What Should You Check in the Important Matters Explanation? Documents to Read Before You Sign
When you buy property in Japan, you receive an 'important matters explanation' (jūyō jikō setsumei) before the sales contract is signed. It is full of technical terms, and for overseas buyers with limited Japanese it is hard to judge everything on the spot.
This article explains the purpose of the explanation, the main items it covers, how it differs from the contract, and what to watch for when you take it online.
What is the explanation, and when do you receive it?
Under Article 35 of the Real Estate Brokerage Act, a licensed real estate transaction specialist (takken-shi) must deliver a written statement, known as the Article 35 document, and explain it to the buyer before the contract is concluded. The aim is to disclose the information a buyer needs to decide.
The specialist is expected to show their licence card when giving the explanation. In practice, asking for a draft of the document a few days beforehand gives you time for translation and expert review.
What items are covered?
The core items concern the property itself: registered rights, legal restrictions under laws such as the City Planning Act and the Building Standards Act, any burden from private roads, and the state of water, electricity, gas and drainage. Terms of the deal are also covered, such as money exchanged besides the price, protection of the deposit, how a failed loan is handled, and cancellation or liquidated damages.
For used homes, whether a building inspection was carried out and a summary of its results, as well as the property's location on flood hazard maps, are also covered. These points often lead to disputes after handover, so read them with particular care.
Numbers worth remembering
- Main documents in a purchase
- 2documents
- Basis of the explanation
- 35Article
- Online sales explanations in full operation
- 2021
Article 35 document (before) and Article 37 document (after)
Real Estate Brokerage Act, Article 35
Start of operation per MLIT (please verify)
How does it differ from the contract (Article 37 document)?
The important matters document is an explanatory material that helps you decide whether to proceed. The sales contract, by contrast, fixes what the parties agreed, and under Article 37 it also serves as the document delivered without delay once the contract is concluded.
If questions remain after the explanation, avoid signing just because the contract date is close. It also helps to compare the explanation document against the contract for any discrepancies before signing.
Legal basis
- Real Estate Brokerage Act, Art. 35
- A licensed specialist is generally required to deliver and explain the important matters in writing to the buyer before the contract is concluded.
- Real Estate Brokerage Act, Art. 37
- Once the contract is concluded, a document stating the contract terms is generally required to be delivered without delay.
- Enforcement Regulations of the Act, Art. 16-4-3
- Sets out the detailed items to be explained, such as the property's location on flood hazard maps.
What should you watch for when taking it online from overseas?
'IT explanation' means receiving the explanation by video call. With the buyer's consent it is generally possible from abroad. Arrange for the document to reach you beforehand, by e-mail or post, and confirm your connection and whether an interpreter will join.
Do not just listen. Ask about anything unclear and keep a record of the answers. It is also wise to ask the agent beforehand whether recording is allowed and how questions will be logged.
In person versus online (general summary)
| Item | In person | Online |
|---|---|---|
| Who explains | Licensed specialist | Licensed specialist |
| Receiving documents | Handed over on the spot | Received in advance by e-mail or post |
| Buyer preparation | Scheduling | Connection, advance review, buyer's consent |
Common oversights and fixes
✕Hearing the explanation for the first time on the day and reaching the contract date without understanding it.
→Obtain a draft in advance and have it translated or reviewed before the session.
✕Skipping the inspection and hazard map entries, and finding problems after handover.
→For used homes, focus on whether an inspection was done, its summary and the hazard map entry.
✕Not checking the loan clause deadline, so the clause expired while screening dragged on.
→Check the conditions and deadline for cancellation when a loan fails in both documents.
Before-and-after checklist
- I received a draft of the document in advance
- I checked registered rights and any private road burden
- I checked legal restrictions and the zoning
- I checked deposit protection and the loan-failure terms
- I checked the inspection and hazard map entries
- I compared the explanation document with the contract
FAQ
- Q. Who gives the explanation?
- A. A licensed real estate transaction specialist. A sales representative without that qualification cannot give it.
- Q. Do I have to sign after hearing it?
- A. No. The explanation only provides material for your decision; hearing it does not conclude a contract.
- Q. Can I take it if my Japanese is limited?
- A. It is generally given in Japanese. Talk to the agent early about an interpreter or a translated document.
In the SUMIMOTO Hub app, our 24-hour AI advisor explains the terms and structure of the important matters document in several languages. Please also confirm with a qualified professional before final decisions.
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