Family, Inheritance and legally secured portion

Japanese business start-up consultant

The following contents on this subject of legally secured portions are written in accordance with Japanese civil law.
I will write an outline of the “legally secured portion” in relation to the international law another time.

In my work as a Shihoshoshi Lawyer, I often have opportunities to talk with heirs and relatives about the inheritance procedure for the deceased person’s real property. Because of these experiences, I often think about my life and death through a number of legal proceedings. I don’t think I need to think about this too seriously, but as long as I am a human being, I will die one day, and when I do die, I hope that I avoid conflicts between my heirs as much as possible.

In my opinion, Shihoshoshi Lawyers, who are primarily working on non-conflicting cases and legal administrative matters, have a different perspective from Bengoshi lawyers, who are working on any cases including negotiating legal disputes.

In Japan, when a person makes a will or gifts real property to someone before their death, or divides their estate among the heirs after the inheritance occurs, there is often a problem about the “legally secured portion”.

The “legally secured portion” in Japan acknowledges the right of heirs other than the siblings of a deceased person to get a certain percentage of the estate, if the deceased person’s parent is the only heir, the fixed percentage is one-third of the entire estate. If a child is included among the heirs, he or she will be allowed a legally secured portion, even if the child is an adult. When a spouse or a child (or both) are included as an heir, the legally secured portions is one-half of the entire estate. The individual heir multiplies this entire estate by their individual legal percentage.

It is easy to say “a certain percentage” in words, but it’s hard to know what the extent their estate is at the time of death. Even if the heirs clarify what is the whole estate, if a conflict arises because one of the heirs keeps an excessive proportion of the estate, and they refuse to negotiate, the heir who thinks they have not received what is their right should take action in a court. However, it is not always possible for such an heir to be granted their full entitlement in accordance with their wishes.

In today’s nuclear families, it is common for different generations not to live together when children legally become adults at 20 (at 18 from 1st April, 2022), and there might not be many opportunities for them to see each other if they live separately. However, inheritances will always occur at some point. I think the best way to avoid a conflict is actually to find as many opportunities as possible to keep in close contact, see each other once in a while, and keep the relationship between parents and children alive. I believe that with rights always come obligations. I don’t think looking after parents is an obligation, but I do believe that this responsibility as a child exists to some extent.

Please refer to the article about “Estate and Succession planning – 1-7. Making a will Part 1 & Part 2”

https://akikohorishihoshosilawyer.wordpress.com/2020/06/01/estate-and-succession-planning-1-7-making-a-will-part-1/

I will update every Monday.
For more information

https://lawhelp4u.com/propertyJapan/

Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

Purchase price by the recorded dimensions and by the determined boundary dimensions

Japanese business start-up consultant

In relation to boundaries, a buyer might expect to encounter an Important Disclosure Statement. The Important Disclosure Statement is the legal document that shows all the dimensions of the land that the buyer is buying.

The description on the Indication of Land listed on the cadastre (address, lot number, land classification and acreage) at the Legal Affairs Bureau must be accurate but accurate surveying techniques were not available in 1873-1881. Modern standards of land surveying arrived much later.

Accurate land surveying would have been expensive and the estate agent in charge may sell the buyer real property with a description of the dimensions on cadastre at the Legal Affairs Bureau.

However, the estate agent has a legal obligation to investigate the boundary, which includes to check boundary markers at the place where the real property is located, and make the boundary clear to the buyer before concluding a sales agreement.

If the fact that it is impossible to make it clear by the date is stated, the estate agent should provide the necessary advice.

In the case above, there are 2 options for the buyer.

One is that you draw a conclusion based on the price and dimensions stated on the record.

Another option is to pay the price tentatively at a time of conveyance and hold a survey at the cost of the seller or the buyer, and settle the difference in price between the areas. As the buyer, you can insist the seller should apply for the determined boundary, but the seller might decide not to sell the property.

