Apartment Administrative Fees in Japan: What are They?
If you're looking into moving to Japan and renting an apartment, or already living in Japan and thinking of moving, you might already have heard that it is expensive up-front to rent an apartment in Japan. But what might catch you off-guard are extra monthly fees on top of your rent that may be baked into your rental contract. These Administrative Fees (管理費 kanrihi) or Common Area Maintenance Fees (共益費 kyoekihi) will just be listed on your contract without any detailed explanation, and if you are renting an apartment for the first time in Japan you are probably wondering what these fees are.
So let's look at what Administrative Fees and Maintenance Fees are, how they're similar and how they're different, as well as some important things to consider before signing a rental contract that has these fees listed.
What Are These Fees?
While at first glance there may seem to be overlap between Administrative Fees and Maintenance Fees, they actually do serve different purposes. So first, let's look at these two kinds of fees so that you can better understand the differences between them.
Common Area Maintenance Fees
The Common Area Maintenance Fee (共益費) refers to operating expenses for all of the shared facilities and services of the apartment building. This could include the maintenance and cleaning fees for the building entrance, elevators, hallways, parking lots, gyms, pools, or security, depending on what kind of services and facilities are in your building. In short, the Maintenance Fee covers any expenses related to making sure all of the shared areas of the apartment building itself are clean, in good condition, and properly managed.
Administrative Fees
Administrative Fees (管理費) cover a range of expenses that extend beyond the building itself. They help cover costs such as salaries for the apartment management company's staff, administrative expenses, repair reserve funds, and insurance. So while some of what the Administrative Fee helps pay for affects the direct maintenance of the apartment building, it more broadly covers the overall management costs of the apartment.
To understand the differences between Maintenance Fees and Administrative Fees, think of it this way:
If you are paying Maintenance Fees, you are helping pay for the day-to-day maintenance of your apartment building and any facilities and services within it.
If you are paying Administrative Fees, you are helping pay for the overall management of your apartment building by the management company.
Things to Consider Before Signing Your Rental Agreement
Usually, there is no way to get out of paying Administrative or Maintenance fees, so expect to see at least one of them listed on your rental contract and expect to pay that fee every month.
That being said, there are a couple of important points related to these fees that you should consider before choosing and renting an apartment.
Make Sure Maintenance Fees are Being Used Properly
This one may seem like common sense, but if you are expected to pay monthly for the upkeep and cleaning of your apartment building, and the apartment building does not seem clean or well-maintained, that should be a concern.
In Japan, there are no legal regulations for how maintenance and administrative fees are specifically supposed to be used, and that means that sometimes it can be very hard to know how the fees are actually being spent.
When you visit an apartment you are thinking about renting, be sure to take the time to inspect not just the unit you're interested in, but also the shared spaces and overall building as well.
If a building expects you to pay monthly maintenance fees but there's garbage and cigarette butts around the entrance and in the hallways, lights in the hallways aren't working, or equipment in shared facilities is broken or in disrepair, then it's very likely the landlord and management company are not using those maintenance fees how they should be. If the apartment building itself is not being maintained properly but the contract asks you to pay administrative fees, then that should be a big red flag for you and you may want to consider looking for a different apartment.
Keep the Up-Front Costs of Moving in Mind!
Administrative or Maintenance Fees can actually play a part in how much you have to pay up-front when you sign a new lease for an apartment. If you take the time to check different listings for the same property, you may actually be able to pay less up-front!
As you're looking at apartment listings, you may find properties that don't list any Administrative or Maintenance Fees. In those cases, it's likely that these fees are baked into your rent. Sometimes you may find the same apartment listed by two different agencies, where one apartment explicitly states the administrative fee while the other does not. The total monthly cost will work out to be the same, but depending on which listing you choose you may be able to pay less when you first move in.
For example, if you see one listing for an apartment for ¥180,000 plus ¥6,000 in administrative fees, and the same property listed somewhere else for ¥186,000 with no administrative fee, it can actually work out better for you if you choose the first listing!
Here's why:
Move-in costs in Japan are usually made up of one month's worth of rent, a security deposit (usually another one-two month's worth of rent), key money (another one-two month's worth of rent), the real estate agent's commission, and some other possible fees like a lock exchange fee. You'll notice that there is a chance that administrative fees are not included in those initial move-in costs. So by choosing the listing that doesn't bake administrative fees into the rent, you can actually reduce how much you pay when you move in by a not-insignificant amount.
While you may never come across a situation like this while you are apartment hunting, you should at least keep it in mind as you are searching for a new place to live. If you find an apartment you like, try searching for other listings of the same apartment. You may end up being able to save yourself several thousand yen.
Good Luck Apartment Hunting!
Finding a new apartment, especially when you are first moving to Japan, can seem like a daunting, confusing, and expensive process. But now that you understand some of the fees you may see on your rental contract, the whole process should hopefully be a bit smoother.
Of course, here at Tokyo Apartment Inc, we will do our best to find you the perfect apartment that won't bankrupt you with upfront costs, all while making sure we only introduce you to apartments where those administrative fees are being used to make life in the building as comfortable as possible. You can search our listings or get in contact with us here.
