More detailed governance for management-company managers
MLIT revised its guidelines on April 1 for condominium buildings using external managers. Unlike traditional associations where an owner serves as chair or manager, an outside organization such as the property-management company can assume the management role. The updated guidance covers the process for introducing the structure in existing and new buildings, procedures for transactions involving possible conflicts of interest, and controls over bankbooks, seals and other financial-management tools. The model has gained attention as owners age and fewer residents are willing to serve on association boards.
Overseas owners should pay particular attention to governance
External management can be convenient for owners living abroad who cannot regularly attend board meetings, but concentration of authority can also create governance risks. Buyers should identify who acts as manager, review the management-services agreement, understand who controls association bank accounts and determine how major repair contracts or related-party transactions are approved. The MLIT guideline is not a substitute for legislation, but it provides a practical benchmark for evaluating whether a condominium's management structure is appropriately designed.