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2026-10-13

Buy a second-hand condominium by looking at its "management" ― the 5 numbers in the important matters investigation report, and the truth about the unit that is 2,000,000 yen cheaper

The price of a second-hand condominium is set by size and distance from the station, but what you spend after moving in is set by management. The balance of the repair reserve fund, arrears across the whole building, the long-term repair plan, planned lump-sum levies or increases, and the seller's own arrears. Through the broker, much of this can be learned from the "important matters investigation report" (重要事項調査報告書) prepared by the management company. The national management plan certification standards also serve as a yardstick (under review as of October 2026). The ten-year outlay on the unit that is 2,000,000 yen cheaper is laid out in a table.

About this translation ― This page is an English translation of an article originally written in Japanese by KuraLab's operator, a licensed real-estate transaction specialist (宅地建物取引士) and administrative scrivener (行政書士) in Japan. The Japanese original is the authoritative text; where the two differ, the Japanese version prevails. The article explains Japanese law and procedure in general terms as of the date shown. It is not legal, tax or immigration advice for your situation ― please confirm with a licensed professional in Japan. Japanese terms are kept in parentheses so you can search for them. Read the Japanese original

"Same station, same age, about the same size, and the two units differ by 2,000,000 yen. The cheaper one is fine, isn't it?" A couple in their thirties looking for a second-hand condominium brought the documents for two properties. As a licensed real-estate transaction specialist (宅地建物取引士), I am the person who gives the explanation of important matters at a sale. Leafing through the documents, the first thing I looked at was not the photographs of the rooms but the figures in the "important matters investigation report" (重要事項調査報告書) issued by the management company. This article sets out the order in which I looked.

When you buy a condominium, you own not only your unit (the exclusive part) but also, together with the other owners, the common parts: corridors, external walls, the roof. Money for repairing the common parts is saved through the monthly repair reserve contributions (修繕積立金), and if that is not enough, a lump-sum levy is collected or money is borrowed. So the state of management before you buy determines your outlay after you buy. In another article on this site about tendering for major repairs, I described a lump-sum levy of 300,000 yen per unit. The person who pays that 300,000 yen may be someone who bought a unit after the resolution.

Part of the state of management is revealed in the explanation of important matters. The Regulation for Enforcement of the Real Estate Brokerage Act (Article 16-2) requires that, when a condominium unit is sold, the rules on the repair reserve fund and the amount already accumulated, the amount of any arrears, the amount of the management fee, the company entrusted with management and so on be explained. The broker obtains this information from the management company in a document called the "important matters investigation report" (issuance is often charged for, and usually the seller's broker requests it). The buyer can ask to see the report itself before the contract.

There are five numbers to look at in the report. First, the balance of the repair reserve fund (the total the management association has saved). Second, the arrears across the whole building. Third, whether there is a long-term repair plan and the year it was last reviewed. Fourth, planned major repairs, and whether a lump-sum levy or an increase in contributions has been decided or is under consideration. Fifth, the arrears of the seller of that particular unit. The fifth passes to the buyer (Article 8 of the Act on Building Unit Ownership: the management association can claim the previous owner's arrears from the buyer).

Each of these five numbers connects to an outlay after purchase. The reserve fund balance determines the size of any lump-sum levy. Arrears across the building are pressure for an increase. The year the long-term repair plan was reviewed shows how far the plan can be relied on. A resolution on a levy or increase means that if you buy after the resolution, you pay it. The seller's own arrears are taken over by the buyer (Article 8). The yardstick is the management plan certification standards: arrears within 10%, a plan of 30 years or more with at least two major repairs, and so on.

As a yardstick for judging the numbers, the standards of the national "management plan certification system" (管理計画認定制度) can be used. Started in 2022, it is a system under which municipalities certify condominiums with sound management. For example: arrears of three months or more of repair reserve contributions within one tenth of the total; a long-term repair plan of 30 years or more with at least two major repairs in the remaining period; no future lump-sum levy planned. At a study group in February 2026, the Ministry of Land, Infrastructure, Transport and Tourism presented a draft revision that would, among other things, shorten the deadline for reviewing the long-term repair plan from the current "within 7 years" to "within 5 years," with implementation planned for around April 2027 (as of October 2026; still a draft). More useful than whether a building is certified is to hold the numbers in front of you up to this yardstick.

