7. The Flow of Closing and Property Handover | Key Points to Know Before Completing the Sale

This post is a practical guide for foreign property owners selling property in Japan, explaining the process of closing and property handover, from receiving the remaining balance and completing the ownership transfer registration to handing over the property, along with the key points to understand before completing the sale.

What Are Closing and Property Handover?

After the Sales Contract has been signed, the transaction proceeds to Closing and Property Handover in accordance with the contract terms.

Closing and Property Handover represent the final stage of the property sale process in Japan.

At Closing, the seller receives the remaining balance and applicable settlement amounts, hands over the keys and related documents to the buyer, and the Judicial Scrivener proceeds with the necessary registration procedures, including the registration of ownership transfer and other required registrations.

Once these procedures have been completed, the property sale is finalized.

The Closing and Property Handover Process

In Japan, Closing and Property Handover generally proceed as follows.

Closing is often conducted at a financial institution (bank) or the office of a Judicial Scrivener.

The seller, buyer, real estate companies, Judicial Scrivener, and other relevant parties usually attend the Closing.

This process marks the final stage of the transaction, and careful preparation in advance helps ensure that the sale is completed smoothly.

What Are the Remaining Balance and Settlement Amount?

On the Closing Date, the buyer pays the remaining balance of the purchase price together with various settlement amounts.

These settlement amounts are intended to fairly allocate expenses related to the property between the seller and the buyer based on the agreed Closing Date.

The following items are commonly included in the settlement.

Before Closing, both parties should carefully confirm the settlement statement prepared for the transaction to ensure that all calculations are accurate.

The settlement items may vary depending on the type of property and the terms of the contract. In addition, other settlement amounts or transaction-related expenses may be payable depending on the specific agreement.

Registration Procedures

On the Closing Date, a Judicial Scrivener confirms the identities of both parties and verifies the required documents before proceeding with the necessary registration procedures.

These procedures generally include the registration of ownership transfer and, where applicable, other registrations such as the mortgage release registration.

Once the required registrations have been completed, the legal transfer of ownership is formally processed in accordance with Japanese law.

The registration procedures are typically completed within approximately one to two weeks. However, depending on the workload of the Legal Affairs Bureau and other circumstances, the process may take longer.

Property Handover

After the remaining balance has been received and the required registration procedures have been completed, the seller hands over the property to the buyer.

Property handover generally includes:

·         Handing over all keys to the property

·         Delivering documents related to the property and its facilities

·         Providing instruction manuals, warranties, and other available materials, where applicable

Once the property has been handed over, the seller's contractual obligations regarding delivery of the property are generally fulfilled.

Preparations Before Closing and Handover

To ensure that the Closing Date proceeds smoothly, it is important to confirm the necessary items in advance.

Before Closing and Property Handover, sellers should check the following points:

·         Whether all required documents have been prepared

·         Whether there are any defects or missing items in the documents required for registration procedures

·         Whether keys and related documents have been prepared

·         Whether the interior of the property has been checked before handover

By completing these preparations in advance, the procedures on the Closing Date can proceed more smoothly.

Summary

Closing and Property Handover are the final important steps in selling real estate in Japan.

On the Closing Date, the seller receives the remaining balance and applicable settlement amounts, hands over the keys and related documents, and the Judicial Scrivener proceeds with the necessary registration procedures.

By preparing the required documents and handover items in advance, and by coordinating closely with the real estate company and Judicial Scrivener, sellers can complete the sale smoothly and efficiently.

Dana Estate Supports Foreign Clients Through Closing and Property Handover

At Dana Estate, we support our clients through the Closing and Property Handover process after the Sales Contracthas been signed.

We carefully guide you through each step, from confirming the required documents to explaining the flow of procedures on the Closing Date.

If you are considering selling property in Japan, please feel free to contact Dana Estate for professional advice and personalized support.