In general, forest land and farmland are sold by the recorded dimensions as it is too large and too expensive for surveying but even residential land for sale may be sold by the recorded dimensions.

The first thing to recognise is that the transaction may contain a recorded description of the dimensions of the land.

I believe that a good lawyer should listen and give you clear information (verbal and written) to prevent the trouble from happening.

 

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/propertyJapan/

Please keep “Information for registration identification” (登記識別情報) safe.

Japanese business start-up consultant

Occasionally, people who cannot find their “Information for registration identification” are asking how they restore the document.

Information for registration identification is an important document that proves you have the ownership of the real property.
Unfortunately, it is not reissued at the Legal Affairs Bureau.

If there is a risk of theft, there is a procedure of invalidating the PIN code to let the Legal Affairs Bureau know.
However, even after invalidating the PIN code, Information for registration identification is not reissued. That is the system of Japan.

If the document are not found, strict identity verification is required when selling the real property, and the lawyer in charge of the sale will handle it to prove your identity, which normally incur an additional cost. The amount of the cost depends on the lawyer.

One of the best ways to store documents is at home in a safe or file box. If you don’t know which one is an important document, asking in person is the best thing to do.

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/propertyJapan/

Real property in Japan and Highly-Skilled Foreign Professionals

Regarding restrictions on foreign ownership of real property vary from country to country, but Japan is a country which falls into the unregulated category.

Up to now, with respect to the purchase of real property in Japan, the number of people who purchase real property in Japan has steadily increased because of the Tokyo Olympics and the weaker yen.
Popular options are to own apartments or commercial buildings in central Tokyo,  and resort properties in Niseko, Hokkaido.

In Japan, there are no restrictions on non-Japanese purchasing real property regardless of their immigration status, such as permanent residence, nationality, or visa type. The taxation for non-Japanese has no difference from the one for Japanese.

There is no time limit on owning real property, an owner can be freely bought and sold, and can be inherited. However, importantly the inheritance tax or estate tax should be considered.

In principle, there is no visa, such as Tier 1 investor visa (UK) or EB-5 Immigrant Investor Program (US). However, if you have a rental property in Japan with stable income, there is a possibility to be granted permanent residency under the “Highly-Skilled Foreign Professionals” system.

The problem would be a language barrier, but please feel free to contact me in English when buying or selling real property in Japan.

“Highly-Skilled Foreign Professionals”
(高度人材ポイント制)

JPN

http://www.immi-moj.go.jp/newimmiact_3/

ENG

http://www.immi-moj.go.jp/newimmiact_3/en/index.html

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/propertyJapan/

The process of buying real property in Japan

Japanese business start-up consultant

Step 1.
The intending seller appoints a real estate agent and the intending purchaser looks for a suitable property through an agent. The real estate agent can either act for both seller and buyer or just the seller.

 

Step 2.
Once the buyer finds a suitable property, they conduct their own due diligence, including whether the price is fair. The intending purchaser (or agent) sends a Letter of Intent as part of the negotiation of price. This is not legally binding.

I provide consulting services for the purchase and sales of real property in Japan.

I research the registration of both company and property on the official record basis, and report it in English. When required, I research the recent property record from the website below.

Public transaction record is available in English.
https://www.land.mlit.go.jp/webland_english/servlet/MainServlet

 

Step 3.
Once the price and any other conditions are agreed, a Real Estate Purchase and Sales Agreement and an Important Disclosure Statement for the property will be prepared by the seller. Broadly speaking, the parties are free to draw up a contract in any form they choose. The buyer should arrange to have the deposit 10% of the purchase price ready for when the contract is signed.

 

Step 4.
The buyer and seller (or authorised agents) sign the contract, which will specify a date for settlement of the balance of payment. The Important Disclosure Statement will be provided either at this time or some time before settlement.

 

Step 5.
On the Settlement date, the impartial Shihoshoshi lawyer deals with the property rights transfer and the outstanding balance of the purchase price (and any costs) is settled. The seller will also hand over various original documents related to the property. It is also possible for the buyer to appoint their own lawyer

I make sure that the transfer of real property on agreed terms is carried out correctly.

