Act on Building Unit Ownership, etc.

Link to law: http://www.japaneselawtranslation.go.jp/law/detail_download/?ff=08&id=2015
Published: 2008

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Act on Building Unit Ownership, etc.

Chapter I Building Unit Ownership

Section 1 General Provisions (Articles 1 to 10)

Section 2 Common Elements, etc. (Articles 11 to 21)

Section 3 Right to Use the Grounds (Articles 22 to 24)

Section 4 Managers (Articles 25 to 29)

Section 5 Bylaws and Meetings (Articles 30 to 46)

Section 6 Incorporated Management Associations (Articles 47 to 56-7)

Section 7 Measures Against Persons Who Violate Their Obligations (Articles 57 to 60)

Section 8 Restoration and Reconstruction (Articles 61 to 64)

Chapter II Housing Complexes (Articles 65 to 70)

Chapter III Penal Provisions (Articles 71 and 72)

Supplementary Provisions

Chapter I Building Unit Ownership

Section 1 General Provisions

(Building Unit Ownership)

Article 1 When there are multiple portions into which a single building is structurally divided that are independent residences, stores, offices, warehouses, or any other spaces that can be used as if they were buildings, each of such portions may be made the subject of ownership, pursuant to the provisions of this Act.

(Definitions)

Article 2 (1) In this Act, "unit ownership" means ownership whose subject is the portion of a building provided for in the preceding Article (excluding one that is treated as a common element pursuant to the provisions of Article 4, paragraph (2)).

(2) In this Act, "unit owner" means a person with unit ownership.

(3) In this Act, "exclusive element" means a portion of a building that is a subject of unit ownership.

(4) In this Act, "common element" means a portion of a building that is not an exclusive element, the ancillary components of a building that are not included in an exclusive element, and any outbuilding that is treated as a common element pursuant to the provisions of Article 4, paragraph (2).

(5) In this Act, the "grounds of a building" and "building's grounds" means the land on which the building is located and the land that is treated as the grounds of the building pursuant to the provisions of Article 5, paragraph (1).

(6) In this Act, "right to use the grounds" means the rights related to the grounds of the building due to ownership of an exclusive element.

(Association of Unit Owners)

Article 3 All of the unit owners together may organize an association to manage the building, its grounds, and its ancillary facilities and, pursuant to the provisions of this Act, may hold meetings, establish bylaws, and assign a manager. The same shall apply when a common element that should clearly be provided for the common use of only some of the unit owners (hereinafter referred to as a "partial common element"), will be managed by such unit owners.

(Common Elements)

Article 4 (1) No corridor or stairway leading to multiple exclusive elements, nor any other portion of the building that, due to structural considerations, should be provided for the common use of all or some of the unit owners, shall be the object of unit ownership.

(2) The portion of the building set forth in Article 1 and any outbuildings may be treated as common elements pursuant to the bylaws. In this case, such portion of the building and outbuildings may not be duly asserted as a common element against a third party unless it has been registered to that effect.

(Specification of the Grounds of the Building by the Bylaws)

Article 5 (1) Gardens, passages, and other land managed or used by the unit owners as an integral part of the building and the land on which the building is located may be treated as the grounds of the building pursuant to the bylaws.

(2) When land on which a building is located has become land other than that on which the building is located due to the partial destruction of the building, such land shall be deemed to have been specified as the grounds of the building by the bylaws pursuant to the provisions of the preceding paragraph. The same shall apply when part of the land on which a building is located has become land other than that on which the building is located due to the parcellation of the relevant land.

(Rights and Obligations, etc. of Unit Owners)

Article 6 (1) Unit owners shall not engage in any conduct that is harmful to the preservation of the building or any other conduct that is contrary to the common benefit of the unit owners with regard to the management or use of the building.

