What is the reserve fund for repair?

Repairing common areas of condominiums often requires a great deal of money, and collecting expenses collectively when performing repair work is a heavy burden for section owners. In addition, consensus building may be difficult, and in the worst case, the necessary construction may not be possible due to lack of funds.
In order to avoid such a situation, the “repair reserve fund” is a long-term plan to reserve the costs required for repair work expected in the future.
The amount of the repair reserve must be set based on the "long-term repair plan" so that sufficient funds can be provided at the time of planning.

The amount of the repair reserve fund varies depending on the size of the building, the content of the equipment, the number of years elapsed, etc., but the “Guidelines on Reserve for Repair of Condominiums” formulated by the Ministry of Land, Infrastructure, Transport and Tourism provides an estimate of the amount.

（Ａ＋Ｂ＋Ｃ）÷Ｘ÷Ｙ
Ａ： Balance of repair reserve at the beginning of the plan period (yen)
Ｂ： Total amount of repair reserve funds collected during the planning period (yen)
Ｃ： Total amount of transfer from dedicated usage fees, etc. throughout the planning period (yen)
Ｘ： Total floor area of condominiums (m2)
Ｙ： Plan period (month) of long-term repair plan

Please also use this calculation sheet to calculate the average amount.

Monthly repair work costs per unit of mechanical parking lots (see table below) x number ÷ Total floor area of condominiums (m2)
※If maintenance and repair costs for parking lots and parking fees are accounted for separately from management fee and reserve funds, repair costs for mechanical parking lots will be covered by parking lot usage fees. If so, you do not need to add them.

The reserve method for repair reserves includes a method in which the total amount of repair work costs planned in the long-term repair plan is equally accumulated during the planning period (equivalent funding method), as well as a gradual reduction in the initial reserve amount. There is a method of raising the amount (stage increase funding method).
According to the “Comprehensive Survey of Condominiums in FY2018” conducted by the Ministry of Land, Infrastructure, Transport and Tourism, the adoption ratio of the reserve fund for repair of entire condominiums was 41.4% for the “Equal Reserve System” and 43.4% for the “Step Increased Reserve System”. I am. According to the guidelines of the Ministry of Land, Infrastructure, Transport and Tourism, from the viewpoint of securing stable reserves for repairs in the future, an equal funding method is desirable, but the proportion of new condominiums in the completion year adopts a gradual increase funding method. Is increasing.

Generally, when selling a condominium, the condominium company indicates the amount of the repair reserve to the condominium purchaser, but the condominium purchaser does not necessarily have sufficient knowledge of the repair reserve, etc. The reserve may be set low.
The step-up funding method is based on an increase in the reserve fund for repairs in the future. In the event of an increase, consensus among the section owners may not be formed and the reserve for repairs may be insufficient.
Materials and equipment used in condominiums will change with the times in line with social changes and technological improvements. In addition, the details of repair work, construction methods, repair cycles, etc. will also change with the progress of new construction methods and technological development.
Regardless of what kind of funding method is adopted, it is necessary to periodically review the long-term repair plan and re-establish the reserve fund based on it.

Condominiums become older, and repair costs increase due to aging of buildings and equipment. In addition, due to the aging of division owners, it is possible that the burden of increased repair costs will be difficult. Therefore, it is desirable to complete the increase as soon as possible with regard to the step-by-step funding scheme.
The Ministry of Land, Infrastructure, Transport and Tourism has shown the following approach to the appropriate increase in the step-by-step funding system with the aim of completing the early increase in the repair reserve fund by raising the feasibility and guiding it to the equal funding system. I am.

The amount collected per month in the stage increase funding method is based on the amount per month when the equal funding method is used as the base amount, the initial amount of the plan is 0.6 times or more of the base amount, and the final amount of the plan is 1.1 times the base amount Within.

0.6×D ≤ E and 1.1×D ≥ F
※Ａ： Total amount of repair reserve funds collected during the planning period (yen)
　Ｂ： Total floor area of condominiums (m2)
　Ｃ： Plan period for long-term repair plan
　Ｄ： Average amount of reserve for repair per month for the entire planning period = A / B / C (yen / m2 / month)
　Ｅ： Minimum amount of reserve for repair per month for the entire planning period (yen/m2/month)
　Ｆ： The maximum amount of reserve for repair per month for the entire plan period (yen/m2/month)
The review of long-term repair plans in light of rising construction costs, etc. does not limit the significant increase in the current repair reserve amount for proper management.

Please see here for the long-term repair plan.
What is the Long-Term Repair Plan?