Japan's New "Domestic Manager" Rule: What Foreign Property Owners Need to Know

On April 1, 2026, Japan's revised Act on Building Unit Ownership (区分所有法) officially took effect — the most significant overhaul in decades. Among the many changes, one new rule stands out for foreign investors: the Domestic Manager (国内管理人) system.

Why This Law Was Created

Japan's condo stock has been growing for 70 years. Today, there are roughly 7.13 million units nationwide — home to more than 10% of the population. But two problems are converging:

• Aging residents — many original owners are now elderly or deceased, leaving units unattended
• Aging buildings — over 1.48 million units are more than 40 years old, and that number will triple in 20 years

At the same time, the weak yen has attracted a wave of foreign buyers. In Tokyo, 3% of new condo purchases are now made by overseas buyers. In major urban areas, the ratio reaches as high as 19%. Condo associations are struggling to function when a growing share of owners live abroad and cannot attend meetings, vote on resolutions, or respond to management requests.

What Is the Domestic Manager System?

The new law allows condo associations to require overseas owners to appoint a 国内管理人 (kokunai kanrinin) — a domestic manager based in Japan who acts on their behalf. The domestic manager can:

• Attend and vote at owners' association meetings (管理組合総会)
• Pay management fees (管理費) and repair reserve funds (修繕積立金) on time
• Handle day-to-day management communications with the building management company
• Represent the owner in building-related decisions

Who Can Be a Domestic Manager?

Here's the good news: there are no special qualifications required. Unlike some legal roles in Japan, the domestic manager does not need court approval or a professional license. Any individual or legal entity with a Japanese address can serve in this role — including property management companies.

Why This Matters for Foreign Investors

If you own a condo in Japan and live overseas, this new rule means:

• Your condo association may formally request you to designate a domestic manager
• Without one, you risk being excluded from important decisions about your building
• Unpaid fees or ignored notices can lead to penalties or even legal action by the association
• Having a reliable domestic manager protects your investment and your reputation as an owner

This is separate from — but closely related to — the tax representative (納税管理人) requirement. While a tax representative handles your tax obligations, a domestic manager handles your condo association obligations. Many overseas owners will need both.

Other Key Changes in the 2026 Revision

The domestic manager system is just one part of a broader set of reforms:

• Easier special resolutions — the voting base has shifted from "all owners" to "attendees only," making it far easier to pass major decisions like renovations or rebuilding
• Absent owner management — courts can now appoint managers for units whose owners are untraceable, allowing associations to manage or even dispose of abandoned units
• New exit strategies — beyond traditional rebuilding (only 323 cases in 70 years), new options for managed dissolution are being explored

How Japan YES Can Help

Japan YES Property Management is already set up to serve as your domestic manager. We handle:

• Condo association communications and meeting attendance
• Management fee and repair fund payments
• Tax representative duties (納税管理人)
• Mail scanning, translation, and forwarding

One point of contact for all your Japan property obligations — so you can invest with confidence from anywhere in the world.

View our plans or contact us to learn more.