The property market in Japan has its own peculiarities, which may seem strange to those unfamiliar with how it works. In order to make the process more transparent for our clients, we have set out in this article to explain in detail how it works and how long it takes to acquire a property through the auction system in the Land of the Rising Sun.
As our clients already know, Japan has a number of protocols that are often far removed from those in our own countries. One of these is the property auction system, a detailed system with several stages and precise deadlines. Once a client has decided to purchase a property through the auction system, it is important that they are aware of the whole process to avoid any problems arising during the procedure. The auction process in Japan is described below.
Day 1: Submission of documents and payment of the deposit
The auction process starts with the submission of documents and the payment of the deposit, which is the amount of the participation fee required to take part in the auction. This stage marks the commencement of the acquisition process of the desired property.
Day 7: Opening of bids
One week after the submission of the documents, the opening of the bids takes place. This is the point at which the name of the highest bidder is announced. This is a pivotal moment in the auction procedure, since the highest bidder will be revealed at the opening of the bidding.
Day 21: Sale to the highest bidder
This is the day when the highest bidder will be the winner of the auction. During the 14 days following the opening of the bids, the court carries out checks on the buyer. These checks ensure that there are no legal problems. If all the conditions are met, the sale to the highest bidder goes ahead.
Day 51: Payment of the balance
The agent is notified of the deadline for payment of the balance once the highest bidder has been chosen. This is usually around 30 days from the date the sale was decided.
Day 52: Transfer of name to public registers
Once full payment for the auctioned property has been confirmed, the court will arrange for the name of the property to be changed the following day. The documents can be removed from the public registers within 7 to 10 days.
Key facts:
- In the event that a buyer does not achieve the highest bid and his bid is placed third or lower, the amount of the deposit or participation will be refunded to the bank account of the agent in Japan within approximately 7 to 10 days.
- If the highest bidder waives payment of the remaining amount of the auctioned item, the right to bid is transferred to the second highest bidder. In any case, the deposit paid by the highest bidder cannot be returned by the court if the purchase is rejected before the 51st day.
Documents required for property auctions in Japan:
- Certificate of residence: this must show the name, address and signature of the person concerned and must have been issued within the last three months.
- Power of attorney for a representative in Japan: the court will provide a model power of attorney which will be translated into one of the working languages (English, French or Spanish) for the buyer to complete and sign.
- Certificate of the representative’s public records: this document contains the public records of the representative’s company. It is essential to use a representative because if the bid does not reach the maximum amount and the property is not sold at auction, the purchase guarantee, i.e. the participation fee, must be returned by the court to a bank account in Japan.
- Bid document: This specifies the amount of the offer. This may be a printed document that the buyer can email to the agent. This document will also be translated into the client’s preferred working language.
- Written declaration document: This document consists of an affidavit in Japanese in which the buyer swears that he does not belong to a criminal syndicate and has no relations with one. It must also be translated into the client’s preferred working language.
As you can see, the property auction process in Japan is a painstaking one, requiring special documentation and strict compliance with deadlines. With the right information and documentation, buyers can participate in these auctions and acquire property efficiently. It is important to understand each step in order to purchase a property at an affordable price in this exciting Japanese property market.
If you’re interested in owning property in Japan, don’t hesitate to reach out to us via WhatsApp at +81 80 8027 2344 or by email at sales@yourhouseinjapan.com. We’re here to assist you every step of the way.