A “jiko bukken” is a property where the former occupant died of unnatural causes, such as suicide, murder, fire or neglect. They can be rented or purchased at very low prices, provided you are okay with the ‘history’ of the home or apartment. There are a growing number of individuals and companies that specialize in purchasing these properties at huge discounts, and either renting them out of re-selling in the future. In the case of a house, the house may be demolished and the land re-sold.

The law regarding the rental or sale of a “jiko bukken”

Under the Real Estate Transaction Law, the real estate license-holder has a legal obligation to inform the tenant or buyer of any known unnatural deaths that occurred in the property. The details of the accident must also be explained in the “Important Details and Particulars” document that is signed at the time of contract.

For properties for sale, although the law is not specific about time lines, it is generally assumed that the agent will inform the buyer if the death occurred within the past 10 years. To be on the safe side, some agents will inform buyers regardless of how many years have passed.

For properties for rent, the real estate agent is obligated to inform the very next tenant who moves into the property after the incident, but there is no obligation to inform any future tenants. Some less-than-ideal real estate agencies may rent the apartment to one of their staff for a short period before re-listing the apartment at the full market price.

For a death by natural causes (with the exception of the body not being discovered for a long period of time), in some cases this may not be considered a psychological defect to the property and may not be disclosed.

If the incident occurred in a different apartment within the same building, there is no obligation to inform the tenant or buyer. However, if the death did not occur within an apartment but was caused by someone jumping from a high floor, agents tend to inform all new occupants in order to avoid any troubles from arising.

What if this information is not disclosed to the tenant or buyer?

If the seller/landlord or real estate agent intentionally omits this information from the rental or purchase contract, the contract may be nullified (there have been court cases where the contract has been voided). In almost all cases where the agent has been taken to court because of concealing the history of the property, the court has ruled against the real estate agent.

The risk of being caught is high, and legitimate real estate license holders follow the law very seriously so the chance of being tricked into renting or buying a ‘jiko bukken’ should be very low if you go through a proper real estate agent.

Pros:

These types of properties be rented or bought at a very cheap price. The discount will be greatest for properties that were the scene of a violent crime or incident, and properties may sell for less than 1 / 4 of the market price. There is always a reason why a property would be priced below the market price, so if you find a property for rent or sale that is priced far below market prices, give the agent a call and ask if it has any ‘history’. If it is not due to a death, then other possible reasons include having several shared owners, a property with ownership disputes, or a building with construction faults or no building certificate.

If you are buying as an investor, you may be able to buy the apartment for a reduced price, find a tenant at a discounted rate for a short period, then increase the rent for the following tenant.

Cons:

Such properties may not advisable for those who are concerned about ‘uninvited guests’ or believe in the supernatural.

An important note is if you are applying for a mortgage, the bank will consider your ability to repay the loan as well as the value of the property. If it is a ‘jiko bukken’, the bank will assign a low value to the property so it may reduce the amount they are willing to lend.

You may have trouble re-selling the property again in the future, even if many years have passed, particularly if the incident was in the media and the if neighbors like to gossip.

How to find out if your property has a ‘history’

The easiest and fastest way is to ask the real estate agent. However, there could be a chance that the seller has not told the truth to their agent. There have even been cases where a murder has occurred on the property without the owner’s knowledge.

You may also try asking the neighbors.

You could try asking the building’s management company, but in our experience they are not legally obligated to inform of any incidents.

You can also check the popular Oshima Teru (www.oshimaland.co.jp) website, but please be advised that this site is not official and does not cover every property and every incident.

Real estate agents are severely punished for intentionally omitting these facts from contract documents. Punishments range from fines to the loss of a company’s license, so the larger and reputable agencies are likely to be upfront about stigmatized properties.

Looking to rent a ‘jiko bukken’?

If you are specifically looking to rent a ‘jiko bukken’, the public housing “Urban Renaissance Agency” (UR) have a special list of properties where the former tenants have died in the apartments. The rent for these apartments for first 1~2 years following the death is half price, after which it reverts to the original rent. The list of half-price apartments can be viewed here:

– Kanto (Tokyo etc): http://www.ur-net.go.jp/kanto/tokubetsu/

– Kansai: http://www.ur-net.go.jp/kansai/tokubetsu/

For Landlords

If a tenant dies in one of your managed apartments, you must bear any necessary cleaning costs and will also suffer further financial damage through having the market rent of your property significantly reduced. In 2010, Ace Group introduced a “Rental Management Risk Guard” insurance policy that provides compensation in the event of the above. Ace also provide services in English. Associa Insurance also provides a similar policy whereby they will pay for cleaning and may cover the rent for the next 6 months following the death.

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