Who Prepares a Property Purchase Contract in Japan?
In Japan, the real estate brokerage typically prepares the property purchase contract—not the buyer’s lawyer.
That surprises many American and European buyers, particularly those accustomed to lawyers drafting or negotiating the primary transaction documents.
However, buying property in Japan follows a highly structured process. The real estate agent, lawyer and judicial scrivener each perform a different role—and the order in which they become involved matters.
Who prepares the property purchase contract in Japan?
In a typical Japanese property transaction, the licensed real estate brokerage prepares or coordinates the principal sale documents.
These usually include:
The Sale and Purchase Agreement
The Statement of Important Matters
Supporting property and transaction disclosures
Japanese real estate brokerages operate under the Real Estate Brokerage Act and are supervised by the relevant prefectural governor or the Ministry of Land, Infrastructure, Transport and Tourism, depending on the scope of their licence.
The brokerage’s role extends beyond introducing the buyer and seller. It is responsible for managing the transaction process and delivering specific information and documentation required by law.
What is the Statement of Important Matters?
Before the buyer signs the Sale and Purchase Agreement, a licensed real estate transaction agent must explain the Statement of Important Matters, known in Japanese as the jūyō jikō setsumeisho.
The statement discloses specified material information about the Japanese property and the proposed transaction. Depending on the asset, this may include:
Registered ownership rights
Mortgages, easements and other encumbrances
Zoning and planning restrictions
Road access
Utilities and infrastructure
Building restrictions
Deposits and payment terms
Cancellation and termination provisions
Management rules
Other material conditions affecting the property
This disclosure requirement is established under Article 35 of Japan’s Real Estate Brokerage Act.
The Act also requires the brokerage to deliver written documentation containing the prescribed terms of the completed transaction. This is commonly associated with the Sale and Purchase Agreement and is addressed under Article 37.
There are statutory obligations concerning accuracy, disclosure and explanation, with administrative consequences where licensed brokerages fail to comply.
When should a foreign buyer appoint a lawyer?
The fact that the real estate agent prepares the purchase contract does not mean the lawyer should enter the transaction at the end.
For a foreign buyer, legal and tax advice may be required before the brokerage finalises the Sale and Purchase Agreement.
An adviser may need to consider whether the buyer should acquire the property:
In their personal name
Through a Japanese gōdō kaisha or GK
Through a kabushiki kaisha or KK
Through a TMK structure for qualifying investment transactions
Through another domestic or international ownership structure
The appropriate structure depends on the property, investment strategy, financing, tax position and intended use. A TMK, for example, is a specialised investment structure rather than a standard vehicle for every foreign property buyer.
These decisions should be considered before the buyer’s name and ownership structure are fixed in the transaction documents.
What does the lawyer review?
Once the draft Sale and Purchase Agreement and Statement of Important Matters are issued, a lawyer engaged by the buyer can review the transaction from the buyer’s legal perspective.
Depending on the scope of the appointment, that review may include:
The proposed ownership structure
Contractual rights and obligations
Conditions precedent
Representations and warranties
Deposit protection
Default and termination provisions
Access or easement arrangements
Development and planning risks
Management or operating agreements
Foreign-investment and tax considerations
Not every residential purchase in Japan requires a lawyer. However, independent legal review becomes more important for development land, hospitality assets, corporate acquisitions and transactions involving complex ownership or operating structures.
What does the judicial scrivener do?
The judicial scrivener, or shihō shoshi, performs a different role from the real estate agent and lawyer.
At settlement, the judicial scrivener confirms the documents required for registration and submits the application to register the transfer of ownership with Japan’s Legal Affairs Bureau. The scrivener may also handle mortgage registration and other related filings.
The judicial scrivener does not replace the buyer’s lawyer or determine the buyer’s broader investment and ownership strategy.
When should foreign buyers begin preparing?
The biggest mistake many foreign buyers make is waiting until the purchase contract has already been prepared before considering legal, tax and ownership questions.
By that stage, the commercial terms may have been agreed, the buyer’s identity inserted into the documents and the signing timetable established.
The better sequence is:
Identify the property and proposed commercial terms.
Consider the ownership and investment structure.
Appoint the necessary legal and tax advisers.
Review the Sale and Purchase Agreement and Statement of Important Matters.
Complete final due diligence and signing.
Settle the transaction and register the transfer of ownership.
In Japan, preparation comes before paperwork.
The system is structured—and when foreign buyers understand who does what and enter the process early enough, it works.
Disclaimer: This article provides general information only and does not constitute legal, tax, financial or investment advice. Transaction procedures and professional responsibilities may vary according to the property and transaction structure.
Photo: Margo Evardson/Pexels.