(2) A unit owner may, within the scope necessary to preserve or improve his/her exclusive element or a common element, request the use of the exclusive element of another unit owner or of a common element not in his/her ownership. In this case, when the other unit owner has incurred any damages, the requesting unit owner shall pay compensation therefor.

(3) The provisions of paragraph (1) shall apply mutatis mutandis to a possessor of an exclusive element who is not a unit owner (hereinafter referred to as the "possessor").

(Statutory Liens)

Article 7 (1) With regard to any claim a unit owner holds against another unit owner in relation to a common element, the grounds of the building, or ancillary facilities of the building that are other than a common element, and with regard to any claim that a unit holder holds against another unit owner based on the bylaws or meeting resolutions, the first unit holder holds a statutory lien on the obligor's unit ownership (including the rights related to the common elements and the right to use the grounds) and on the movables with which he/she has furnished the building. The same shall apply to any claims held against a unit owner by the manager or by the incorporated management association in relation to the performance of their duties or business activities.

(2) The statutory lien referred to in the preceding paragraph shall be deemed to be a statutory lien on the expenses for common benefits, with regard to its order of priority and the effect thereof.

(3) The provisions of Article 319 of the Civil Code (Act No. 89 of 1896) shall apply mutatis mutandis to the statutory lien provided for in paragraph (1).

(Liability of a Specific Successor)

Article 8 The claims provided for in paragraph (1) of the preceding Article may be exercised against the specific successor of the unit owner who is the obligor.

(Presumption on Defects in the Erection or Preservation of Buildings)

Article 9 When any defect in the erection or preservation of a building has caused damage to others, such defect shall be presumed to exist in the erection or preservation of the common element.

(Right to Demand the Sale and Transfer of Unit Ownership)

Article 10 When a unit owner does not have the right to use the grounds, a person who has the right to claim the removal of such unit owner's exclusive element may demand that such unit owner sell and transfer his/her unit ownership thereto at its current market value.

Section 2 Common Elements, etc.

(Co-ownership of Common Elements)

Article 11 (1) Common elements shall be co-owned by all the unit owners; however, partial common elements shall be co-owned by the unit owners who should have the common use of such elements.

(2) The provisions of the preceding paragraph shall not preclude any provisions to the contrary in the bylaws; however, except in the case provided for in Article 27, paragraph (1), a person other than a unit owner may not be specified as the owner of a common element.

(3) The provisions of Article 177 of the Civil Code shall not apply to a common element.

Article 12 Where a common element is co-owned by all or some of the unit owners, such common element shall be co-owned as provided for in the provisions of the following Article to Article 19.

(Use of Common Elements)

Article 13 Each co-owner may use a common element in accordance with the purpose of use thereof.

(Proportion of Shares in a Common Element)

Article 14 (1) The share of each co-owner shall be in proportion to the floor space of the exclusive element held by such co-owner.

(2) In the case referred to in the preceding paragraph, when a partial common element (excluding outbuildings) has a floor space, the floor space of that partial common element shall be divided in proportion to the floor space of the exclusive element held by each unit owner who should co-own that partial common element, and the relevant proportions shall be included in the calculations of the floor space of each of those unit owners' exclusive elements.

(3) The floor space referred to in the preceding two paragraphs shall be calculated as the horizontally projected area of the element that is surrounded by the delineating surfaces of the walls and other partitions.

(4) The provisions of the preceding three paragraphs shall not preclude any provisions to the contrary in the bylaws.

(Disposal of Shares in a Common Element)

Article 15 (1) The share of a co-owner shall accompany the disposition of the exclusive element held by that co-owner.

(2) A co-owner may not, unless otherwise provided for in this Act, dispose of his/her share separately from the exclusive element held thereby.

(Management of a Partial Common Element)

Article 16 In the management of a partial common element, management that is related to the interests of all unit owners or that is provided for in the bylaws under Article 31, paragraph (2) shall be carried out by all unit owners, and anything other management shall be carried out by the unit owners who should co-own such partial common element.

