Osaka required disclosures | Legal Guide

Unlike some markets where a lease is signed with a quick handshake, Japanese real estate law imposes an incredibly formal and heavy burden of disclosure on the landlord and their representatives (licensed brokers). Governed primarily by the Building Lots and Buildings Transaction Business Act (Act No. 176 of 1952), which came into effect on August 10, 1952, the system protects tenants by forcing the absolute disclosure of all physical, legal, and "psychological" defects of a property before any contract is signed or money changes hands.

The Article 35 Document (Important Matters Explanation)

Under Article 35 of the Building Lots and Buildings Transaction Business Act (Takken Gyo-ho), a leasing transaction cannot be finalized until a state-licensed Real Estate Notary-known as a Takken-shi-formally sits down with the tenant and reads through a highly detailed legal disclosure document (the Juyo Jiko Setsumeisho).

The Takken-shi must show their official photo ID and explain, face-to-face (or via a highly regulated video call structure known as "IT Jusetu"), the intricacies of the property. The tenant must sign this document acknowledging they understand the risks before they are even allowed to view the final lease agreement.

Mandatory Disclosure Categories:

1. Title and Rights: Does the landlord actually own the unit? Are there any massive mortgages or foreclosures pending?
2. Infrastructure: The state of the electricity, gas, water, and sewage connections.
3. Zoning and Structural Limits: The zoning type (e.g., Category 1 Residential) and any building restrictions.
4. Financial Terms: Explicit breakdowns of security deposits, key money, cancellation penalties, and renewal fees.
5. Building Rules: Specifically in Osaka condominiums, any strict HOA (Management Association) rules regarding pets, musical instruments, or garbage disposal must be detailed.

If a landlord or broker hides a critical flaw that is later discovered, the tenant can legally invalidate the contract under the Consumer Contract Act and sue for full restitution of all move-in costs.

Natural Disaster Disclosures (Hazard Maps)

Following severe flooding events in Japan, the national government legally mandated a new disclosure requirement in 2020.

During the Article 35 explanation, the Takken-shi must present the tenant with the official Hazard Map (Hazado Mappu) issued by the local Osaka municipality (e.g., Minato-ku, Kita-ku, or Chuo-ku). They must physically point exactly to where the apartment building is located on the map and disclose:

• Flood risk from nearby rivers overflowing.
• Inland flooding risk (poor drainage during heavy typhoons).
• Tsunami risk zones (for Osaka Bay areas).
• Landslide risk areas.

Stigmatized Properties (Jiko Bukken)

Perhaps the most unique and legally precarious disclosure in Japan revolves around "Psychological Defects" (Shinriteki Kashi)-commonly referred to as Jiko Bukken or "Accident Properties."

In Japanese culture, properties where a death has occurred carry a heavy stigma, severely reducing their rental value. In 2021, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) released official guidelines establishing clear rules for disclosure for residential rental properties:

What MUST Be Disclosed:

• Suicides, Murders, or Suspicious Deaths: If a suicide, murder, or suspicious death occurred inside the apartment unit (or in common areas like the lobby or elevator), this must be actively disclosed to the next prospective tenant. The disclosure obligation generally applies for 3 years following the incident.
• Undiscovered Natural Deaths (Kodokushi): If a natural death occurred that remained undiscovered for a significant period, resulting in bodily fluids seeping into the property and requiring special cleaning (e.g., decomposition or biohazard-level cleanup), this is treated similarly to a suicide and must be disclosed to the next prospective tenant. The disclosure obligation generally applies for 3 years following the incident.

What Does NOT Need to Be Disclosed:

• Immediate Natural Deaths: If a tenant dies peacefully of old age or illness and the body is removed promptly without damaging the room or requiring special cleaning, there is no psychological defect, and the landlord is not required to disclose the death to the next tenant.
• Accidents in Daily Life: Deaths resulting from minor household accidents (e.g., falling down stairs, drowning in a bathtub) do not generally trigger a disclosure obligation, unless they remained undiscovered for a long time, leading to conditions requiring special cleaning.
• After the Disclosure Period: For rental properties, the disclosure obligation generally expires after three years or after the first new tenancy following the incident. After this period, disclosure is generally no longer mandatory, unless the event remains widely known or was unusually severe.

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