Disclosure Items and Psychological Defects (Shinriteki Kashi): How to Think About These Properties

While house-hunting, you may come across a property listed with a "disclosure item" (kokuchi jikō). Information about a so-called psychological defect (shinriteki kashi) — such as a past death having occurred on the property — is organized based on the disclosure obligation under the Real Estate Brokerage Act and a guideline published by Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT). Here we check the basic way of thinking about it.

The bottom line: the guideline is the benchmark for whether disclosure is required

Whether disclosure of a psychological defect is required isn't decided mechanically by a single uniform rule — it's judged based on individual circumstances, using MLIT's "Guidelines on the Disclosure of Deaths" as a benchmark. Not every death-related case becomes subject to disclosure, and conversely, it's not the case that all of them are exempt from disclosure either. It's important to first understand the basic thinking behind the guideline.

The disclosure obligation under the Real Estate Brokerage Act

Under the Real Estate Brokerage Act (Takken Gyōhō), real estate brokers are obligated to disclose to buyers any matter that would materially affect their decision on whether to enter into the contract. Whether a past death occurred on the property is one matter that can fall within the scope of this disclosure obligation. If a broker neglects this obligation, it can later develop into a contractual dispute, so brokers are expected to handle this carefully.

The thinking behind the "Guidelines on the Disclosure of Deaths"

In 2021, MLIT published the "Guidelines on the Disclosure of Deaths by Real Estate Brokers" (Takken Gyōsha ni yoru Hito no Shi no Kokuchi ni Kansuru Guideline), organizing a practical standard for judgment. This guideline isn't meant to decide the necessity of disclosure uniformly — it's positioned as a benchmark for comprehensive judgment based on the nature of the case, the time elapsed, and other factors.

Cases where disclosure tends not to be required

Natural deaths such as old age or illness, and unfortunate accidental deaths occurring in the course of daily life — such as a fall — are, as a rule, treated as outside the scope of disclosure, since they're considered something that can ordinarily happen in daily life. For rental transactions, a standard has also been shown under which, once roughly three years have passed since the case, disclosure is generally not required — but no such time-elapsed provision is set for sales transactions.

Cases where disclosure tends to be required

Deaths from homicide, suicide, or an accident that required specialized cleaning (tokushu seisō) or major renovation are considered to have a significant impact on society, and can remain subject to disclosure regardless of how much time has passed. Handling differs depending on the nature of the case and how widely it became known, so if you're concerned, it's important to take the approach of carefully confirming through your agent.

Perspectives to keep in mind when considering a psychological-defect property

A property with a disclosure item is often priced below the surrounding market rate, but rather than judging on price alone, it's important to check the details of the disclosure and the property's condition before deciding. The basic decision axes for choosing a property are also useful in New or Pre-Owned: Organizing the Decision Axes. Don't hesitate to ask about anything you're concerned about during the important matters explanation as well. Since how family members feel about this varies from person to person, it's advisable to weigh the views of any family you'll be living with.

FAQ

Is an illness-related death always disclosed?

Natural deaths such as old age or illness are, as a rule, treated as outside the scope of disclosure, since they're considered something that can ordinarily occur in the course of daily life. That said, handling can differ depending on the individual circumstances.

Is the MLIT guideline legally binding?

The guideline itself isn't legally binding, but it's widely referenced in practice as a benchmark for how the disclosure obligation under the Real Estate Brokerage Act is applied.

Should I always avoid a property with a disclosure item?

It can't be said that you should avoid it categorically. It's important to take a case-by-case approach based on the details of the disclosure, the property's condition, price terms, and so on. Ask your agent about anything you're concerned about.

Summary

How disclosure items and psychological defects are handled is organized based on the disclosure obligation under the Real Estate Brokerage Act and MLIT's guidelines. Rather than a uniform judgment, it's important to take a case-by-case approach based on the details of each situation.