As many as 20 buyers of apartments in the Harumi Flag (Athlete’s Village) project have filed a petition for conciliation with the Tokyo District Court seeking compensation due to the delayed move-in date.

In late June 2020, the buyers received notice from the developers that the handover of the apartments would be delayed 12 months as a result of the postponed Summer Olympics. The buyers allege that they had requested an explanation from the developers but were refused. They also allege that they were refused any financial compensation for out-of-pocket expenses such as additional rent, as a delayed delivery due to the games postponement was not considered a legally compensable factor.

The public relations representative for the sales office said they were providing the necessary information as it was needed. Although they have no plan to hold a group explanation session, they are making the time to explain the situation to buyers on an individual basis. They were unable to comment on compensation as it depends on the contents of each contract of sale. 

Harumi Flag is the name of the apartment complex that is scheduled to house athletes during the Summer Olympics, after which the apartments will be refurbished and delivered to buyers. Sales began in August 2019 with 1,543 applications made on the 600 apartments initially offered for sale. 

The village sits on a 44-hectare site on the manmade island of Harumi in Tokyo Bay. The project will eventually contain 5,632 apartments in 24 buildings, of which 4,145 will be made available for sale. 893 apartments had already been sold when sales were put on hiatus in March 2020.

Pre-covid, the apartments had a scheduled delivery of early 2023. Now, it may be likely to take place sometime in 2024. Buyers who did not want to wait were given the option to back out, with their deposit returned in full. Normally, if a buyer walks away after signing a contract they may forfeit their deposit. However, if the seller was to cancel, the seller would have to return the deposit and potentially pay an equivalent amount as a penalty. In a case a few years ago where a new apartment building had to be demolished and rebuilt, the developer offered to pay buyers three times their original deposits as compensation. A pandemic-caused delay, however, might be considered force majeure.

Source: The Asahi Shimbun, January 30, 2021.