In a ruling that could make many real estate agencies nervous, a Tokyo-based real estate company has been ordered to pay 47 million Yen (573,000 USD) to a buyer after it was found that the company lied about the true value of two apartments in order to make the sale. Toshin Partners made false statements about the low-valued properties in order to sell them at a higher value.

In his ruling on March 27th, the Tokyo District Court judge said that Toshin did not present an objective market value and failed to inform the buyer of the disadvantages of the properties. The apartments were purchased by the plaintiff for 50 million Yen. After deducting the 3 million Yen he has already received in rental income, the remaining 47 million Yen must be returned to him by Toshin.

Between February and March 2009, Toshin recommended that the plaintiff purchase two studio apartments in Tokyo’s Ota ward and Yokohama’s Kohoku ward. The company explained that the properties would provide rental income and future capital gain. The buyer purchased under this assumption, but later found out that the value of the properties was just 30 million Yen, not the 50 million Yen that he had paid.

Source: The Mainichi Shimbun, March 30, 2012.

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