(Changes to a Common Element)

Article 17 (1) Changes to a common element (excluding those that do not involve significant changes to the shape or function of a common element) shall be decided by resolution at a meeting, by at least a three-fourths majority of the unit owners and a three-fourths majority of the votes; however, this fixed number of unit owners may be reduced to half by the bylaws.

(2) In the case referred to in the preceding paragraph, when the changes to the common element are to have a particular influence on the use of an exclusive element, the approval of the owner of that exclusive element shall be obtained.

(Management of Common Elements)

Article 18 (1) Matters concerning the management of the common elements shall, except in the case referred to in the preceding Article, be decided by resolution at a meeting; however, each co-owner may engage in the act of preservation.

(2) The provisions of the preceding paragraph shall not preclude any provisions to the contrary in the bylaws.

(3) The provisions of paragraph (2) of the preceding Article shall apply mutatis mutandis pursuant to the case referred to in the main clause of paragraph (1).

(4) Entering into a casualty insurance contract with regard to a common element shall be deemed to be a matter that concerns the management of the common elements.

(Burdens and Collection of Profits from Common Elements)

Article 19 Each co-owner shall assume the burdens of the common elements and collect profits arising from such common elements in proportion to his/her share, except as otherwise provided for in the bylaws.

(Authority of the Managing Owner)

Article 20 (1) Any unit owner specified as the owner of a common element by the bylaws pursuant to the provisions of Article 11, paragraph (2) assumes the duty of managing such common element on behalf of all the unit owners (with regard to a partial common element, the unit owners who are to co-own such partial common element). In this case, the first-mentioned unit owner is entitled to demand that the relevant unit owners pay reasonable management expenses.

(2) The owner of a common element referred to in the preceding paragraph may not change a common element prescribed in Article 17, paragraph (1).

(Application Mutatis Mutandis of Provisions Concerning Common Elements)

Article 21 Where the grounds of a building or ancillary facilities that are other than a common element (including rights related thereto) are co-owned by unit owners, the provisions of Articles 17 through 19 shall apply mutatis mutandis to such grounds or ancillary facilities.

Section 3 Right to Use the Grounds

(Prohibition of Separate Disposition)

Article 22 (1) Where the right to use the grounds is an ownership right or any other right held by multiple persons, the unit owner may not dispose of his/her exclusive element separately from the right to use the grounds that is connected with his/her exclusive element; however, this shall not apply where otherwise provided in the bylaws.

(2) In the case referred to in the main clause of the preceding paragraph, where the unit owner holds two or more exclusive elements, the proportion of the right to use the grounds for each exclusive element shall be based on the proportion specified in Article 14, paragraphs (1) through (3); however, when a proportion different from this proportion is specified in the bylaws, the right to use the grounds for each exclusive element shall be based on that proportion.

(3) The provisions of the preceding two paragraphs shall apply mutatis mutandis where the right to use the grounds that is held by the person who owns all the exclusive elements in the building is an ownership right or any other right that is held by a single person.

(Limitations on Claims of Invalidity of Separate Disposition)

Article 23 With regard to disposition of an exclusive element or of the right to use the grounds that is in violation of the provisions of the main clause of paragraph (1) of the preceding Article (including the cases where applied mutatis mutandis pursuant to paragraph (3) of said Article), the invalidity of such disposition may not be asserted against another party who is without knowledge of its invalidity; however, this shall not apply where the exclusive elements and the right to use the grounds are disposed of after it has been registered that they may not be disposed of separately, as provided for in the Real Property Registration Act (Act No. 123 of 2004).

(Exclusion from Application of Article 255 of the Civil Code)

Article 24 In the case referred to in the main clause of Article 22, paragraph (1), the provisions of Article 255 of the Civil Code (including the cases where applied mutatis mutandis pursuant to Article 264 of said Act) shall not apply to the right to use the grounds.

