I saw few second hand apartments on sale in upscale areas like roppongi and azabujuban way below there market price.
Looking closely realized that all of them have land ownership as some kind of "lease" like 旧法賃借権 ( kyuhou chinshakuken ), roughly meaning "old law right to lease". So the question is what happens once lease expires ?
For example, below link the apartment building is on a "leased" land and the lease is valid for 14 more years.
https://www.homes.co.jp/mansion/b-1392840000004/
What happens to residential buildings on leased land after it expires
Re: What happens to residential buildings on leased land after it expires
I would assume you would pay the land owner a rental fee to renew the lease...
Re: What happens to residential buildings on leased land after it expires
Yes, That will be a happy ending i guess.
What is Land owner is not willing to renew or they cannot renew.
Do you get some kind of buyout offer on the house or apartment ?
What is Land owner is not willing to renew or they cannot renew.
Do you get some kind of buyout offer on the house or apartment ?
Re: What happens to residential buildings on leased land after it expires
I've been house hunting and found one just like this - buy the house but only lease the land. I asked the real estate agent about it yesterday (not because I want that house, but I wanted to answer this question!) and he said if the owner of the land decides not to renew the lease...you're just plain screwed. I have no idea how that is even legal, but, there you have it.
Re: What happens to residential buildings on leased land after it expires
It is extremely common and legal. I have visited even new manshion with such type of scheme.
You have to be extremely careful. Please look up for the words like 借地権 or 定期借地権.
This is common because Real estate have difficulties to find land available in residential areas so they set up this scheme to secure the land for 50 years or so. This is why the prices look cheap because you only pay for the building. I was told this is one of the measure taken to propose more affordable property to people who cannot afford the high prices in some areas but still want to live there.
However, at the end of the lease, basically if not renewed, the building will be destroyed and the land handed over back to the owner. Bare in mind that the cost of destroying the building is your responsibility if you own an apartment in such buildings.
Also, some people are selling their old manshions appartments under this scheme and so it will look cheaper as well but the remaining years until destruction need to be checked carefully because in the end you are paying for nothing... Better to rent...
You have to be extremely careful. Please look up for the words like 借地権 or 定期借地権.
This is common because Real estate have difficulties to find land available in residential areas so they set up this scheme to secure the land for 50 years or so. This is why the prices look cheap because you only pay for the building. I was told this is one of the measure taken to propose more affordable property to people who cannot afford the high prices in some areas but still want to live there.
However, at the end of the lease, basically if not renewed, the building will be destroyed and the land handed over back to the owner. Bare in mind that the cost of destroying the building is your responsibility if you own an apartment in such buildings.
Also, some people are selling their old manshions appartments under this scheme and so it will look cheaper as well but the remaining years until destruction need to be checked carefully because in the end you are paying for nothing... Better to rent...