Floor space ratios may be relaxed for pre-1981 buildings in Tokyo

The Tokyo Metropolitan Government is considering introducing regulations that would relax floor-space ratios when redeveloping old apartment buildings in the city. This would allow for the additional space to be sold by a real estate developer, which would help to cover the costs of redevelopment.

The target of the revision is condo-style apartment buildings that were built to the old earthquake codes (kyu-taishin). The major change to earthquake codes occurred in May 1981, with buildings built after this date meeting the current codes. Due to the time period from construction to completion, there are some buildings from 1982 that may have been built to the old ‘kyu-taishin’ codes.Read more

by Zoe Ward

Sellers: Your agent is now required to present all offers

From April 1, 2017, real estate agents are now obligated to inform a seller when they receive an offer from a buyer.

The revision to the Buildings Lots and Buildings Transaction Business Act (the law that governs real estate transactions in Japan) now includes a clause stating that a seller's agent must promptly inform the seller, with whom they have an agency agreement with, when they receive a written offer from a potential buyer. Any special clauses in agency agreements to exclude this obligation will be void. In other words, even if a seller has instructed their agent not to present any offers below a certain amount, the agent will still be legally obligated to inform the seller of any and all offers received.Read more

by Zoe Ward

Short-term accommodation hosts to be hit with 180 day limit

The Japanese government is currently in the process of introducing a new law to govern the rapidly growing market of short-term letting of individual homes and apartments, and will be imposing strict rules on hosts. The maximum number of days that a property can be let out is expected to be capped at 180 days a year, while maximum fines will be lifted from 30,000 Yen to 1,000,000 Yen for hosts found to be violating the new law.

Accommodation listing sites may be obligated to impose checks on hosts and remove listings once a property has reached the 180 day limit. Local governments will also have the power to reduce the annual limit even further, even to 0 days a year.Read more

by Zoe Ward

Sublease lawsuits on the rise

Disputes on sublease agreements for rental properties are on the increase across Japan.

A sublease or rental guarantee agreement is where a company, often a real estate agency, leases an apartment building or block of flats from the property owner to sublease out to tenants. The owner is guaranteed a fixed rent each month and does not have to worry about any vacancies, although the rent they receive will be lower than market rates. These sublease agreements are often long-term with periods ranging from 10 to 30 years. While landlords may be promised secure and stable rental income, the contracts often contain clauses allowing the sublessor to reduce the rent or even to cancel the agreement.Read more

by Zoe Ward

Osaka apartment owner fined in court for illegal B&B

An apartment building’s owners association has successfully sued an apartment owner for illegally letting out an apartment to various tourists for short-term stays. The Osaka District Court ruled in favor of the owners association and the apartment owner was ordered to pay 500,000 Yen in restitution.

According to the case, the defendant had purchased a three bedroom apartment in Osaka’s Chuo Ward in late 2007. Between November 2014 and August 2016, they leased the apartment out through a broker on a nightly basis to foreign tourists for approximately 15,000 Yen per night.Read more

by Zoe Ward

Voting ratios relaxed to encourage speedier demolition of earthquake-damaged buildings in Kumamoto

kumamoto-earthquake-1

On September 30, the Japanese government voted in favour of enacting an exemption to the apartment redevelopment law in order to help speed up redevelopment of buildings damaged by the Kumamoto earthquake in April. Under the special exemption, the voting ratio for demolishing an apartment building and selling the land has been reduced to 80% for damaged buildings in Kumamoto. This is the second time the exemption has been applied. It was first applied to three buildings damaged by the 2011 Tohoku disaster in Sendai city.

Ordinarily, 100% of apartment owners must agree before a building can be demolished and the land sold. However, if the building has been seriously damaged in a major earthquake, the ratio can be reduced to 80% if certain conditions are met. Nevertheless, obtaining 80% agreement is still a difficult task.

According to Kumamoto City, 19 apartments buildings were considered to be completely destroyed, 21 suffered major damage, and 52 suffered partial damage in April.Read more

by Zoe Ward

Shibuya ward to relax hotel construction rules

Starting this month, Tokyo’s Shibuya Ward will loosen hotel building restrictions to encourage the development of new hotels to cater to a growing number of tourists.

An ordinance enacted in 2006 to limit the construction of Love Hotels also had an unintended effect of making it difficult to develop business hotels.Read more

by Zoe Ward