No disclosure requirements for natural deaths, MLIT

On October 8, the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) announced the new guidelines for disclosing stigmatized properties to future tenants and buyers. Up until this point, there have been no clear rules on when or what to disclose to a potential occupant, leaving it up to the real estate brokers to follow their own practices. This has been a frequent cause of trouble and confusion.

Disclosure is not required in the following scenarios:

(1) Rental and sale transactions:

 If a natural death or accidental death from everyday life occurred in the property to be rented or sold.

Natural death might refer to death from old age or a chronic illness. Approximately 90% of home deaths fall under these causes. There are past precedents where courts ruled that natural deaths are not considered property defects. 

Accidental death might refer to someone falling down the stairs, drowning in the tub, choking during eating, and other unforeseen accidents resulting from normal day-to-day activities. They are considered the same as natural deaths and do not need to be disclosed by real estate brokers. 

However, if the body was not discovered for a long time and decomposition meant that the property required special cleaning, or large-scale renovations, the real estate broker is obligated to inform the tenant or buyer as it could have a big impact on whether they want to proceed with the contract signing.

(2) Rental transactions only:

If an unnatural death occurred (not one that meets the above (1) conditions) in the building’s common area (balconies attached to that apartment, and shared spaces such as hallways, elevators, stairs etc) that is normally used by residents, and three years have passed since the incident, there is no obligation to inform future tenants.

(3) Rental and sale transactions:

If an unnatural death occurred (not one that meets the above (1) conditions) in an adjoining apartment or in the building’s common area that is not normally used by residents, there is no obligation to inform.

Cases where brokers are still obligated to disclose past deaths:

  • If it was a particularly well-known incident, one with foul play, or one that has had a particularly strong impact. The above scenarios (1), (2) and (3) are not exempt in this case.
  • If the incident is considered to have a considerable impact on the decision-making of the party (above scenarios (1), (2) and (3) are exempt).
  • If the tenant or buyer inquires about the existence of any of these circumstances, regardless of the time that may have passed or the circumstances of the death. Or, if the circumstances of the incident are considered to be significant enough that they should be relayed to the tenant or buyer.

When informing, the disclosure must include the date of the incident, location, cause, and if any special cleaning was carried out.

If it is a situation that requires protecting the family’s privacy, it is not necessary the provide the name, age, address, family structure, and detailed information on the circumstances surrounding the death or conditions of the body’s discovery.

Investigation obligations for the real estate broker

How much investigating is a real estate broker obligated to do in order to determine whether a property is stigmatized or not? The broker is only required to inquire with the buyer, landlord or management company, and this is usually done via the disclosure form of any known defects in the property that sellers and landlords fill in when listing with a broker. Brokers are not required to interview neighbors, check with the police, conduct internet searches, or carry out any further investigations.

Why? There are concerns over how to verify the accuracy of some of this information, especially neighborhood gossip and online commentary. Trying to verify this information falls outside of the scope of a real estate broker’s job – they’re not private investigators.

However, if a real estate broker does come across any history of incidents, they are obligated to disclose the information if it meets the requirements. 

Warning: Residential only

These disclosure guidelines only apply to properties to be used for residential purposes. They do not apply to office or commercial occupancies. 

Future scenarios

The MLIT is currently considering adding future guidelines for situations where the building has since been demolished and the transaction is for the land only, how to handle cases where the deceased was pronounced dead at a hospital, and so on.

Source:  MLIT Press Release, October 8, 2021.

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