I hope the information is useful.
I will update every Monday.

For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)

https://lawhelp4u.com/propertyJapan/

Tokyo Today : Population Trends in Chiyoda, Chuo and Minato

At the moment, the worldwide economy has been badly damaged by the Covid-19 pandemic. However, as long as people exists, the business never stops.

In the centre of Tokyo, there is always a lively atmosphere because there are many offices and commercial facilities and a lot of people come to work and go shopping in the city. In recent years, the number of residents has been rapidly increasing and it is becoming more active for day-to-day consumption. The graph below shows Population Trends in the three central cities of Tokyo (Chiyoda, Chuo and Minato). The graph is based on the rate of change of population from 2002 to 2019 (Each year is based on October 1st). The total population of Japan was about 126 millions in 2019, in comparison to about 127 millions in 2002, which is about 1% decrease. However the three cities of central Tokyo (Chiyoda, Chuo and Minato) have quite different circumstances. The graph shows the clear difference when comparing three cities with the percentage of Japan as a whole. The main factors are the large supply of apartments at a reasonable cost, combined with every convenience and a well-equipped urban infrastructure.

As such, now is the perfect time to change things for the future investment.

I will update every Monday.

For more information

Japanese business start-up consultant

Shihoshoshi Lawyer

Akiko HORI

http://lawhelp4u.com/propertyJapan/

Estate and Succession planning – 1-7. Making a will Part 2

Japanese business start-up consultant

3. Jurisdiction and applicable law in Succession

 

In Japan, the article 37 of the Act on General Rules for Application of Laws is applied for wills and succession. Article 37 states that the formation and effect of a will shall be governed by the national law of a testator at the time of the formation. Concerning this provision, ‘the formation and effect of a will’ means only matters concerning the transmission of wills, such as the mental capacity, defective evidence of intention, effect of a will or validity of a will. When the will comes into effect at the time of death, the contents of the will, including maintenance obligations arising by reason of death is determined by article 36 of the same law.

Under the Act on the Law Applicable to the Form of Wills, both the governing law of the will (article 37) and the inheritance (article 36) are stated to be the national law, but there is a time gap between the will at the time it was established and the inheritance. If the nationality of the person is different between the time of making the will and at the time of death, the governing law might be different. To avoid the confusion, as a practical matter, a testator can choose which law governs succession to their estate.
In addition, when acknowledging a child or putting an estate in the trust under a will, article 29 (Formation of Parent-Child Relationship with Child Born Out of Wedlock) or article 7 (Choice of Governing Law by the Parties) of the same law is applicable.

As well as the Act on General Rules for Application of Laws, there is the Act on the Law Applicable to the Form of Wills, which was created by ratifying the Convention of The Hague Conference on Private International Law in 1961.
Under the Act on the Law Applicable to the Form of Wills, a formally prepared will becomes valid as long as it complies with the law of the place where the will is established, of the country where the testator has nationality, of the place where the testator had domicile, of the place where the testator had habitual residence or the law of the place where the real property is located.

 

4. Advice

This selective listing of a large number of laws in the Act on the Law Applicable to the Form of Wills allows a statutory will as far as possible, and most wills made under the law of the place where the testator resides will become valid in most of cases. However, in practice, a will which follows the methods of Japanese law is prepared separately in many cases in order to carry out the post-death administrative procedures for Japanese estate smoothly.
It is possible for an individual to make a will for themselves, but that is not without its risks. There might be technical issues that potentially could go wrong. If there are any errors, these could cause problems after the death. I can advise on arrangements for a will, and highlight potential problems that might arise.

I hope the information is useful.

I will update every Monday.

