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Not-so-friendly neighborhood associations

by Philip Brasor and Masako Tsubuku

When the U.S. military took charge following Japan’s surrender in 1945, one of the first things it did was ban jichikai, or community associations. The thinking was that these organizations had carried out the work of the military government at the neighborhood level and their continued existence might undermine Japan’s changeover to a more representative democracy. It didn’t quite work, though. As soon as the Occupation was over, jichikai returned.

The Americans didn’t need to worry, though. Community associations no longer foster fascism. Some residents, however, may find them overbearing in their efforts to get everyone within their bailiwicks on board for community activities like festivals and cleanup programs. Their objective is for residents to cultivate a feeling of solidarity, which can be very important when disaster strikes. But most of the work that jichikai do is on behalf of local governments.

Kanri gumiai (management associations) do pretty much the same thing in apartment buildings and condominiums. Their main task is to supervise the maintenance of the building and enforce charters. For that reason, the monthly fee is always higher than it is for jichikai. The money not only goes to pay for required elevator maintenance and shared utilities, including electricity for halls and foyers, but also to group events approved by the association.

Some condo owners, however, may not want to participate in these events, and this sort of attitude has led to a problem that has been addressed at the national level. In 2004, the Ministry of Land, Infrastructure, Transport and Tourism implemented new guidelines for condominium management associations that included suggestions for “creating good relationships among residents” for the benefit of the community. Though these guidelines were not legally binding, management associations all over the country amended their charters to include them.

According to an article in the Sept. 30 Asahi Shimbun, last year the condominium management division of the nationwide Public Interest Incorporated Foundation received 378 separate complaints by residents about their kanri gumiai for “misusing funds” for events such as festivals and funerals.

So last March, the ministry announced it would remove the guideline for “creating good relationships,” since some residents think it violates their privacy. Management associations are made up of residents themselves, usually on a rotating basis, and the ministry’s fear is that the guideline might make it more difficult for some building associations to get residents to participate in them.

Almost immediately, Zenkanren, the largest nationwide league of condominium management associations, protested the removal of the guideline, saying that creating good relationships among residents of a building was essential for the well-being of everyone. More to the point, Zenkanren thinks that even though the guideline has no legal grounding, if it is removed, residents who don’t participate in association-approved events could conceivably sue the association for misusing funds. The ministry is soliciting public comments on the matter this month.

These sorts of problems are bound to increase since condominiums, especially in the larger cities, are getting bigger and bigger — some of the new buildings on the Tokyo waterfront contain more than 1,000 units. The larger the number of residents involved, the more disagreement there is bound to be with regard to how management associations are run. A good example is the four-building condo complex in Yokohama that has been in the news because one of its buildings is tilting due to a construction flaw. It has become very difficult for the residents to reach a consensus as to what they will do — remedy the flaw or rebuild the entire structure.

Some building associations bring in professional management companies to sit on the association boards as permanent members. The participation of professionals usually means higher monthly management fees, but it also means problems are addressed more quickly and maintenance is carried out regularly.

But as an article in the Feb. 3 issue of the business magazine Diamond points out, many management associations are operating at a deficit, which is why residents who don’t participate in group events may resent them even more. These residents already think they’re a waste of money. Diamond reported on a 300-unit condo in Saitama that was built in 2007. The association members were surprised when the employee of the management company they hired told them at a meeting that the management fund was about to go into the red, owing to higher electricity fees and loss of revenue from an increase in vacant parking spaces. More significantly, the shuzenhi, (repair fee) that each resident pays separately for future major repairs to the building, was not nearly enough and would have to be raised.

The reason for the shuzenhi shortfall is easy to explain. The developer purposely set the amount low in order to attract buyers, and it wasn’t until after the buyers moved in that they realized — or, in this case, were told — that the fund would be insufficient to carry out major repairs, meaning everyone would have to come up with a large amount of money when those repairs are eventually carried out.

Another reason management associations may lack sufficient funds is that an increasing number of residents aren’t paying their fees. A 2013 government survey found that 37 percent of condo owners haven’t paid their fees for three months or more, 23 percent haven’t paid them for at least six months and 16 percent haven’t paid them for a year. That’s up from 2003, when 32 percent hadn’t paid for three months or more. Since there are more condo owners than there were in 2003, this means the absolute number of scofflaws is going up.

When owners don’t pay for a certain number of months straight, the association can ask a court to seize the owner’s assets. It will only seize the condo as a last resort, since it might be difficult to sell, owing to the condition that a new owner will be expected to pay all the outstanding fees of the dispossessed resident.

More to the point, new condo construction is hardly slowing down, even though there’s a glut of old, empty condos. People still seem to prefer something new and untouched, and will pay for it.

Philip Brasor and Masako Tsubuku blog about Japanese housing at www.catforehead.wordpress.com.