated building deterioration. When selecting a rental property, asking the owner or real estate agent about "the building's reserve fund status" can be a useful factor in choosing a property that will remain comfortable long-term.
A management fee covers the day-to-day maintenance and management of the apartment building. Specifically, it is used for:
Management fees vary depending on the building's size and amenities, but typically range from around ¥5,000 to ¥20,000 per unit per month.
Relationship for rental tenants: In rental properties, tenants may directly bear "management fees" or "common service fees." In such cases, tenants pay the management fee separately from their monthly rent.
The "management fee ¥5,000" or "common service fee ¥3,000" you see advertised for rental properties are not necessarily the same as the condominium management fees explained above.
In rental properties, management fees and common service fees primarily cover:
However, the reality varies by property, and in some cases, what is labeled as a "management fee" is actually being collected as part of the rent itself. It is important to compare properties by combining the rent and management fees into a "total monthly housing cost."
For rental tenants, what matters most is whether the building where you live (or plan to live) is properly maintained and repaired.
Confirm the following points during a viewing or when submitting an application.
Building exterior and common area cleanliness Check whether the entrance, hallways, and elevator interiors are kept clean. If dirt is visible or light bulbs remain unlit, the building may not be well-maintained.
History of major repairs For buildings 10 years or older, it is reassuring to confirm that major repairs such as exterior wall painting or waterproofing work have been carried out. Try asking the real estate agent or management company about "past repair history."
Management structure Confirm whether the management company is on-site or provides regular patrol management. On-site management tends to respond more quickly to minor issues.
The market rate for rental property management fees and common service fees varies by location and property size, but as a general guideline, 3–10% of the rent is standard.
Additionally, properties advertised as "no management fee" may appear attractive at first glance, but in many cases the management fee amount is simply included in the rent. It is important to compare the total amount you will pay across properties.
In "owner-occupied rental properties," where an individual owner rents out their own condominium unit, there is a risk that the owner may fall behind on reserve fund payments.
Buildings where reserve fund delinquency is common face the risk of disrupted major repair plans and accelerated building deterioration. If you are considering a long-term lease, we recommend asking a real estate broker to confirm the building's reserve fund status.
Reserve funds are set aside for the building's long-term major repairs, while management fees cover day-to-day maintenance and upkeep. Although rental tenants are not obligated to directly pay these fees, whether they function properly directly affects your comfort and the building's safety. When selecting a property, developing an eye for assessing management quality is the key to finding a comfortable home for the long term.
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