Heirs? Apparently

This land is your land?: Property marker in the middle of a residential street

An ongoing headache for the government, in particular the land and justice ministries, is all the land in Japan whose titleholders are only vaguely determined. The reason this is a problem, of course, is that the central and local tax authorities don’t know to whom they should send property tax bills, but also when public works projects are being planned that involve the appropriation of land the relevant authorities don’t know whom to deal with. For a more detailed discussion of this problem see here, but suffice to say that the volume of property nationwide with undetermined owners amounts to a piece of land the size of Kyushu.

The reason for this confusion has to do with inheritance laws. When a title holder dies, if no formal transfer of the property has taken place, their property automatically passes to their heirs, meaning spouse first and then children. If those heirs never properly register the land in their names, then it then passes on to all their heirs when they die, and so on. According to a Nov. 18 article in the Nihon Keizai Shimbun, there is one piece of land—location undisclosed—that has up to 700 potential titleholders since the land has not been re-registered since the registered titleholder died many years ago. The amount of money and resuources needed to sort out these matters is beyond the ability of local governments. Of course, in most cases, the land is worth probably nothing to the family—maybe it’s on the top of a mountain or in a remote forest—and they simply don’t want to be taxed for it. However, a good portion is located in already developed areas. In any case, the local government or maybe a developer may want to exploit that land someday. The central government would like to have everything properly registered.

The Civil Code states that the titleholder must be consulted in order to dispose of the land or any portion of it, so if the government really wants to solve this problem it should amend the law, and that seems to be the plan. The Nikkei article says the government is now considering an amendment to the law that will allow the sale of plots of land or any portions of it if a certain number of heirs agree to the sale. At present, all titleholders must agree to such disposal. The land and law ministries plan to send this bill to the Diet in 2020, and are currently carrying out research that will better define vague property lines. As of 2017, about 16 percent of the land in 80,000 “locations” classifed as “urban,” meaning designated for residences and commercial businesses, does not have a definite titleholder in accordance with existing records. The portion of undetermined land is probably more, since the 16 percent mainly represents lots that are being disputed for some reason—either neighbors want to buy the land for expansion or local governments want to use it for parks and other public facilities or a developer wants to build a condominium on it. None of these entities have the money to negotiate with all the heirs, and according to most local laws any property line disputes have to be mediated through the consultation of surveyors and other experts, and those services have to be paid for by the parties involved.

On the surface, passing such a law should be easy. All the government has to do is specify the problem and how many of the identifiable heirs or titleholders must be located in order to dispose of the land. But because Japan has such a weak concept of eminent domain, it’s likely there will still be limitations to what the government can do unilaterally. And it’s apparent that people who have rights to a piece of land but are coy about being located have a reason for being coy. The main obstacle will be defining how much work should be involved in “notifying” all the interested parties. They must also determine if unpaid back taxes can be waived. One solution, according to Nikkei, would be a condition that the land in question must be sorted out within a certain timeframe due to health or safety concerns, and while that may sound like a limiting condition itself, the government has never been averse to bending such laws when it serves them.

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