Section 4 Managers

(Appointment and Dismissal)

Article 25 (1) Unit owners may, except as otherwise provided for in the bylaws, appoint or dismiss a manager by resolution at a meeting.

(2) When the manager has committed a wrongful act or where there are other circumstances whereby it is not fitting for to him/her to carry out those duties, each of the unit owners may file for the dismissal of such manager.

(Authority)

Article 26 (1) The manager has the right and bears the obligation to preserve the common elements and the grounds and ancillary facilities of the relevant building in the case prescribed in Article 21 (referred to as the "common element, etc." in the following paragraph and Article 47, paragraph (6)), to put meeting resolutions into practice, and to engage in the acts specified in the bylaws.

(2) The manager shall, in connection with his/her duties, represent the unit owners. The same shall apply to claims for and the receipt of insurance monies based on a casualty insurance contract pursuant to the provisions of Article 18, paragraph (4) (including the cases where applied mutatis mutandis pursuant to Article 21) as well as compensation for damages arising with regard to a common element, etc. and any refund due to unjust enrichment.

(3) No limitation on a manager's authority may be duly asserted against a third party who is without knowledge of that limitation.

(4) The manager may, pursuant to the provisions of the bylaws or meeting resolutions, serve as a plaintiff or defendant for the unit owner(s), in connection with his/her duties (including the matters prescribed in the second sentence of paragraph (2)).

(5) When the manager has served as a plaintiff or defendant pursuant to the bylaws, as referred to in the preceding paragraph, he/she shall notify the unit owner(s) to that effect without delay. In this case, the provisions of Article 35, paragraphs (2) through (4) shall apply mutatis mutandis.

(Administrative Ownership)

Article 27 (1) Where it is specifically provided for in the bylaws, the manager may own the common elements.

(2) The provisions of Article 6, paragraph (2) and Article 20 shall apply mutatis mutandis to the case referred to in the preceding paragraph.

(Application Mutatis Mutandis of Provisions on Mandate)

Article 28 In addition to what is provided for in this Act and in the bylaws, the rights and obligations of a manager shall be in accordance with the provisions on mandates.

(Liability, etc. of the Unit Owners)

Article 29 (1) The proportion of liability that a unit owner must assume with regard to the acts the manager engages in within the scope of his/her duties in connection with a third party shall be the same proportion as that specified in Article 14; however, when the bylaws have specified a proportion of burden for the expenses necessary to the management of the building, its grounds, and its ancillary facilities, the proportion of liability shall be based on that proportion.

(2) Any claim held by a third party against a unit owner due to an act under the preceding paragraph, may be brought against the specific successor thereof.

Section 5 Bylaws and Meetings

(Matters Provided for in Bylaws)

Article 30 (1) Matters among the unit owners concerning the management or use of a building or its grounds or ancillary facilities may be provided for in the bylaws, in addition to what is provided for in this Act.

(2) Any matters concerning a partial common element that do not affect the interests of all of the unit owners may be provided for in the bylaws of the unit owners who should have common use of that element, except where these are provided for in the bylaws of all of the unit owners.

(3) The bylaws prescribed in the preceding two paragraphs, in comprehensive consideration of the shapes, areas, locative relationships, purpose of use, and status of use, as well as the price paid by each unit owner and any other circumstances with regard to the exclusive elements, common elements, grounds, and ancillary facilities of the building (including rights related to the grounds or ancillary facilities of the building), shall be set forth in such a manner as to ensure equity in the interests among unit owners.

(4) In the cases referred to in paragraphs (1) and (2), the bylaws shall not prejudice the rights of any persons other than unit owners.

(5) The bylaws shall be prepared in writing or by means of electromagnetic records (meaning records made in an electronic format, a magnetic format, or any other format not recognizable to human perception that is specified by Ordinance of the Ministry of Justice as being used in information processing by computers; the same applies hereinafter).

