Property management companies in Japan are refusing to renew or are abruptly terminating service contracts with small-scale condominium associations [1, 2].
This trend threatens the stability of residential living for thousands of owners. Without professional management, resident-run boards must handle complex maintenance and legal obligations for aging buildings they are often unqualified to manage.
Industry reports indicate that rising labor and material costs have made small buildings financially unattractive for firms [1, 3]. A shortage of qualified staff further compounds the issue, prompting companies to prioritize larger, more profitable contracts over smaller ones [1, 3]. This shift has left many small-scale apartment-type condominiums across Japan in a state of crisis [1, 4].
Resident associations are facing immediate financial pressure. Some condominiums have received proposals to increase management fees within just two years [5]. These sudden hikes often come as a prerequisite for the company to continue its services, or as a final warning before a contract is severed.
Small-scale buildings are particularly vulnerable because they lack the economies of scale found in larger complexes. When a management firm exits, the resident board is left to source new vendors for cleaning, security, and structural repairs. In many cases, these boards consist of elderly residents who lack the technical expertise to oversee major renovations.
To address the gap, new industry solutions are emerging. A new external-manager service specifically designed for condominium boards is scheduled to officially start in February 2026 [6]. This service aims to provide the professional oversight that small associations lose when traditional management firms withdraw.
Despite these new services, the underlying economic pressure remains. As the cost of building materials continues to climb, the financial burden of maintaining aging urban infrastructure falls more heavily on the individual homeowners [1, 3].
“Management companies are refusing to renew or are abruptly terminating service contracts with small condominiums.”
This crisis reflects a broader systemic issue in Japan's urban landscape: the collision of an aging building stock with a shrinking labor force. As professional firms pivot toward high-margin assets, small-scale homeowners face a 'management vacuum' that could lead to building degradation and decreased property values if external-manager services cannot scale quickly enough to fill the void.
