Housing

Dec 22. 2018Housing

What Are My Monthly "Administrative Fees" Used For?

Along with your standard monthly rent, you may have seen something called an Administration Fee (管理費) or Common Area Maintenance Fee (共益費) on your contract. These two terms are typically interchangeable, and are regarded as standard fees for the operation and maintenance of apartments and mansions.

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Specifically, these fees are supposed to go towards repair and maintenance of the building entrance, elevator, mailbox, emergency staircase, corridor areas, bicycle parking area, garbage dumping spot, replacement light bulbs, and regular cleaning fees. However, there are actually no legal regulations regarding how administrative fees are specifically supposed be used, and in truth it can often be ambiguous where the money actually goes. Therefore, it's important to carefully take a look around when you're touring a potential apartment.

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If, despite collecting monthly administrative expenses, the entrance and corridors are full of garbage, empty cans or cigarette butts, there are advertising leaflets falling out of the mailboxes, the lights in the corridors aren't working, or if the parking lot is full of rusty, unused bicycles, then it's quite likely that the landlord and management company aren't using the administration fees properly. This is one of the most important things to look for when choosing a room. At the very least, be take a look at the garbage area to make sure that it's being well maintained. When we accompany you to inspect an apartment, we always take special care to make sure the building management is adequate.

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Depending on the property, it may be the case that there is no administrative fee listed. Even in these scenarios though, the understanding is that the fee is included in your rent. Somewhat strangely, there are cases where different advertisements for the same property might list different rent and administrative fee ratios, even if the total ends up being the same. For example, you might see an advertisement listing a property for ¥180,000 rent and ¥6,000 in administrative fees, and then a second one listing the exact same property for ¥186,000 and no administrative fee. This is typically due to the landlord and management company taking things like seasonal considerations into account. The trick is, even if the overall monthly amount is the same, the presence or lack of an administrative fee will make a difference in the initial cost you pay when you move in. Your move in costs are calculated based on the security deposit, key money, and brokerage commision, but administration fees do not count towards the costs. So, when comparing the two advertisements, even though they may seem the same, in fact the advertisement listing the property at ¥180,000 rent and ¥6,000 in administrative fees will end up being cheaper, as your initial move in costs will not include that ¥6,000 fee. Naturally, at TAI we work hard to introduce you to properties that minimize your initial move in costs.