Revision to condominium redevelopment law could unlock potential development sites
A revision to the Act on Facilitation of Reconstruction of Condominiums is scheduled to be introduced from December that will reduce the voting ratio to sell a building and land. For buyers of brand new apartments, this news might seem insignificant, but this new amendment could influence the supply of new apartments in the future.
The Act was introduced in 2002 to encourage the redevelopment of old apartment buildings. Currently, a minimum of 80% of apartment owners must agree in order for a building to be reconstructed. For a building and land to be sold, however, the current act requires 100% of owners to be in agreement. The revision in December will reduce this to 80% for buildings built before 1981 to the older earthquake codes (called ‘kyu-taishin).
Of the 5,900,000 apartments across Japan, 1,060,000 (20%) are in ‘kyu-taishin’ buildings.
The number of condominium redevelopments in Japan is quite small. According to the Ministry of Land, Infrastructure, Transport and Tourism, there were only 183 buildings containing 14,000 apartments nationwide that were redeveloped as of April 2013.Read more