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New legal tools give communities a way to address abandoned properties when owners cannot be found

In the previous article, I explained how disputes over inheritance, the absence of heirs, and inheritance renunciation have resulted in many properties being left abandoned without any inheritance procedures being completed. I also discussed how the system for appointing an "Administrator of Estate Property" is one of the main legal mechanisms for returning such properties to productive use, but that the system is difficult to utilize in practice and therefore rarely used.

In this article, I will explain two new legal systems introduced in 2023 in response to these issues: the Unknown Owner Land Management System and the Unknown Owner Building Management System.

As explained in the previous article, an Administrator of Estate Property is responsible for managing and settling all of the deceased person's assets and liabilities. Because the administrator must deal with the entire estate, the workload tends to be substantial, and the advance payment required by the court is often expensive.

In addition, applications for the appointment of an Administrator of Estate Property can generally only be filed by heirs or interested parties such as creditors or local governments attempting to recover unpaid taxes. Nearby residents who are suffering inconvenience due to abandoned properties were not included among those eligible to apply.

However, the people most directly affected by abandoned properties are often the neighbors who live nearby. They may suffer from overgrown vegetation, pest infestations, dangerous structures, or other problems caused by land and buildings that have been left unmanaged after the owner's death.

To address these problems, Japan introduced the Unknown Owner Land Management System and the Unknown Owner Building Management System. Under these systems, not only heirs, creditors, and government authorities, but also local governments planning public projects, neighboring landowners, and in some cases individuals or organizations with a legally recognized interest in purchasing or utilizing the property may apply to the district court for the appointment of a manager.

Unlike an Administrator of Estate Property, who is responsible for settling the deceased person's entire estate and all outstanding liabilities, these new systems deal with individual properties on a case-by-case basis. As a result, the costs and procedural burden can be somewhat lower.

However, these systems are not easily accessible to everyone. In order to file an application, three conditions generally must be satisfied:

1. The land or building owner cannot be identified or their whereabouts cannot be determined.
2. The applicant must have a legally recognized interest in the property.
3. Court intervention through a management order must be considered necessary.

Although management costs and the appointed manager's compensation are, in principle, borne by the owner of the property, the owner is often unknown or cannot be contacted. As a result, applicants are frequently required to advance these costs in the form of a deposit paid to the court.

The requirement that "the owner cannot be identified or located" does not simply mean that the owner is unknown. It refers to situations in which the owner cannot be identified or contacted despite reasonable efforts to investigate. Applicants are generally expected to demonstrate that they made sufficient efforts to locate and contact the owner before filing their application.

Ownership investigations usually begin by obtaining a property registration certificate from the Legal Affairs Bureau with jurisdiction over the property. This allows the applicant to identify the registered owner and any related rights such as mortgages.

After that, further investigation is often necessary in order to determine the current whereabouts of the owner or other rights holders. In many cases, this may require examining family registers or making additional court applications, and professional assistance from lawyers or judicial scriveners is often necessary. If the court determines that the applicant did not make sufficient efforts to locate the owner, the application may be rejected.

The requirement that a management order be "necessary" generally applies to situations such as:

• overgrown vegetation causing pest problems,
  illegal dumping,
• homeless individuals occupying the property,
• or buildings that are at risk of collapse and pose a danger to surrounding residents.

Applicants should be prepared to demonstrate this necessity clearly and concretely. Photographs of the property and statements from neighboring residents can be helpful evidence.

It is also common for abandoned land and buildings to contain personal belongings or illegally dumped waste. For this reason, management orders may sometimes extend not only to the land or building itself but also to movable property located on the site and owned by the same owner.

Once the court appoints a manager, that manager may carry out tasks such as removing weeds, exterminating pests, performing basic cleaning and maintenance, and repairing damaged areas to prevent further deterioration.

With court approval, the manager may also sell the land, construct or remove structures, or initiate legal proceedings when necessary.

Therefore, if the land or building next to your property has been abandoned and its owner cannot be identified or located, it may be possible to use this system to have a court-appointed manager take over the property's management responsibilities.

Furthermore, if the court later authorizes the sale of the property as part of the management process, a person with a legally recognized interest in acquiring or utilizing the property may potentially be able to purchase it through procedures supervised by the appointed manager.

However, there is no guarantee that the property will actually be offered for sale, nor that a particular applicant will be able to purchase it even if a sale occurs. The eventual purchase price is also uncertain. In addition to the purchase cost itself, applicants should be prepared for legal fees, court deposits, and complicated procedures.

This article omits many of the finer details of the system, so anyone considering making use of it should consult a lawyer or judicial scrivener.

Although this is not a system that can be used casually or inexpensively, it is undoubtedly one of the main legal tools available to people who are affected by abandoned properties created by the shortcomings of Japan's inheritance system.