What Is the Important Matters Explanation Document When Buying a Property?

The Important Matters Explanation Document is a written document that is used in real estate transactions such as sales and leases. It outlines critical information about the property and transaction terms. Under Article 35 of the Real Estate Transaction Business Act, a certified real estate transaction agent must provide this document, and explain the contents orally to the buyer before signing the contract. The document ensures that the buyer, who might lack specialized knowledge, can fully understand the terms and proceed with the transaction confidently.

What Does It Cover?

The contents of the Important Matters Explanation Document are as follows.

1. Real Estate Company Information

The document must contain information about the seller real estate company (or an individual).

The following real estate agency information is required:

• License number

• License date

• Business location

• Business name

• Name of representative

• Information on the real estate agent who will explain important matters (Name, registration number, address, and phone number of the office)

When explaining the contents of the Important Matters Document, the real estate agent must present his/her “real estate agent certificate.”

2. Details About the Property

The document contains information about the property such as the address, size, type of ownership rights, legal restrictions, infrastructure availability, disaster warning designations, building performance inspections, and inspection results.

Land Information

• Location and lot number

• Classification of land category

• Acerage

• Types of rights

• Percentage of land rights (Ownership ratio)

• Remarks etc.

Building Information

• Location

• Structure

• Housing type

• Total floor area

• Details of the area if the building has private areas 

When explaining the contents of the Important Matters Explanation Document, details about the land need to be confirmed by using maps.

If necessary, the building details should be checked with the blueprint of the building to ensure that there are no errors.

Registration

Matters related to registration are transcribed from the rights section of the registration certificate (登記簿謄本 - Toukibo-Tohon).

Legal Restrictions

This section states legal restrictions on real estate, such as the City Planning Act and the Building Standards Act.

The main restrictions are as follows:

City Planning Act

• Area classification

• Development and construction activities in urbanization control areas

• Urban planning roads, etc.

Building Standards Act

• Zone classification

• Building-to-land ratio

• Floor-area ratio

• Height restrictions

• Area and road restrictions

• Restrictions on sunlight and shade, etc.

Infrastructure Development Status

The document includes the following information about infrastructure related to daily life (electricity, gas, drinking water, and sewerage):

• Installer

• Administrator

• Piping installation status

• Piping maintenance status

• Whether there are plans to install piping or not

• If maintenance is planned, the planned implementation date and cost

• Remarks etc.

Disaster Hazard Zones

A disaster warning area is an area that is recognized as posing a harmful risk to the residents due to a disaster.

This section explains information about disasters to be wary of in the area. It is recommended to check and confirm where the property is located on the hazard map.

Building Performance Evaluation and Investigation

The document includes information on the status and results of evaluation and investigation such as building condition inspections, housing performance evaluations, and earthquake resistance diagnosis.

Building Condition Inspection

• Implementation status

• Summary of inspection results

• Asbestos usage, etc.

Housing Performance Evaluation

• Whether the property is eligible for evaluation or not

• Housing performance evaluation report

• Housing performance indication, etc.

Earthquake Resistance Diagnosis

• Implementation status

• The earthquake resistance standard applied (whether new standard or old standard)

• Contents of earthquake resistance diagnosis

• Name of the institution that carried out the seismic assessment, etc.

For buildings other than new construction, you will need to indicate whether a building condition inspection has been conducted within the past year or not, and a summary of the inspection results.

3. Transaction Terms

The Important Matters Explanation Document lists matters related to transaction terms such as the price, payment method, delivery date, contract cancellation terms, deposit money, penalties for breach of contract, etc.

Transaction Fees

This section includes the various transaction fees agreed upon between the buyer and seller.

• Purchase price

• Deposit

• Settlement fees (fixed property tax, repair reserve fund, management fee, etc.)

Contract Termination

This section includes conditions and methods of contract termination and the arrangements that will be made in the case of termination.

Deposits

This section states the deposit preservation measures.

4. Other Clauses

There are other sections listed about loan usage terms, provisions regarding liability for non-conformity, and conditions for rescinding or breaching the contract.

Loan

This section in the Important Matters Explanation Document includes information about the loan such as whether or not the real estate company will mediate mortgages, and the deadline for obtaining loan approval.

• Name of the financial institution

• Loan amount

• Interest rate

• Loan period

• Repayment method

• Guarantee fee

• Administrative fee

Liability for Non-Compliance with Contract

This section lists matters related to the seller’s responsibility in cases where the facts stated in the contract are false.

• Defects and imperfections that the seller must notify in advance

• Seller’s responsibility

• Measures to be taken in the case of non-compliance with the contract

• Guarantees and insurance contracts, etc.

Condominium Ownership

If the property is a condominium, the important matters on the Condominium Ownership Act must be explained.

• Types of rights

• Details of management regulations and usage rules for common areas

• Contents of management regulations and usage rules for exclusive use areas

• Contents of management regulations and usage details regarding exclusive use rights

• Monthly repair reserve fund amount, overdue amount, and total amount

• Monthly management fee and overdue amount

• Expenses other than repair reserve funds and management fees

• Information on the management contractor and management form

• Records of repair work implementation

• Repair work plan

Other Special Provisions

This section summarizes important information that the seller should communicate to the buyer in addition to those mentioned above.

• Whether or not there are cemeteries, crematoriums, landfills, sewage plants, or factories that manufacture hazardous materials, etc.

• Whether or not there are separate costs to be paid

• Information about neighborhood associations and city associations

• Precautions regarding the surrounding environment, etc.

Checklist for The Important Matters Explanation Document

It is important to read and understand the entire contents of the document, but there are some particular points to check.

• Check for existing mortgages or provisional registrations on the Real Estate Register

• Confirm the property is free from encumbrances before the transaction

• Check information such as the property’s location, size, and ownership rights against public records or registries

• Check restrictions on expansion or renovation, zoning regulations, building-to-land ratio, floor area ratio, and any other legal constraints to ensure the property can be used as desired

• Check the status of utilities such as electricity, gas, water, sewage, along with their supply methods, and whether any additional costs are required

• Review monthly fees, plans for major renovations, parking rights, and restrictions on common areas

• Confirm conditions for canceling the purchase agreement without penalties (e.g., if a loan is denied)

• Understand the terms for earnest money and its refund conditions

• Identify latent defects, warranties, or broken items

• Investigate past incidents or potential hazards

• Check for planned construction in the area that could impact property use

• Review prior uses of the land for potential contamination risks

• In the case of an apartment building, check the apartment building management regulations and usage details

• Check if the property is designated within landslide warning areas, flood-prone areas, or other disaster-risk zones

• Verify any additional information that may influence the purchase decision

In Closing

The Important Matters Explanation Document is a vital resource for ensuring transparency and understanding in real estate transactions. By carefully reviewing its contents and clarifying any concerns with your real estate agent, you can protect your interests and proceed with confidence. 

For property owners managing Akiya, Airbnb, or vacation homes in Japan, MailMate simplifies logistics with services like virtual mailboxes, utility payments, and tax support. The bilingual platform ensures efficient and secure remote property management. 

Founded in 2019, MailMate has simplified property ownership for foreigners living abroad and is an increasingly popular option recommended by users and well-known industry figures.