(Establishment, Amendment, and Repeal of Bylaws)

Article 31 (1) The establishment, amendment, or repeal of the bylaws shall be effected by resolution at a meeting, by at least a three-fourths majority of the unit owners and a three-fourths majority of the votes. In this case, when the establishment, amendment, or repeal of the bylaws will have a special influence on the rights of some unit owners, the approval of such unit owners shall be obtained.

(2) The establishment, amendment, or repeal of the bylaws of all of the unit owners for the matters prescribed in paragraph (2) of the preceding Article, may not be effected when more than one-fourth of the unit owners who co-own the relevant partial common element or persons who hold more than one-fourth of the voting rights connected with such partial common element oppose such establishment, amendment, or repeal.

(Establishment of Bylaws by Notarial Deed)

Article 32 A person who initially owns all the exclusive elements of a building may establish the bylaws provided for in Article 4, paragraph (2), Article 5, paragraph (1), the proviso to paragraph (1) of Article 22, and the proviso to paragraph (2) of said Article (including the cases where these provisions are applied mutatis mutandis pursuant to paragraph (3) of said Article) by notarial deed.

(Retention and Inspection of the Bylaws)

Article 33 (1) The bylaws shall be retained by the manager; however, when there is no manager, the bylaws shall be retained by a unit owner who is using the building or the agent thereof who has been specified in the bylaws or by resolution at a meeting.

(2) When the person who has retained the bylaws pursuant to the provisions of the preceding paragraph receives any request from an interested party, he/she shall not refuse to provide the bylaws for inspection (when the bylaws have been prepared in the form of electromagnetic records, inspection of the contents of the information recorded in said electromagnetic records, presented in a way that is specified by the Ordinance of the Ministry of Justice at the place where the bylaws are retained), except where there are justifiable grounds for doing so.

(3) The place where the bylaws are retained shall be posted in a conspicuous place within the building.

(Convocation of Meetings)

Article 34 (1) Meetings shall be called by the manager.

(2) The manager shall call a meeting at least once a year.

(3) One-fifth or more of the unit owners who hold at least one-fifth of all of the voting rights may indicate a matter that will be the subject of a meeting and request that the manager call a meeting; however, this fixed number may be reduced by the bylaws.

(4) Where a request under the preceding paragraph has been made, when, within two weeks, the manager does not send any convocation notice for a meeting setting a day within four weeks from the day of such request as the date of the meeting, the unit owners who made such request may call a meeting.

(5) When there is no manager, one-fifth or more of the unit owners who hold at least one-fifth of all of the voting rights may call a meeting; however, this fixed number may be reduced by the bylaws.

(Convocation Notice)

Article 35 (1) The convocation notice for a meeting shall indicate the subject matter of the meeting and shall be sent to each unit owner at least one week prior to the date of the meeting; however this period may be extended or reduced by the bylaws.

(2) Where an exclusive element is under the co-ownership of multiple persons, it is sufficient for the notice under the preceding paragraph to be sent to the person who exercises the voting rights as specified by the provisions of Article 40 (when there is no such person, one of the co-owners).

(3) It is sufficient for the notice under paragraph (1) to be sent to the place where the unit owner has notified the manager that he/she will receive notices, and when the unit owner has not notified the manager of such a place, to the place where the exclusive element owned by the unit owner is located. In this case, the notice under said paragraph shall be deemed to have arrived at the time when such notice should have normally arrived.

(4) When specifically provided in the bylaws, the notice under paragraph (1) may be given to a unit owner who has an address within the relevant building, or to a unit owner who has not notified the manager of the place under the preceding paragraph where he/she will receive notices, by posting such notice in a conspicuous place within the building. In this case, the notice under paragraph (1) shall be deemed to have arrived at the time when such notice is posted.

