TOP » BLOG » What is the "Explanation of Important Matters" in Japan?
Updated: 2026.1. 9
Introduction
When purchasing real estate in Japan, foreign buyers--especially Americans--encounter a document that has no direct equivalent in the United States:
the Explanation of Important Matters (重要事項説明書, Jūyō Jikō Setsumeisho).
This document plays a role that, in some respects, overlaps with what inspections and due diligence accomplish in U.S. transactions--but it is fundamentally different in structure and timing.
Under Japanese law, buyers must receive, review, and be fully explained this document before signing a legally binding purchase contract.
The explanation is not optional and must be conducted by a nationally licensed professional.
1. What Is the Explanation of Important Matters?
The Explanation of Important Matters is a legally mandated disclosure document prepared by the seller's real estate brokerage under the Real Estate Transaction Business Act.
Its purpose is to ensure that buyers receive all material legal, physical, and regulatory information necessary to make an informed decision before entering into a binding contract.
Importantly, the investigation and explanation of this document must be carried out by a licensed Real Estate Transaction Agent, a nationally certified professional.
Key Characteristics
Detailed written document, often 20-100 pages
Must be delivered and explained verbally
Explanation must be conducted by a licensed Real Estate Transaction Agent
Must take place before execution of the Sale and Purchase Agreement
2. Why This Document Exists
In Japan, canceling a real estate contract after signing is difficult and often costly.
For this reason, Japanese law emphasizes pre-contract investigation and disclosure, rather than post-contract remedies.
The Explanation of Important Matters exists to shift all critical decision-making before commitment, not after.
Legal Philosophy
"Informed consent before commitment."
3. How This Differs from U.S. Real Estate Transactions
In the United States, inspections and due diligence are typically conducted after contract execution, during contingency periods.
Buyers may withdraw based on inspection results or financing issues.
In Japan, by contrast, these investigations and disclosures are completed before the contract is signed, through the Explanation of Important Matters.
Comparison Summary
|
United States |
Japan |
|
Sign first, investigate after |
Investigate first, sign after |
|
Multiple disclosure & inspection documents |
One comprehensive disclosure document |
|
Broad post-contract contingencies |
Limited post-contract exit |
|
Buyer-driven inspections |
Agent-driven, legally mandated disclosure |
4. What the Explanation of Important Matters Covers
The document covers many matters that U.S. buyers would normally expect to review during inspections, title review, or due diligence.
Major Categories｜
Legal title and registration
Land boundaries and easements
Zoning and building restrictions
Utilities and infrastructure
Condominium management matters
Financing and contract terms
Property condition and risk factors
Environmental and neighborhood issues
5. Important Points to Confirm
Buyers should carefully confirm both property-related matters and contract-related conditions, including costs beyond the purchase price, cancellation terms, and allocation of risk.
6. Practical Advice for Foreign Buyers
Request the document in advance
Reviewing the document only on the contract day is risky. Always request a copy in advance.
Ask for a revised document if changes occur
If contract terms change, the Explanation of Important Matters must be reissued.
Sign only when fully satisfied
Once signed, withdrawal is difficult. Sign only when all explanations are fully understood.
7. Final Takeaway
The Explanation of Important Matters is the foundation of buyer protection in Japanese real estate transactions.
For American buyers, understanding this document is key to:
Avoiding misunderstandings
Making informed decisions
Entering the transaction with confidence
In Japan, the rule is simple:
Know everything first. Sign only after.
＜Explanation of Important Matters Key Items for Land and Building Sale in Japan＞
1. Transaction Type
取引態様（とりひきたいよう）
This item explains the role of the real estate company in the transaction.
It shows whether the company represents the seller, the buyer, or acts as an intermediary.
This is important because it affects who the agent owes duties to.
2. Purchase Price and Payment Terms
売買代金・支払条件
This section explains the total purchase price, the deposit amount, and when and how payments must be made.
It also explains how taxes and fees are settled at closing.
3. Deposit (Earnest Money)
手付金（てつけきん）
The deposit is money paid when signing the contract.
In Japan, it often works as a "cancellation deposit," meaning the buyer may cancel by forfeiting it within a limited period.
4. Contract Cancellation
契約解除（けいやくかいじょ）
This item explains under what conditions the contract can be canceled.
After signing, cancellation is limited and may involve penalties.
