In this issue, we will provide information on the Law for Partial Amendment of the Civil Code, etc. (enforced on April 1, 2023) and the Law for Attribution of Inherited Land to the national treasury (enforced on April 27, 2023), which are related to so-called "ownerless land".
2 What is ”land of unknown owner”
1. "Land of unknown owners" refers to (1) land whose owner is not immediately known by the real estate registry or (2) land whose owner is known but whose whereabouts are unknown and cannot be contacted.
2. Such land with unknown owners has become a major problem in public works, restoration/reconstruction projects, and private transactions, as it impedes the use of the land.
According to a survey conducted by the Ministry of Land, Infrastructure, Transport and Tourism in 2020, the percentage of land with unknown owners is as high as 24%. According to a survey conducted by the Ministry of Land, Infrastructure, Transport and Tourism in 2020, 24% of the land was owned by unknown owners, 63% of which had not yet been registered for inheritance and 33% had not yet been registered for change of address.
3. Land with unknown owners is often left in a state of disrepair due to inadequate management, sometimes creating hazards such as fallen trees and cliff collapses, and sometimes creating environmental problems due to waste materials left on the land. However, there has been insufficient legislation to properly manage such land.
3 Major legal developments
1. revision of the real estate registration system
The Real Property Registration Law was revised to make it mandatory to apply for inheritance registration and change of address registration, while at the same time simplifying and streamlining those registration procedures.
2. Establishment of a system for releasing land (Inherited Land National Treasury Attribution System)
The Law Concerning Vesting of Inherited Land in the National Treasury established a system under which a person who has acquired ownership of land through inheritance or other means may vest the ownership of the land in the national treasury with the approval of the Minister of Justice.
3. Revision of Civil Code Rules on Use of Land, Buildings, etc.
The items of this revision of the Civil Code are wide-ranging. These include clarification of the right to use adjacent land, review of changes and management of common property, creation of a system for management of land and buildings whose owners are unknown, and review of the division of property after a long period of time.
4 Obligation to apply for inheritance re
Until now, it was not mandatory to apply for inheritance registration. Therefore, especially in cases where the inherited land has little value and is difficult to sell, it is often left in the name of the decedent without the expense and effort of applying for inheritance registration.
It is not unusual for the number of legal heirs to increase over the years, and when an investigation of the heirs is conducted, the number of heirs may number in the dozens. In such cases, the disposal of real estate becomes even more difficult, and the number of ownerless lands increases rapidly.
The recent amendment to the Real Property Registration Law obliges heirs who acquired real estate to apply for inheritance registration within three years from the date they learned of the acquisition (effective April 1, 2024). If an heir fails to apply for registration without justifiable reason, the heir will be sanctioned with a non-penal fine of up to 100,000 yen. Special attention should be paid to the fact that this obligation to file an application must be fulfilled within three years from the enforcement date, even in cases where the inheritance occurred before the above-mentioned enforcement date.
On the other hand, a new registration procedure called "registration of declaration of succession" has been established to simplify the application obligation. This is a system whereby an applicant is deemed to have fulfilled his/her obligation to apply for registration if he/she notifies the registrar within three years of (1) the commencement of inheritance of the registered owner of the title and (2) his/her own identity as the heir. This facilitates the application for registration, and since the name, address, etc. of the heir who has submitted the request is added to the registration ex officio, the location of the heir can be easily ascertained by looking at the registry book.
5 About the inherited land belonging to the national treasury
Due to declining land use needs and other factors, an increasing number of people have inherited land but wish to relinquish it. In addition, owners who acquired land by inheritance without wanting it are becoming increasingly burdened, leading to inadequate management. This seems to be especially true for forests and fields in rural areas.
In response, the "Law Concerning Vesting of Land Ownership Acquired by Inheritance, etc. in the National Treasury" (Law Concerning Vesting of Inherited Land in the National Treasury) was enacted to create a system that allows land acquired by inheritance or bequest to be given up and vested in the national treasury if certain requirements are met.
This allows those who do not wish to continue to own land acquired by inheritance, etc., to vest said land in the national treasury and be relieved of the burden of land management and property taxes.
However, the Minister of Justice (Legal Affairs Bureau) must examine the requirements, and land that requires excessive cost or effort for normal management or disposal, such as land with buildings, land with security interests, land with soil contamination, or land with dangerous cliffs, is not allowed. In addition, it is necessary to pay a contribution equivalent to 10 years' worth of land management costs.
Therefore, we must say that it is unclear at this time how many projects will actually use this system to vest unneeded land in the national treasury.
6 Revision of the Civil Code rules on the use of land and buildings
1. because the content of the former civil regulations that stipulated the right to use adjacent land was unclear, it has been clearly stipulated in which cases adjacent land can be used. Specifically, the following cases are included: (1) construction, removal, or repair of barriers, buildings, or other structures; and (2) surveying of boundary markers and surveys related to boundaries.
In addition, rules regarding notification when using adjacent land are in place.
In addition, new rules have been established for the right to use neighboring land in connection with the installation of various lifeline facilities such as gas and water lines.
2. Changes to and management of common property have also been revised.
Previously, changes to common property required the consent of all co-owners regardless of the nature of the change, but now a majority of the co-owners can decide on changes that do not involve a significant change in shape or use (minor changes), such as asphalting a gravel road.
In addition, rules regarding the management of co-owned property have been newly established for cases where there are co-owners who use the co-owned property, and a procedure for the court to get involved and decide on management matters when there are co-owners who do not clearly agree or disagree on management methods and other matters.
3. A system for the management of land and buildings with unknown owners has been established.
Until now, in cases where it was necessary to manage and dispose of land or buildings whose owners were unknown, various property management systems such as administrator of absentee property, administrator of inherited property, and liquidator (in the case of corporations) have been utilized.
However, these property administration systems have the disadvantage of being "person-by-person" mechanisms that manage the subject's property in general, making property administration inefficient and burdensome for the petitioner and other users.
Therefore, the Owner Unknown Land Administration System and the Owner Unknown Building Administration System, which specialize in the administration of only specific land and buildings, were established. Under this system, the right to manage and dispose of the subject property belongs exclusively to the administrator, who may dispose of the property (e.g., sell it or demolish the building) with court approval.
This system is very useful when utilizing real estate with unknown owners.
4. In addition, a number of other important amendments have been made to the law regarding the division of estates, such as the fact that, in principle, the division of estates after 10 years have elapsed from the time of inheritance will be based on the legal portion of inheritance (or designated portion of inheritance), rather than the specific portion of inheritance. These are also amendments related to the resolution of ownerless land.
What do you think? The problem of land with unknown owners is not expected to be solved immediately. My impression is that a certain legal framework has finally been established, albeit belatedly, to solve the problem.
The Civil Affairs Bureau of the Ministry of Justice has summarized and explained the details of this legal development in "Key Points of the 2021 Amendment to the Civil Code and Real Property Registration Law and the Law Concerning the National Treasury's Attribution of Inherited Land" (https://www.moj.go.jp/content/001377947.pdf
Laws and systems can be harmful if you don't know about them.
It is important to keep in mind that "there was a revision like this, as I recall." It would be beneficial to have a knowledge of the law, even if it is only to the extent of "I remember there was a revision like this.
Please keep this information in a corner of your mind in case you encounter land with unknown owners or need to go through the procedures of inheritance, etc.