[Beginner's Guide to Apartment Management] Long-term Repair Reserve? Maintenance Costs?... Explaining Management Fees You Don't Understand

'Janggi Suseon Chungdanggeum' Saved for Major Repairs
Tenants Should Get It Back from Landlords When Moving

'Suseon Yujibi' for Repairs Used as Needed
Paid by Tenants Who Actually Reside, Not Landlords

'Seonsu Gwanlibi' Management Fees Collected in Advance
Even Small Amounts Must Be Recovered from Buyers When Selling the House

[Asia Economy Reporter Lee Chun-hee] When you become a real estate reporter, you sometimes get unexpected KakaoTalk messages from friends. "How do I apply for a housing subscription?" "What does first priority mean?" For the 2030 'Burin-i (real estate + beginner)' who only have subscription savings accounts created by their parents when they were young, I am going to create a guide.

Recently, a court ruling caused a stir on the internet. It was the first trial ruling of a lawsuit filed by a resident of an apartment in Mok-dong, Yangcheon-gu, Seoul, against the residents' representative meeting. The resident filed a lawsuit arguing that since the apartment has no underground parking lot and they live on the first floor, they never use the elevator, so they cannot accept the increase in the 'long-term repair reserve fund' (Jangchunggeum) to replace the old elevator, citing the burden of replacement costs.

In response, the court accepted the resident's argument, stating that "the claim that it is unfair to impose the Jangchunggeum equally has considerable persuasiveness," and ruled in favor of the plaintiff, ordering that residents on the first and second floors should bear the elevator replacement costs differently.

The Jangchunggeum is usually one of the items included in the maintenance fees paid when living in an apartment. While items like electricity and water charges in the maintenance fees are easy to understand, many people pay items like Jangchunggeum without fully knowing the reasons. Today, for such Burin-i, I will explain the reasons for each maintenance fee item.

Looking at the maintenance fee statement above, some items are easy to understand, while others are confusing. First, items like cleaning fees, security fees, disinfection fees, and heating fees are maintenance fee components whose purpose is clear just from their names. However, even here, the details may vary slightly depending on the operation method. Items like cleaning, security, and disinfection fees are recently mostly provided through service contractors. Therefore, the service fee may be divided monthly and by household, but if the management office directly employs staff, the fees include labor costs, uniforms, and supplies used directly for cleaning, security, and disinfection activities.

The most confusing fee is undoubtedly the Jangchunggeum. As mentioned earlier, Jangchunggeum is money saved over a long period (long-term) for repairs (repair) to prepare funds (reserve) needed for replacing, repairing, or maintaining major apartment facilities such as elevators, plumbing, and painting. Since repairing these facilities requires a significant amount of money, instead of charging all at once, it is a kind of savings accumulated to be used when necessary.

By law, apartments with 300 or more households or multi-family housing with elevators must accumulate Jangchunggeum. Failure to do so results in a fine of up to 5 million KRW. Since it is money saved for repairing aging facilities, it is accumulated monthly starting one year after the completion inspection date, so newly built apartments either have no or very small Jangchunggeum charges. On the other hand, apartments that have reached the reconstruction age limit (30 years) may have substantial Jangchunggeum charges.

In principle, the owner must pay the Jangchunggeum. However, if the owner does not live there and rents it out, it is difficult to charge the owner directly, so the fee is charged to the actual resident along with the maintenance fee. In this case, the tenant pays the Jangchunggeum on behalf of the owner. Therefore, when moving out of a rented house, tenants must ensure to get reimbursed by the owner for the Jangchunggeum they paid.

On the other hand, 'repair and maintenance fees' are also used for repairs but differ from Jangchunggeum in that residents have the obligation to pay them. Since these fees are used for facility repairs and maintenance of common areas, unlike Jangchunggeum which is charged only to owners, repair and maintenance fees are charged to actual residents, whether owners or tenants. They mainly cover costs such as light bulb replacement, cleaning of common heating and cooling facilities, and water quality inspection fees.

There is also a maintenance fee to be handled when selling a house called 'prepaid maintenance fee.' It means maintenance fees paid in advance. When initially moving in, the management office holds about one to two months' worth of maintenance fees in advance to prepare for vacant units or vacancies. Unless the apartment is reconstructed or demolished, prepaid maintenance fees cannot be refunded. Therefore, when selling a house, the seller should claim this fee from the buyer and transfer this right to the buyer.