Tatsuya Oki: How to Respond to the Issue of Land with Unknown Owners

Measures to address the issue of land with unknown owners have been discussed and legal reforms have been implemented from the perspectives of preventing the occurrence of land with unknown owners and facilitating the utilization of land.

From the perspective of prevention, inheritance registration will become mandatory starting April 1, 2024, and registration of changes to address, name, or designation will also become mandatory starting April 1, 2026. Additionally, the System for Handing Over Inherited Land to the National Treasury, which allows land with no utilization needs to be attributed to the national treasury under certain requirements, has been in effect since April 27, 2023.

From the perspective of facilitating land use, the 2021 Civil Code amendment created a new Management System for Land and Buildings with Unknown Owners, which has been in effect since April 1, 2023. As the author has actually used this system and experienced its ease of use, I would like to introduce the details of this system as one countermeasure for land with unknown owners.

Specific examples where land with unknown owners becomes an issue include cases where land acquisition for public or private projects cannot proceed because part of the land has an unknown owner, cases where someone wants to purchase and manage an adjacent plot of land or building that is poorly managed because the owner's whereabouts are unknown, or cases where someone wants to confirm boundaries with adjacent land to sell their own land but the owner of the adjacent land is unknown.

In such cases, the use of existing systems such as the Absentee Property Management System (where the owner is known but their location is unknown) or the Inheritance Property Management System (where the owner has died and there are no heirs) could be considered. However, in both cases, an application could only be made by an "interested party," and a person who simply wished to purchase the land did not necessarily qualify as an interested party. Furthermore, because these systems target all of the person's property including the land in question, the burden on the manager is heavy. Consequently, the applicant sometimes had to bear a deposit of nearly 1 million yen (to be used for the manager's remuneration, etc.), making the cost burden significant.

In contrast, under the newly created Management System for Land and Buildings with Unknown Owners (Civil Code Article 264-2 et seq.), the applicant must still be an "interested party." However, for example, the Q&A published by the Osaka District Court lists examples such as "owners of adjacent land who risk suffering disadvantages because the land or building with an unknown owner is not properly managed," "implementers of public works projects who intend to acquire the land for more appropriate management," and "private prospective buyers whose purchase plans are specific and who are recognized as having an interest in the use of the land and building."

The targets are "land (buildings) where the owner cannot be identified or their whereabouts cannot be known." This includes cases where the owner cannot be identified at all, cases where the owner's whereabouts are unknown, cases where the owner (registered titleholder) is deceased and there are no heirs, cases where the heirs' whereabouts are unknown, or cases where all heirs have renounced their inheritance. Before filing an application, it is necessary to conduct a thorough investigation into the location of the registered owner, the existence of heirs, and the location of heirs if they exist.

Furthermore, because this system specializes in the management of the specific land or building with an unknown owner that is causing the issue, applications can be made at a lower cost than traditional property management systems. In a case the author experienced (a case where an adjacent landowner wished to purchase a detached house that had been vacant for several years after the owner died with no heirs), the deposit was 300,000 yen.

Once the court appoints a manager and a management order is issued, the right to manage and dispose of the land and building belongs exclusively to the manager. The manager can also sell the land and building with the court's permission. While attorneys and judicial scriveners are often appointed as managers, land and house surveyors may be appointed in cases where the application was made for boundary confirmation.

In the aforementioned case experienced by the author, a management order was issued and an attorney was appointed as manager approximately three months after the application. The sale was completed approximately six months after the management order was issued, and the applicant successfully acquired the adjacent land and building that had been vacant for several years. Since the manager's remuneration is paid from the sale proceeds, the deposit was returned almost in full.

There were no particular arguments regarding procedural aspects, and the reduced cost burden made it easy to gain the applicant's understanding. I personally felt that it is a very easy system to utilize.

The manager also commented that they felt the system is overwhelmingly less burdensome and easier to use compared to other property management systems where they must manage all types of property, including other real estate, deposits, and debts. They mentioned they are handling two other similar management cases and expect the use of this system to increase further in the future.

The Management System for Land and Buildings with Unknown Owners enables acquisition under efficient procedures with a reduced financial burden, even in cases where one would have had to abandon land acquisition under previous systems. It is a system expected to be utilized in various situations involving land with unknown owners in the future.