Items to be Confirmed in the Mediation Contract
The "standard mediation contract clauses" (hereinafter referred to as "Standard clauses") cover the basic matters to be stipulated in a mediation contract, and prevent a mediation contract disadvantageous to the consumer from being concluded.
The following is an outline of the standard conditions of contract and matters to be confirmed.
If there are any conditions that are not included in the Standard Terms and Conditions, make them as clear as possible by adding them. The Ministry of Land, Infrastructure, Transport and Tourism also recommends that matters that are not disadvantageous to the client be added to the Standard Terms and Conditions in a more specific manner.
Matters to be confirmed in the mediation contract (standard terms and conditions)
(1) Whether the contract is based on standard terms and conditions or not
The Ministry of Land, Infrastructure, Transport and Tourism instructs a real estate company to conclude a mediation contract based on standard terms and conditions. Since whether or not it is a contract based on standard terms and conditions is indicated in a mediation contract, confirm it. If it is a contract not based on standard terms and conditions, ask the reason why standard terms and conditions are not used.
(2) Types of mediation contracts
It is stated in the contract whether it is a full-time mediation contract, under-exclusive-contract exclusive duty mediation contract, or general mediation contract. Moreover, in the case of a general mediation contract, whether it is an explicit type or a non-explicit type is described. Check whether it is the contract which you hope for.
(3) Display of the subject property
The property subject to brokerage or the desired conditions of purchase are indicated, check for any errors.
(4) Obligations and duties of a real estate company
The basic duties to be provided by the real estate company are specified. It is possible to describe the details of the duties in greater detail. After confirming the duties of the real estate company and the contents of its business, if there are any matters to be added, coordinate with the real estate company.
(5) Effective period and renewal
The effective period of a mediation contract is described. A full-time mediation contract and exclusive-contract full-time mediation contract have the legal regulation that an effective period must not exceed three months. Although there is no legal regulation concerning an effective period in a general mediation contract, it is assumed to be decided within the range not exceeding three months in standard terms and conditions. Set the validity period in consideration of the expected purchase schedule, etc. (It is also possible to make a contract for a period shorter than three months.)
The mediation contract will be renewed by an offer from the client at the expiration of the effective period. Please decide the effective period after renewal within the range not exceeding three months. A mediation contract is renewed only by the client's request, and is not automatically renewed. Please carefully determine whether or not to renew by the client's own judgment.
(6) Brokerage value
The desired purchase price, etc., which was finally determined based on the desired purchase price of the prospective buyer and the advice of the real estate company, is stated. Since this is an important agreement that affects negotiations up to purchase, be sure to check it thoroughly.
(7) Brokerage fee (compensation)
The amount of a mediating fee to be paid to a real estate company and the time of payment are described. Since there are many troubles concerning a mediating fee, discuss with a real estate company thoroughly before concluding a mediation contract. In addition, since there are laws and regulations concerning the maximum amount of a mediating fee that a real estate company can receive, please understand the outline before discussing with a real estate company.
(8) Obligations of the client
In the standard terms and conditions, the obligations of a client is also defined in order for the client and the real estate company to proceed with the transaction in good faith with each other. If there is a breach of duty by the client, the real estate company can claim expenses, etc. to the client based on a mediation contract, up to the amount equivalent to a brokerage fee.
● Obligation when a general mediation contract (explicit type) is concluded
If you request mediation to another real estate company concurrently during the term of validity of a mediation contract, you are obligated to notify the real estate company to that effect.
● Obligations common to a general mediation contract (non-explicit type) and (explicit type)
(9) Cancellation of a mediation contract
A mediation contract can be canceled in the following cases.
● Cases in which either a client or a real estate company can cancel the contract
When one of a client or a real estate company does not perform the duties defined in a mediation contract, and when the other party does not perform the duties in spite of having set a reasonable period of time to perform them, a mediation contract can be canceled by the other party. (In other words, if there is a "breach of contract" with regard to a mediation contract, it can be terminated within a certain period of time if the other party does not perform even if you demand that he or she fulfill the obligation).
● Cases in which a client can cancel the contract
(10) Exclusion of Anti-Social Forces
For the purpose of "exclusion of antisocial forces" from real estate transactions, standard model clauses for exclusion of antisocial forces have been introduced. Confirm that clauses such as "the person who request mediation and the real estate company/agent are not members of anti-social forces such as organized crime groups" are included in the clause of a mediation contract with a real estate company. If the other party acts contrary to these, the contract can be canceled.
