What is the 'Important Matters Explanation Document'? Who is responsible for explaining it? What should I pay special attention to?

Okay, no problem. When buying property in Japan, understanding the "Important Matters Explanation" is absolutely crucial. Think of me as a friend who's learned the hard way and has some experience to share about this document.

What is the 'Important Matters Explanation'?

You can think of it as a combination of the property's "physical examination report" + "background check report".

This document, called 「重要事項説明書」 (Jūyō Jikō Setsumeisho) in Japanese, is commonly abbreviated as 「重説」 (Jūsetsu). It is not the sales contract itself, but you could say it's even more important than the contract. Why?

Because this document must be explained to you by the real estate agent BEFORE you sign the sales contract. Its legal purpose is to protect you, the buyer, ensuring you are fully aware of all aspects of the property – both good and bad – before you sign on the dotted line and hand over a large sum of money.

Simply put, it lays out in black and white all the "important matters" that could influence your purchasing decision, allowing you to make an informed purchase. This document is mandated by Japanese law (the "Real Estate Transaction Business Act"). Without this process, the transaction is illegal.

Who is Responsible for Explaining It?

This point is extremely important! The person responsible for explaining this document MUST be a nationally licensed "Licensed Real Estate Transaction Agent" (宅地建物取引士 - Takuchi Tatemono Torihikishi). You can think of them as a "certified professional real estate agent".

Before the explanation begins, this "Torihikishi" MUST show you their license (「宅地建物取引士証」) for you to verify their identity. This is not just a formality; it's required by law.

Who Explains: A professional "Licensed Real Estate Transaction Agent", not just any salesperson.
How it's Explained: Traditionally done face-to-face, where they read and explain each item to you. It is now also permitted via video conference (called "IT Jūsetsu"), but strict identity verification is still required.
Your Role: Your job isn't to just listen passively; you need to ask questions at any time! If anything is unclear or confusing, interrupt immediately and ask them to explain it in simpler terms. Don't be shy; this concerns your living situation and property security for potentially decades to come.

If the agency sends someone without a license to explain it, or skips this step and asks you to sign the contract directly, that company is definitely problematic. Stop the transaction immediately.

What Content Requires Special Attention?

Alright, pay close attention! This document is usually thick and full of jargon, but you absolutely need to focus intently on the following points:

1. Basic Information About the Property Itself

Registered Title Information (登記記録に記録された事項 - Tōki Kiroku ni Kiroku sareta Jikō): This tells you what's written on the property's "official register".
- Who is the owner? Confirm the seller's name matches the name on the register.
- Are there any mortgages? (抵当権など - Teitōken nado): Has the property been used as collateral for a bank loan? If yes, confirm the seller will repay the loan and release the mortgage before handing over the property. Otherwise, you could end up buying a property burdened with someone else's debt – a huge problem.

2. Legal and Regulatory Restrictions

Zoning (用途地域 - Yōto Chiiki): This determines the land's permitted uses. Is it purely residential, or can businesses operate there? This affects the surrounding environment and future development.
Building Restrictions (建蔽率・容積率 - Kenpeiritsu / Yōsekiritsu): These two "ratios" dictate how large and how tall a building can be constructed on the land. If you're buying land to build on, or plan to demolish and rebuild the existing structure, these numbers are the absolute limits you must understand.
Road Access Obligations (接道義務 - Setsudō Gimu): Does the property connect to a road that meets building regulations? Some older properties might border a very narrow "private road" (私道 - Shidō), which could affect future rebuilding or value.

3. Surrounding Environment and Potential Risks

Infrastructure (飲用水・ガス・電気の供給施設、排水施設 - In'yōsui / Gasu / Denki no Kyōkyū Shisetsu, Haisui Shisetsu): Who supplies your water, gas, and electricity? Is sewage connected to the public system, or does it use a private septic tank (浄化槽 - Jōkasō)? These affect your future living costs and convenience.
Disaster Risks (造成宅地防災区域、土砂災害警戒区域、津波災害警戒区域 - Zōsei Takuchi Bōsai Kuiki, Doshasaigai Keikai Kuiki, Tsunami Saigai Keikai Kuiki): This is especially important in Japan! Is the property located within government-designated hazard zones for landslides, floods, tsunamis, etc.? The agent is obligated to show you the "Hazard Map" and explain it.
"Psychological Defects" (心理的瑕疵 - Shinriteki Kashi): This is a unique but crucial point. It refers to whether non-natural deaths (suicide, homicide, death by fire, etc.) have occurred in the property. If so, the agent must disclose it. Many people are sensitive to this, and it significantly impacts property value.

4. If You're Buying a Condominium (マンション - Manshon)

Management Fees & Repair Reserve Fund (管理費・修繕積立金 - Kanrihi / Shūzen Tsumitatekin): How much are the monthly fees? Are there any arrears? Are there plans for future increases?
Repair Reserve Fund Balance (修繕積立金の総額 - Shūzen Tsumitatekin no Sōgaku): How much money has the entire building saved for future major repairs (e.g., exterior renovation or elevator replacement every 10-20 years)? If this fund is too low, it likely means you'll face a large lump-sum payment or a significant increase in monthly contributions later. This is a key indicator of a condominium's management health!
Building Management Rules (管理規約 - Kanri Kiyaku): For example: Are pets allowed? What are the renovation restrictions? How is parking allocated? These rules directly impact your living experience.

5. Important Clauses Regarding Money and the Contract

Cancellation Clauses (手付金の保全措置・手付解除 - Tetsukekin no Hozen Sochi / Tetsuke Kaijo): If you pay a deposit (手付金 - Tetsukekin) and then change your mind, can you get it back? Under what conditions can the contract be canceled? How much must the seller compensate you if they back out? These rules are specified here.
Liability for Defects (契約不適合責任 - Keiyaku Fuitaigō Sekinin): If, after taking possession, you discover significant defects not mentioned in the "Important Matters Explanation" or the contract (e.g., leaks, termites), how long do you have and what recourse do you have to hold the seller liable?

Finally, a Small Tip:

Before the "Important Matters Explanation" session, ask the agent for a copy (physical or digital) of the 「重要事項説明書」 to review beforehand. Mark anything you don't understand. This way, you can listen during the formal explanation with your questions ready, making the process much more efficient.

Remember, this document is your most powerful tool as a buyer. Spending ample time to understand it is always worthwhile. Good luck with your property purchase!