Laws about Domestic Contacts for Foreign Buyers of Japanese Real Estate
Do you really need a domestic contact to buy real estate in Japan?
There is a new hurdle for foreigners buying property in Japan; as of April 2024, a new law became “effective” that “states” that foreigners “should” include the name and address of a domestic contact when they buy real estate in Japan.
I suppose all those “scare quotes” in this opening paragraph require an explanation.
I first heard about the requirement for “a domestic correspondent address for foreign owners of property in Japan” from a local real estate agent here in Hokkaido. The existence of a new “law” was a surprise, because even though I had responded to hundreds of client requests in the last year, I had never heard an agent or client mention it, not even once, until just before the new year.
If there is a requirement for foreigners, why hadn’t it come up in any of the deals I’d touched that year? Even if the changes to the laws about Japanese title registration were rare knowledge, some buyer would have heard about it and it should have come up in conversation. Or, if it were important, an agent should have let me know that the buyers should be prepared for that obligation. If there was a new role, a new service that foreign real estate buyers might need, why hadn’t I met individuals or representatives from companies here in Japan who were offering that service?
I was genuinely surprised. Since that conversation last Fall, I’ve spent quite a bit of time trying to learn about the criteria for a domestic contact for a foreign property owner.
As part of our very thorough guide to the concept of domestic contacts for real estate purchases in Japan, my team and I share some details about the law itself:
“When the registered person of ownership does not have an address in Japan, [they must supply] the name or title, the address and other information (specified by the Ordinance of the Ministry of Justice) of a domestic point of contact within Japan.”
This passage is our translation from the original - which was a section of some MOJ legislation called the The Real Property Registration Act. That quote states the “specification.” And there I am, using “scare quotes” again. Why do I keep doing that?
I keep qualifying that “statement” because I am still not sure what to call this new “announcement.”
Is it a law? If it is a law, is it a “requirement?” If it’s a requirement, does that mean you cannot complete the transaction without providing a domestic contact on the title? If it were a law, wouldn’t that mean the purchase of real estate could not proceed until the buyer could comply with the domestic contact “order?” If the sale could proceed even if that sale was in conflict with the “law,” wouldn’t we expect some kind of fine, if not now, then eventually?
If I were the authority behind the new “law,” I would expect some consequences. Does this law have any teeth?
The reality is that the law is currently (as of early 2025) functioning more like a recommendation or a suggestion. That is not how most of us think about real estate law, but in practice that is how the law is currently expressed.
If you’re a foreigner, and you want want to buy a particular property in Japan, and you cannot provide a domestic contact - you can still buy the property. Not only can you buy it, but there seems to be no consequence, at all, to ignoring the law. In fact, the law itself provides instructions for how to side-step the whole concept:
“When there is no domestic contact person, [the property owner must supply] a statement to that effect.”
Really? If I don’t feel like complying with the domestic contact “requirement,” I can just say, “I don’t have a domestic contact,” and the transaction proceeds?
Yes, that does appear to be the state of affairs.
Recently I had a beer with a local Hokkaido real estate agent, and I took that opportunity to ask some questions. My friend does a lot of deals here in Hokkaido, and he doesn’t even bother explaining this “law” to his clients. I don’t blame him. As it currently functions, it’s confusing, and apparently not truly necessary. Why complicate the deal for the client by even bringing it up? If the client doesn’t ask about the “option” to include a local corresponded on their title, it might not seem wise to talk about it at all.
Perhaps the reader is familiar with the concept of the “spirit” of the the law versus the “letter” of the law?
In this case, the “spirit” of the law - or it’s intention - seems to me to be a very good idea. Japan does have a problem with property where the owner cannot be contacted. It seems the spirit of this toothless law, is to improve the quality of owner records for property in Japan.
All of us in Japanese real estate are (painfully) familiar with the idea of akiya in Japan. In many cases, the registration for these “abandoned” properties with the Legal Affairs Bureau does not reflect the current owner, has become outdated, or the owner is not responsive. The spirit of the law here is to keep the property title records in Japan current and accurate. If I were the Japanese government, I would want that to be true.
The “suggestion” created by the new laws - that foreign buyers might choose to add a domestic contact to the title of their Japanese real estate - is basically a companion to other laws enacted at the same time that focus on similar title-related issues related to death and inheritance for Japanese citizens. No one told me that, but I’m reading between the lines, and this is my opinion about the “spirit” of the what the MOJ is trying to accomplish.
The majority of ambiguity in the Japanese property records relates to domestic owners - not foreigners. If Japan wants property records to be more functional, the biggest opportunity exists in motivating Japanese owners to keep contact information on their property titles current. In the case of death of a property owner, or more general inheritance processes in Japan, changing the title to reflect the new owner or heir to the property would help keep the real estate registry in Japan healthy. This is why I have come to the conclusion that: the spirit of the laws about foreigners were perhaps intended to serve a similar function, even as foreign owners represent a much, much smaller percentage of the property records.