What the documents do not show, you look for in the minutes of the general meetings. Ask to see the last two or three years, and you can see whether increases in contributions have been voted down repeatedly, whether nobody will serve as a director, whether there is talk of changing the management company. The figures in the report are the "now"; the minutes are the clue to how those figures will move. If the seller does not have them, ask the management company through the broker.

Let me also answer a common question about how the money changes hands. The repair reserve contributions the seller has paid up to now do not come back to the seller when the unit is sold. They are the management association's money and pass to the next owner together with the unit. It helps to think of the higher price of a building with a thick reserve fund as buying those savings along with it. Conversely, if the seller is in arrears, the usual arrangement is for the arrears to be paid to the management association out of the sale proceeds on the handover date, with the settlement completed before handover. The management fee and contributions for the part month are usually prorated by the handover date between seller and buyer.

The two properties the couple brought (both 30 years old, 50 units, around 70 square metres). A: price 32,800,000 yen, management fee 12,000 yen a month, repair reserve contribution 18,000 yen a month. The association's reserve balance was 105,000,000 yen, arrears across the building 380,000 yen, the long-term repair plan reviewed two years earlier, no lump-sum levy planned. B: price 30,800,000 yen, management fee 10,000 yen a month, repair reserve contribution 9,000 yen a month. Reserve balance 28,000,000 yen, arrears across the building 3,200,000 yen, the long-term repair plan untouched since it was drawn up nine years earlier. The remarks column of the report said "lump-sum levy under consideration ahead of major repairs in three years," and the minutes showed that a proposal to raise contributions had been voted down two years running.

The monthly burden looks 11,000 yen lower for B (management fee plus contribution: A 30,000 yen, B 19,000 yen). But B's balance of 28,000,000 yen is not enough for major repairs on a building of this size. If the work costs 70,000,000 yen, the shortfall is 42,000,000 yen, and divided equally among 50 units that is a lump-sum levy of 840,000 yen per unit (in practice it is usually apportioned by unit size). After the levy, unless contributions are raised for the next round of work, the same thing repeats.

The table compares the two over ten years of payments after purchase. For B, I assumed a lump-sum levy of 840,000 yen in three years, after which the contribution rises from 9,000 to 24,000 yen a month. The increase is 15,000 yen a month, which over the remaining seven years (84 months) is 1,260,000 yen. For A, I assumed the contribution stays unchanged for ten years. The totals are 36,400,000 yen for A and 35,180,000 yen for B, so the gap narrows from 2,000,000 yen to 1,220,000 yen. It will not necessarily turn out this way, but about 780,000 yen of the "2,000,000 yen cheaper" was money to be paid later.

In figures, over ten years after purchase (assuming for B a levy of 840,000 yen in year three and a contribution of 24,000 yen a month thereafter): unit price, A 32,800,000 yen, B 30,800,000 yen. Management fee and contributions at today's rates for ten years, A 30,000 yen × 120 months = 3,600,000 yen, B 19,000 yen × 120 months = 2,280,000 yen. Lump-sum levy, A 0 yen, B 840,000 yen. Increase in contributions (15,000 yen × 84 months), A 0 yen, B 1,260,000 yen. Ten-year total, A 36,400,000 yen, B 35,180,000 yen. Difference between A and B: 1,220,000 yen (the initial difference was 2,000,000 yen).

The couple chose A. This is not to say you must not choose B. If you choose B, there is also the route of negotiating the price with the levy and the increase in mind. What matters is deciding after you know where that 2,000,000 yen comes from.

The same documents are looked at when you sell. The state of management appears in the same way to the eyes of the next buyer. When advising on the sale of an inherited condominium, too, I ask for the report and the minutes to be obtained first.

The price of a second-hand condominium is decided by the unit; what you spend after moving in is decided by management. The diagram in this article puts on one sheet which outlay after purchase each of the five numbers in the report leads to. Before you go to see the unit, ask to see the report.

Written by: 長澤 湊（licensed real-estate transaction specialist, administrative scrivener, assistant surveyor）　Content checked on: 2026-10-14

This article is a general explanation of Japanese rules and procedures, not advice on an individual case. Figures and rules are as of the date shown. For your own situation, consult a lawyer, judicial scrivener, tax accountant or administrative scrivener in Japan.

Official sources

The rules and figures in this article can be checked against the following official pages (in Japanese).

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