5. Damages and Penalties
損害賠償・違約金
This section explains the financial penalties if either party breaks the contract.
It sets limits on how much compensation may be claimed.
6. Contract Non-Conformity Liability
契約不適合責任（旧・瑕疵担保責任）
This explains whether the seller is responsible if the property does not match the contract description.
In many resale cases, the seller's responsibility is limited or excluded.
7. Property Identification (Registry Information)
物件の表示（登記情報）
This confirms the legal identity of the land and building based on official registration records.
It ensures the buyer is purchasing the correct property.
8. Ownership Rights
所有権（しょゆうけん）
This explains who legally owns the property and when ownership will transfer to the buyer.
In Japan, ownership transfers after full payment and registration.
9. Mortgages and Liens
抵当権・担保権
This shows whether there are mortgages or other claims on the property.
Any existing mortgage must usually be removed before closing.
10. Relationship Between Land and Building
土地と建物の関係
In Japan, land and buildings are legally separate assets.
This section explains whether the buyer is purchasing both or only the building.
11. Land Area and Boundaries
土地面積・境界
This explains how the land area was measured and whether boundaries with neighbors are confirmed.
Unclear boundaries may cause future problems.
12. Roads and Access
接道状況（せつどう）
This item explains whether the land is legally connected to a road.
Without proper road access, rebuilding may not be allowed.
13. Zoning (City Planning Law)
用途地域・都市計画
This explains what types of buildings and uses are allowed.
Zoning rules limit how the property can be used or rebuilt.
14. Building Restrictions
建築制限（けんぺい率・容積率など）
This shows limits on building size, height, and volume.
These rules affect renovations and rebuilding plans.
15. Other Legal Restrictions
その他の法令制限
This section lists other laws that may restrict use, such as farmland rules, disaster regulations, or scenic protection laws.
16. Land Shape and Topography
土地の形状・高低差
This explains the shape, slope, and level differences of the land.
Steep land or retaining walls may increase construction risk and cost.
17. Building Overview
建物の概要
This item explains the building's age, structure, and construction type.
Older buildings may have fewer legal protections.
18. Building Confirmation and Inspection
建築確認・検査済証
This explains whether the building was legally approved and inspected.
Missing documents may limit rebuilding or financing.
19. Building Condition
建物の状態
This describes known defects such as leaks, termites, or aging.
Buyers should review this carefully, especially for resale properties.
20. Utilities
インフラ（上下水・電気・ガス）
This explains water, sewer, gas, and electricity connections.
Private systems may require extra maintenance or cost.
21. Condominium Ownership (If Applicable)
区分所有（マンション）
This explains private units, common areas, and shared land rights.
Condominium ownership involves shared responsibilities.
22. Condominium Management
管理体制
This explains how the building is managed and who manages it.
Good management is important for long-term value.
23. Management Fees and Reserve Funds
管理費・修繕積立金
This explains monthly fees and savings for future repairs.
These are ongoing costs for condominium owners.
24. Major Repairs
大規模修繕
This explains past and planned large-scale repairs.
Unexpected repairs may require extra payments.
25. Environment and Neighborhood
周辺環境
This explains nearby facilities, noise, odors, and future development plans.
These factors affect comfort and value.
26. Psychological Factors
心理的瑕疵
This discloses deaths, accidents, or other sensitive matters.
Such factors may affect personal comfort and resale value.
27. As-Is Delivery
現状有姿引渡し
This means the buyer accepts the property in its current condition.
After closing, the seller usually has no repair obligation.
28. Handover Conditions
引渡条件
This explains when and how the property will be handed over, including vacant status and remaining items.
29. Foreign Buyer Matters
外国人買主関連事項
This covers foreign exchange reporting, tax agents, and overseas remittance issues specific to non-residents.
30. Special Clauses
特約条項
This lists any special agreements between buyer and seller that differ from standard terms.
31. Explanation by Licensed Agent
宅地建物取引士による説明
A licensed agent must explain all important matters and show their license.
This ensures legal compliance.
32. Buyer Acknowledgment
買主確認
The buyer confirms that all important matters were explained and understood before signing.
IMG Official Note to Foreign Buyers
IMG does not expect foreign buyers to understand Japanese real estate documents alone.
We provide English summaries, visual explanations, and interpretation support to help you make informed decisions.