(11) Mediation of persons who conduct building condition inspections
Under the Standard Terms and Conditions, a building condition investigation (investigation to grasp whether or not events such as cracks, rainwater leaks, etc., have occurred in a building) is implemented at the time of an existing house transaction, so that a purchasing decision and negotiation can be made after fully understanding accurate information concerning the state of the housing that is the subject of the transaction. The client's intention will be confirmed by indicating the possible mediation of the person who carries out a building condition investigation and specifying the presence or absence of mediation in the mediation contract document.
Conclude a Mediation Contract with a Real Estate Company.
A mediation contract is concluded when formally requesting a real estate company to mediate a sale and purchase. A mediation contract is an important document to clarify the service contents of mediation that you hope for and its consideration, such as a commission. It is necessary to conclude a mediation contract after conveying one's intention to a real estate company firmly so that there will be no regret.
Point 1: Significance of a mediation contract
A mediation contract is a contract between a client and a real estate company concerning mediation of the sale and exchange of a housing site and a building. A mediation contract can prevent troubles related to agency work by clarifying the contents of the work (what kind of service is received) and a mediation fee, etc. that a prospective buyer requests of a real estate company in a contract. Therefore, the real estate company which received a mediation request is legally obligated (Article 34-2 of the Real Estate Brokerage Act) to prepare and deliver to the client a document describing certain matters to clarify the contractual relationship of a mediation contract.
The revised part of the Real Estate Brokerage Act of the Digital Improvement Act came into effect on May 18, 2022, and the document at the time of this mediation contract conclusion can be provided by electromagnetic means (electronic document delivery) in place of a paper document.
Since the conclusion of a mediation contract is an important step that serves as a gateway to subsequent mediation work, it is necessary to properly understand the contents.
Point 2: Types of mediation contracts
There are three kinds of mediation contracts: "exclusive-contract full-time mediation," "full-time mediation," and "general mediation." In exclusive-contract full-time mediation and full-time mediation, only one company can provide brokerage services, but in general mediation, two or more real estate companies can provide brokerage services. However, when requesting mediation of purchase, it is usual to conclude general mediation. (Exclusive-contract full-time mediation and full-time mediation contracts are not often concluded.) In addition, since there are an explicit type and a non-explicit type in a general mediation contract, based on the following explanation, choose the contract which suits you.
General mediation contract
This contract allows you to request multiple real estate companies to act as intermediaries at the same time. You can also sign a contract with the other party you have found yourself (such as when negotiating directly with a relative or acquaintance) without having to go through a real estate company. However, you will ultimately decide through which real estate company to proceed with the transaction. Generally, it is common to proceed with a deal with the real estate company that introduced the most promising housing.
Explicit and non-explicit types
There are "an explicit type" and "a non-explicit type" in a general mediation contract.
In the case of an explicit type, it is necessary to notify the real estate companies that you have requested mediation of which other real estate companies you have commissioned mediation to, even though the contract permits simultaneous requests to other real estate companies. On the other hand, in the case of a non-explicit type, it is not necessary to notify the real estate company of whether you have made concurrent requests to other real estate companies or what kind of companies you have been working with.
Point 3: Matters to be confirmed with the real estate company prior to the conclusion of mediation
When a mediation contract is concluded, while the contents of the contract become clear, various contractual obligations arise for the client, so please be sure to keep in mind the points to be kept in mind.
(1) Clearly convey the desired conditions
It is important to reiterate to the real estate company the desired conditions, such as the time of purchase and the desired purchase price, based on circumstances such as the time when moving is possible and the financial plan necessary for purchase. Of course, there are cases in which purchase may be difficult under the desired conditions, so after sufficient discussion with the real estate company, final conditions should be determined.
(2) Confirm the contents of the mediation work
Before concluding a mediation contract, it is also important to reconfirm the contents of the mediation work presented by the real estate company. Failure to make this confirmation may result in a situation where you do not receive the services you thought you were entitled to.
(3) Check about brokerage fees
After clarifying the details of the brokerage business, confirm the brokerage fee. Make sure you understand the laws and regulations regarding brokerage commissions, etc., and discuss them with the real estate company.
Point 4: Contents of a mediation contract and matters to be confirmed
As for a mediation contract, the Minister of Land, Infrastructure, Transport and Tourism publicly announces "Standard mediation contract terms and conditions" (hereinafter referred to as "Standard terms and conditions") for the purpose of standardization of mediation contracts and consumer protection. Since a mediation contract is generally concluded by the standard terms and conditions regarding mediation for a residence, etc., it is important to correctly understand the contents and matters to be confirmed.
In addition, the real estate company will indicate whether or not the real estate company can arrange for the person who conducts the building condition survey (inspection) (limited to those conducted by an architect who has completed the training course specified by the Minister of Land, Infrastructure, Transport and Tourism), and will specify whether or not such arrangement can be made in the mediation contract document.
Arrows International Realty Corp.