For more information

Japanese business start-up consultant 

Shihoshoshi Lawyer

(Judicial Scrivener)

http://lawhelp4u.com/advice/

http://lawhelp4u.com/propertyJapan/

Estate and Succession planning – 1-7. Making a will Part 1

Japanese business start-up consultant

1. Historical Background

In Japan, since the Middle Ages, the custom was not only for the firstborn legitimate son to inherit most of his parent’s estate, which was generally the case, but also for the eldest girl or youngest son to succeed to and maintain the family business, such as farm fields or business rights.

In the modern era, when an estate was considered as the sum of a person’s assets, the inheritance process was regarded as one of the division of an estate between a small range of close relatives, such as a person’s spouse and their children or parents. Therefore, the principle is that the sum of a person’s assets is distributed equally to the heirs of a certain rank.

As in France and Germany, the Japanese laws have definite rules on who will receive most of a deceased person’s estate, whether there is a will or none, but there is the freedom of making a will.
In addition, there is a system of legally secured portions for certain legal heirs in order to harmonise the legal inheritance rules and the freedom of making a will.

 

2. Legal heirs and the inheritance process under the Japanese law

In Japan, a deceased person’s legitimate surviving spouse will always be their heir, but will only be their sole heir if there are no legal heirs in the first, second or third ranks. Legal heirs in the first rank are the children, lineal ascendants (parents, grandparents, etc.) are in the second rank, and the deceased person’s legal siblings are in the third rank. Heirs of the second rank only inherit if there are no heirs of the first rank, those of the third rank only if there are none of the first two ranks.

If there are several people in the same rank, their portion will be divided equally among all those in the same rank. There is no legal distinction between a biological child or an adopted child or by gender, and even if they become married or adopted, they will still be heirs.

If a deceased person’s child dies before them, and if the child has a child (a grandchild for the deceased person), the grandchild is entitled to inherit and will have the same rank as a living child of the deceased person. Furthermore, if the grandchild also dies before the deceased person, and if the grandchild leaves their child (a great-grandchild for the deceased person), the great-grandchild will be one of the deceased person’s heirs. If the deceased child has several children, they share what would have been their parent’s share equally, and the same principle applies to the children of a deceased grandchild.

If there is no child at all, a deceased person’s lineal ascendant (parents, grandparents, etc.) as the second rank becomes the heir. Amongst lineal ascendants, the heirs will be close relatives (parents will be heirs if there are parents and grandparents). If there are biological parents and adoptive parents, both can be heirs as the same rank.

If there is no lineal ascendant, legal siblings become the heirs as the third rank. Legal siblings mean children who have shared at least one parent in common either by blood or adoption. However, if the legal siblings have shared only one parent in common, their share in the inheritance is one half of the share of a sibling who shares both parents. In addition, in this case, if the siblings who are supposed to be the deceased person’s heirs die before the deceased person, only their child (the deceased person’s nephew and niece) can succeed the third rank of heirs, and not the nephew’s or niece’s child.

If it is not clear who is a deceased person’s heir, the family court will conduct a legal procedure. Under this procedure, an executor for the succession who is appointed by a family court, and will search for the deceased person’s heirs under the family court’s supervision, and deal with matters of succession. If no heirs can be found, the deceased person’s estate may be distributed to those who have physically lived together with the deceased person, such as de facto partner or children, or the family court may consider special circumstances respectively. If there is still any remaining estate, it will become national assets.

An estate consists of various assets such as money, land, movables and loan claims, and the methods of division amongst their heirs is called the inheritance division. If the deceased person determines the method of this division by their will or entrusts their assets to a third party, the division will be followed by the method chosen. If there is no such determination, their joint heirs will decide the method. If no agreement amongst heirs is possible, a family court will be involved. The family court carries out the inheritance division in consideration of the type and nature of the estate, rights relating to the assets and any other circumstances.

To Be Continued.

I hope the information is useful.

I will update every Monday.

