When you purchase a condominium unit, you automatically join the "management association," yet surprisingly few owners fully understand how it actually functions. The operation of the management association is an important framework for protecting the property’s asset value and maintaining a sound living environment.This article explains the role of the management association, the duties of board members, and its relationship with the management company.
What Kind of Organization Is a Condominium Management Association?
A condominium management association is an association made up of all purchasers of condominium units (unit owners) under the Act on Building Unit Ownership, and it is responsible for managing the building, the site, and related facilities.Its establishment is required by law, and it is automatically formed once there are multiple unit owners. Tenants cannot become association members.
The Five Main Roles of a Condominium Management Association
- Management of the site and building: Planning and carrying out cleaning, inspections, and repair plans for common areas such as hallways, elevators, and entrances
- Management fees and repair reserve funds: Proper operation and accounting management of fees collected from unit owners
- Preparation and revision of management bylaws: Establishing rules based on the Ministry of Land, Infrastructure, Transport and Tourism’s Standard Condominium Management Bylaws and reviewing them regularly
- Document retention: Managing important documents such as design drawings and repair records (essential materials for rebuilding and large-scale repairs)
- Crime prevention and disaster preparedness measures: Patrols, evacuation drills, preparation of disaster manuals, and raising residents’ awareness of security
What Are the Board Positions, Their Roles, and the Usual Level of Activity?
Main positions and roles
| Position | Main role |
|---|---|
| President | Representative of the management association, convener of the general meeting, and point of contact for outside vendors. However, the president does not have sole decision-making authority, and agreement at the board meeting and general meeting is required. |
| Vice President | Supports the president and acts on the president’s behalf when absent |
| Director in charge of accounting | Handles the receipt, custody, and operation of management fees and reserve funds. In self-management arrangements, this director personally manages all accounting. |
| Auditor | Conducts operational audits from a neutral standpoint and has the authority to call an extraordinary general meeting when misconduct is suspected |
| Director in charge of disaster preparedness | Disaster preparedness officer holding fire prevention manager qualifications (this position is optional) |
General guideline for activity frequency
Board meetings are commonly held anywhere from once a month to once every few months. When operations are outsourced to a management company, that company handles most day-to-day tasks, so the burden on officers is relatively light.However, final decision-making authority always remains with the management association.
What Is the Relationship Between the Management Association and the Management Company?
The management association is the "principal" of condominium management, meaning the decision-making body, while the management company is the "executing body" entrusted by the association with operational work.The relationship between the two is not an employment relationship but a contractual outsourcing relationship.
Important point: Even after outsourcing work to a management company, the foundation for maintaining asset value is for the management association to regularly supervise how that work is being carried out, rather than leaving everything to the company. The authority to select or change the management company and to review the scope of the outsourced work also rests with the management association.
Benefits of Establishing a Management Association
- Maintaining a comfortable living environment: Proper management of common areas and well-defined community rules
- Preserving asset value: Maintaining property value through appropriate maintenance and repair planning
- Preventing and resolving disputes among owners: Smooth problem-solving through a democratic decision-making process (general meetings and majority voting)
What Does It Mean for a Management Association to Become Incorporated?
A management association may also become incorporated, which allows the corporate entity to carry out formal procedures such as real estate registration. When considering large-scale repairs, rebuilding, or asset management, the advantages of incorporation are also worth examining.
Recommended Reading
- What Makes a Rental Management Company the Preferred Choice? Differentiation, DX, and Revenue Strategies for Building Competitive Advantage
- What Is the Proper Procurement Route in Property Management? How to Protect Property Value by Reducing Unnecessary Intermediary Costs
- Is Real Estate Investment Difficult Because of a Lack of Comprehensive Capability? Explaining the Three Barriers of Tax, Legal, and Building Expertise
Frequently Asked Questions (FAQ)
Q1. How are management association officers selected?
They are selected at the general meeting from among all association members. The three common methods are self-nomination, nomination by others, and rotation. As long as a person is a unit owner, under a rotation system that person may be required to serve as an officer.
Q2. Are management association officers paid?
In many condominiums, these roles are unpaid, although some management bylaws provide compensation. Please review your management bylaws.
Q3. What should be done if the management association is not functioning properly?
If a majority of members agree, proposals can be submitted and resolved at the general meeting.If the problem is serious, it can also be effective to seek the involvement of an independent professional such as a certified condominium manager.
Q4. Is there any point in voting against an increase in management fees or repair reserve funds?
Yes, there is. Because agenda items at the general meeting are decided by a majority vote of unit owners, active participation and the expression of opinions can lead to better association management.