But since the implementation of the current law does not impeded the purchasing of Japanese property when the foreign buyer fails to fulfill the domestic contact “opportunity,” because there is no penalty, because there is no fine, because there is no consequence for blowing off the spirit of the law, the actual “letter” of the law is, for now, anemic and messy. While I can easily imagine some rationale to support the spirit of the law, the letter of the law is so inconsequential, it is hard to explain how it constitutes law.
In a real estate transactions in a Japan, the local Japanese real estate agents arrange for a judicial scrivener to make the legal changes to the title so the new buyer can prove they own the property. If a domestic contact was to be added to the title, it would be a local Japanese judicial scrivener that would actually conduct that process. This week I took a meeting with a local judicial scrivener to review my notes on the domestic contact concept, and to ask about her experience with the implementation of the law thus far.
My judicial scrivener friend was very familiar with the concept of “domestic contacts” for foreign buyers. She referred to the whole process as “the registration of correspondence address in Japan." As for implementation of the letter of the law, she says: Basically none of the clients provide the domestic contact. As a matter of fact, she tells her clients that if they want to add a domestic contact to the property registration - she recommends they do it later, after the sale (which probably means another process, and another bill for legal services, another mess to clean up at a later time - if it were me, and I was going to do it at all, I’d want to do it all at once, as I buy the property). Adding a domestic contact “later,” is not what the law says, but there you have it. The expression of this “requirement” in the real estate community in Japan is very unclear.
I asked my very talented judicial scrivener friend how much it might cost a foreign property owner to add a domestic contact to a property title in Japan, and… she doesn’t know. Because… she has never actually done it. Because… no one has ever asked for that service. These are subtle clues as to how (un)important these new clauses are to the actual practice of Japanese real estate law.
When I am in my role as a real estate writer here in Japan, I can tell stories about the details - however messy. But when I am in my role as a real estate adviser to clients buying property in Japan, I am inclined to revert to the spirit of the law, even if the letter of the law is rarely acknowledged.
If it were my deal: I would in fact try to line up a domestic contact before the sale, so I would have the name and address of that contact in advance; I’d give that info to the agent and ask them to make sure they gave it to the judicial scrivener. And then, if I had the presence of mind; I’d be looking to have the inclusion of a domestic contact shown to me, on closing day, as we signed all the documents, to be sure it was done. That is what I would do, personally. That would meet both the spirit and the letter of the law. Doing all that, would completely comply with the law, could not hinder the sale, would help ensure the deal would proceed, and would actually serve me in the event that kind of contact was ever necessary.
This is what I would tell my clients… if I thought it was important. But after all this contact with my real estate agents friends and colleagues, all these questions, hearing their stories - I’m not sure it is important.
Thinking about the agent I had the beer with: His opinion about why there is a law “asking” that buyers provide a domestic contact that has no consequences is that the Japanese government is just “testing” that idea. That may be true. If so, my conclusion is that for laws that are not required, there will be very little compliance (so the test will fail).
Perhaps it is less than a best practice that my agent friend doesn’t bother to tell his clients that such a “stipulation” exists. While the lack of a domestic agent won’t hold up the transaction today, it could, possibly, maybe, maybe not, become a legal problem, or not, later. Even if it doesn’t present an immediate problem, lining up a domestic contact might help clients to feel like they are making the safest choice - and for big-ticket real estate purchases, safe choices are traditionally popular (if not mandatory). If the client did include a local domestic correspondent, the letter of the law would be satisfied. And what’s more, the spirit of the law would be protected, and having a domestic contact might just help the buyer out in the future, if there was ever an issue with the property.
What should foreign buyers and local Japanese agents think about all this, in today’s market, with zero-enforcement of this “law” (which includes a procedure to ignore the idea altogether)? Who knows. The safe bet is to comply.
I have certainly done my due diligence on the topic. I am confident we wrote the best article about real estate domestic contact law in Japan available on the internet. We outline who (and how someone) can serve in that domestic contact role. In our article, we point out that for international buyers of Japanese real estate that are interested in having a domestic correspondent on their title, that they can have a friend or relative in Japan serve in that role. Since many foreign buyers don’t have a willing friend or relative standing by for that function, we talk about how a property management company can do the job. For another option, using a tax administrator in Japan as the domestic contact is an ideal solution for many foreign owners.
After all of my research, I’m am ultimately less certain that clients need to know the law even exists. I probably know a little too much about this topic, and it has made me less certain.
If the Japanese government doesn’t enforce the law, and the agents aren’t going to bother talking about it, and the judicial scriveners even tell you “just do it later” (which is not at all what the law says), and there are no consequences anyway - the way the law is expressed makes it unlikely to be followed, and any intended positive effects from the implementation of the spirt of the law are unlikely to happen at all.