For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/propertyJapan/

Japanese property system – Post-completion

Japanese business start-up consultant

After completion of the registration of the ownership:Post-completion

1.  Certificate for Registration Identification(登記識別情報)

When the Legal Affairs Bureau has completed the registration of the ownership, a Certificate for Registration Identification is given to a person entitled to register it.
This document identifies who is a rightful legal owner and as a proof of ownership, the PIN code is provided.

The PIN code shall be specified based on a combination of Arabic figures and other numbers for each real property and an applicant who has become a registered right holder.
The PIN code is sealed because it is strictly personal and it has never changed by a person.

Before 7th March 2005, Registration Identification was a stamp which was sealed by the Legal Affairs Bureau but the PIN code replaced now.
However the Identification document already issued is still valid and it is needed in case an owner of the real property sells the registered property.

 

2.  Registration system

The Registered ownership is a continuous record showing when the real property was first registered and all later purchases and sales, changes, division of the real property and so on. Now the system is computerised and the data is restored in the back-up computer system from time to time, so that to see all registration records, keeping track of the registered record is needed.

Property registration shall be made with regard to a physical description of real property or with regard to the following rights relating to the preservation, establishment, transfer, alteration, or extinction of a right.

1. Ownership
2. Superficies (Surface rights)
3. Farming right
4. Private easement (Servitude)
5. Priority privilege (Statutory lien)
6. Pledge
7 Mortgage
8. Lease
9. Mining right (Right of quarrying)

Lease right can be registered but traditionally and historically many owners of the land in Japan are not willing to register Lease right at the Legal Affairs Bureau and Lease right for the purpose of building ownership is governed by Act on Land and Building Leases. Practically the owner of the land and Lease Right holder are following the Act.

 

3. Notice of the acquisition tax

The tax payment notice of the acquisition tax takes time to be delivered to the registered owner. It generally takes about 4 to 6 months after the completion. The notice is issued from the local tax authority, which has jurisdiction over the area where the real property is located. The owner makes the payment at bank.

 

I hope the information is useful.

I will update every Monday.

For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

How to Buy a property in Japan

Japanese property system – Real property transaction

Japanese business start-up consultant

In Japan, it is common and legally permitted for one estate agent to represent both a purchaser and a seller in the conveyancing process. It is called ‘Dual agency’.The whole responsibility of explaining the disclosure statement, such as Seller’s Property Information Form for the property is placed on an estate agent. Real Estate Brokerage Act regulates this.

1. Letter of Intent (LOI) (不動産購入申込書)

A letter of intent is prepared by a buyer to begin negotiations with a seller in real property transaction.
The document generally states the intentions, purchase price and the property details but payment terms and a date for an agreement is decided after consultation from the estate agent in charge. This procedure does not legally bind the buyer to buy the real estate.

2. Sale and Purchase Agreement and Property Information Form (売買契約書及び重要事項説明書)

A Sale and Purchase Agreement is a legally binding contract that is a valid agreement between the buyer and the seller of the real property.

Property Information Form is for the seller to give the detailed information about the real property, such as registered rights, the name of the owner, restrictions based on the law, regulation and so on.

The buyer generally delivers earnest money to the seller at the time of the agreement. The buyer may cancel the agreement by forfeiting his/her earnest money or the seller may cancel it by reimbursing twice its amount, until either party commences performance of the agreement. When the transaction is finalised, the earnest money is put toward the sales price.

3. The legal transfer of the real property (Conveyancing) (決済)

On the day of settlement, the buyer pays the remaining sum and other expenses, and then receives the keys and documents that come with the real property.
The Shihoshoshi lawyer takes a Registration Form to a Legal Affairs Bureau.

In Japan, property transaction will take effect only to the extent of the parties’ intention, which means property registration follows the principle of contract registration. The buyer needs to register his/her right in order to assert such a right to a third party but the registration is not indefeasible as it can be altered or cancelled, unlike registration systems in some countries, such as the Torrens system. However, in practice, there are few cases in which the registered rights are invalid and safety of transactions is impaired.

I hope the information is useful.

I will update every Monday.

For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

How to Buy a property in Japan