Regulations When the Seller Is a Real Estate Agent
When a real estate company (real estate agent) is the seller, the following restrictions are set in the sales contract.
(1) Restrictions on contracts for properties that have not yet been complete
Permission or confirmation, etc. (hereinafter referred to as "permits, etc.") from an administrative agency is required for the creation of land or construction of buildings above a certain size. Without these permits, land cannot be developed or buildings cannot be constructed. Therefore, a real estate company (real estate agent) cannot conclude a sales contract for an uncompleted property for which land development or building construction has not yet taken place prior to obtaining the permits, etc. from the administrative agency. When conducting sales and purchases of uncompleted newly built properties for sale, confirm that permits, etc. are in place.
When a real estate company (real estate agent) is the seller, cooling-off (unconditional cancellation of contract, etc.) is applicable to the buyer if certain conditions are met. The requirements are as follows. Check whether the cooling-off is applicable to your contract.
(3) Restrictions on deposits
When a real estate company (real estate agent) receives a deposit, the following restrictions apply, so please make sure to check them carefully.
(4) Protection of deposits, etc.
When a real estate company (real estate agent) receives a deposit or a portion of the sales price (hereinafter referred to as "deposit, etc.") exceeding a certain amount at the time of concluding a sales contract, the company must take measures to protect the deposit, etc. The security measures are a guarantee by a bank or a guarantee company, etc., or insurance by an insurance company. This means that even in the unlikely event that the real estate company (real estate agent) goes bankrupt, the deposit, etc. paid at the time of signing the contract will be returned. Check to see if the amount of the deposit, etc. to be paid is covered by the protection measures.
The amount of deposit, etc. subject to protection
*For an amount that is not listed above, the protective measures are optional.
(5) Restrictions on the amount of scheduled compensation for damages
A real estate company (real estate transaction agent) may not conclude a contract in which the total amount of the penalty or scheduled amount of compensation for damages in the event of a breach of contract exceeds 20% of the sales price. If this is violated, the portion exceeding 20% will become invalid, and the total amount of the penalty and scheduled amount of compensation for damages will be 20% of the sales price.
(6) Limitations on provisions regarding liability for non-conformity to the contract
Even if a real estate company (real estate agent) makes a provision less favorable to the buyer than the provisions of the Civil Code regarding liability for non-conformity to contract, the provision will be invalid. However, a provision stating, "We will assume responsibility only if we are notified within two years from the date of delivery. is valid, although it is less favorable to the buyer than the provisions of the Civil Code. In case the provision is invalid, the principle provisions of the Civil Code will be applied.
Regulations when the seller is a real estate agent
In case the property is a newly built house
The seller of a newly built house must assume liability for defects (liability for nonconformity to the contract) of the main structural parts (foundation, pillars, roof, exterior walls, etc.) for at least 10 years from the date of delivery. If the property to be purchased is a newly-built house, please confirm the period and details of the liability for defects carefully. In order to ensure the fulfillment of liability for defects, the seller is obliged to subscribe to insurance or deposit a security deposit. It is important to confirm what measures will be taken for the new house you are planning to purchase.
Arrows International Realty Corp.