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Articles
Real Estate Due Diligence in Japan
Updated on Thursday 21st December 2017 Rate this article
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Prior to purchasing a real estate in the country, the most important action that an investor should take is to perform an accurate property due diligence in Japan. Foreign entrepreneurs have various options related to this due diligence when checking the real estate they are about to buy. Our company formation consultants in Japan can assist you in effectuating the necessary due diligence to ensure that the property you are about to purchase will prove to be a sound investment.
What should an appropriate real estate due diligence in Japan contain?
When effectuating a real estate due diligence, our company registration agents in Japan generally verify the following aspects:
• The title confirmation, boundary confirmation, planning and land utilization aspects, lease terms and other important agreements like trust agreements, agreements of co-owners and management rules for sectional ownership;
• A physical or environmental research, after which an engineering report or an environmental one is issued;
• A valuation, in which an appraisal report is issued.
The title confirmation for a property in Japan is generally effectuated by verifying the Property Registry.
Due diligence barriers in Japan
In effectuating a real estate due diligence in Japan, to generate property securities which satisfy the investor needs, the sources, amounts of real estate revenues, operating expenses, as well as financial and other costs have to be researched in the preliminary registration statements, approved prospectuses and marketing material.
Japanese property owners and borrowers are used to a financial privacy. Due diligence in property finance in Japan needs financial information which is not usually offered by real estate owners, property managers or lenders. Our Japan company formation advisors can provide further details on this matter, as well as assistance in setting up a company in Japan.
Japanese lenders generally do not underwrite loans based on property collateral offered, but based on the credit status and keiretsu (set of companies with interlocking business connections and shareholdings) standing of the borrower.
If you would like to know more about the property due diligence procedures in Japan, or if you need help in opening a business here, please speak to our friendly company formation representatives in Japan.
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