Registration will be mandatory when inheriting real estate in Japan!

Post date: Thursday, December 28, 2023

From 1 April 2024, application for inheritance registration will be mandated, and penalties will be imposed for failure to do so. This act will apply to all persons who inherit real estate in Japan, including Japanese nationals and foreigners residing outside of Japan. In the past, many people did not apply for inheritance registration because they did not like to follow cumbersome procedures, such as obtaining signature certificate and other documents, and there were no penalties for failure to do so. However, you need to be careful about the said coming change. So, this time, we will explain in detail about the inheritance registration of real estate in Japan including the amendment points of the Japan’s Real Property Registration Act.

What is inheritance registration?

The ownership of real estate in Japan is recorded in a register maintained by the Legal Affairs Bureau. Inheritance registration is the procedure to change the name of the inherited real estate from the decedent (the deceased) to the heir, specifically by applying for registering transfer of ownership due to inheritance to the Legal Affairs Bureau having jurisdiction over the location of the subject real property.

Why will inheritance registration become mandatory?

The number of “Land with unknown owner”, whose owners cannot be identified in the register because it has not been registered as inherited, is increasing nationwide and has become a social problem in Japan, hindering public works such as disaster prevention, disaster mitigation and town planning, and causing the deterioration of the surrounding environment. To solve this problem, inheritance registration, which was previously voluntary, will become mandatory soon.

Land with unknown owner

- Land whose owner cannot be immediately identified by the register of real estate.

- Land whose owner is identified but not contactable because the owner’s whereabouts are unknown.

Details of mandatory inheritance registration

- Heirs who have acquired real estate in Japan by inheritance (including the cases by will) are required to apply for inheritance registration within 3 years from the date of knowing that he/she has acquired such ownership.

- Heirs who have acquired real estate as a result of the conclusion of a legacy division agreement, are required to apply for registration based on the details of the agreement within 3 years from the date when the agreement is concluded.

(If the division of the estate has not been concluded, an 'heir declaration registration' must be applied for prior to the inheritance registration, within 3 years from the date when you learn the existence of real estate in the inherited estate. Thereafter, the inheritance must be registered within 3 years from the conclusion of a legacy division agreement).

- If an application for inheritance registration is not made without justifiable reasons, a civil fine of up to 100,000JPY may be imposed.

*What are justifiable reasons? (excerpts from the Ministry of Justice Circular)

(1) When there are an extremely large number of heirs in relation to an inheritance pertaining to the obligation to apply for inheritance registration, etc., and it takes a lot of time to collect documents related to family registers, etc., and to identify other heirs, etc.

(2) When the entity to which inherited real estate belongs cannot be clarified because the validity of the will and the scope of the inheritance are disputed among the heirs, etc. in relation to the inheritance pertaining to the obligation to apply for inheritance registration, etc.

(3) When the person who is obliged to apply for inheritance registration, etc. has a serious illness or other similar circumstances.

(4) When the person who is obliged to apply for inheritance registration, etc. is a victim or other equivalent person as stipulated in Article 1, Clause (2) of Act on the Prevention of Spousal Violence and the Protection of Victims (Act No. 31 of 2001) and is forced to evacuate due to a condition where there is a risk of harm to his or her life or mind.

(5) When the person who is obliged to apply for inheritance registration, etc. does not have the ability to bear the cost required to apply for registration due to financial hardship.

Is real estate inherited before April 1, 2024 not required to be registered?

You are obliged to apply within 3 years from April 1, 2024, the date on which the amended act comes into force, or when you learn that you have inherited real estate, whichever is later.

Summary

Even though there is a 3-year grace period, applying for registration, which requires time and effort, may be an uncomfortable task. However, it is very important to know who owns the real estate in order to make effective use of the limited land of the country and to create a safe and secure living environment, so we hope that this amendment to the act will encourage more people to apply for inheritance registration. When you actually need an application, it may be difficult to deal with it by yourself, so we recommend that you consult with an expert such as a lawyer or judicial scrivener. We also recommend that you consult with a real estate company about how to use the inherited real estate.

On 1 April 2028, the law also will come into force stating that "if there is a change in the name (head office or trade name) or address of the registered owner of the real estate, the change must be registered within 2 years from the date of the change." We expect that the legislation relating to real estate will continue to be developed in the future, so we will explain any decisions or changes as soon as they are made.