(5) Where the notice under paragraph (1) is given, when the matter that will be the subject of the meeting is a matter for resolution pursuant to Article 17, paragraph (1), Article 31, paragraph (1), Article 61, paragraph (5), Article 62, paragraph (1), Article 68, paragraph (1) or Article 69, paragraph (7), unit owners shall also be notified of a summary of the proposal.

(Omission of Convocation Procedures)

Article 36 When all of the unit owners have given their consent, a meeting may be held without going through convocation procedures.

(Limitation on the Matters for Resolution)

Article 37 (1) Resolutions may be brought before a meeting only with regard to matters for which notice has been given in advance pursuant to the provisions of Article 35.

(2) The provisions of the preceding paragraph shall not preclude any provisions to the contrary in the bylaws, except for matters for which a special fixed number has been specified with regard to meeting resolutions in this Act.

(3) The provisions of the preceding two paragraphs shall not apply to a meeting under the preceding Article.

(Voting Rights)

Article 38 The voting rights of each unit owner shall be in accordance with the proportion specified in Article 14, except as otherwise provided for in the bylaws.

(Decisions)

Article 39 (1) A meeting's decisions shall be decided by a majority of the unit owners and with a majority of the votes, except as otherwise provided for in this Act or in the bylaws.

(2) Voting rights may be exercised in writing or by proxy.

(3) A unit owner may exercise his/her voting rights by electromagnetic means (meaning a method that uses an electronic data processing system or any other method that uses information and communications technology that is specified by Ordinance of the Ministry of Justice; the same applies hereinafter) in lieu of exercising his/her voting rights in writing as provided in the preceding paragraph, pursuant to the bylaws or a meeting resolution.

(Designation of a Person to Exercise Voting Rights)

Article 40 Where an exclusive element is under the co-ownership of multiple persons, the co-owners shall specify one person who will exercise their voting rights.

(Chairperson)

Article 41 The manager or one of the unit owners who called the meeting shall serve as the chairperson at the meeting, except where otherwise provided in the bylaws or where it has been otherwise resolved.

(Minutes)

Article 42 (1) With regard to decisions at a meeting, the chairperson shall prepare the minutes in writing or in the form of electromagnetic records.

(2) A summary of the decision making process and the results thereof shall be entered or recorded in the minutes.

(3) In the case referred to in the preceding paragraph, when the minutes have been prepared in writing, the chairperson and two unit owners who attended the meeting shall sign such minutes and affix their seals thereto.

(4) In the case referred to in paragraph (2), when the minutes have been prepared in the form of electromagnetic records, with regard to the information recorded in said electromagnetic records, measures specified by Ordinance of the Ministry of Justice shall be taken in lieu of the chairperson and two unit owners who attended the meeting signing the minutes and affixing their seals thereto.

(5) The provisions of Article 33 shall apply mutatis mutandis to the minutes.

(Administrative Report)

Article 43 A manager shall report on his/her administrative duties at a meeting, at a certain time once a year.

(Possessors' Right to State Their Opinions)

Article 44 (1) Where a person who possesses an exclusive element with the consent of the unit owner holds an interest in the subject matter of the meeting, such person may attend the meeting and state his/her opinion.

(2) In the case prescribed in the preceding paragraph, the person who called the meeting shall, without delay after he/she has sent the convocation notice pursuant to the provisions of Article 35, post the date and place of the meeting and the subject matter of the meeting in a conspicuous place within the building.

(Resolutions Adopted in Writing or by Electromagnetic Means)

Article 45 (1) Where a resolution is to be brought before a meeting pursuant to the provisions of this Act or the bylaws, when it is with the consent of all of the unit owners, the resolution may be adopted either in writing or by electromagnetic means; provided, however, that the consent of the unit owners concerning a resolution adopted by electromagnetic means shall be as provided by Ordinance of the Ministry of Justice.

(2) With regard to a matter that was to have been resolved by bringing it before a meeting pursuant to the provisions of this Act or the bylaws, when there is unanimous agreement by all of the unit owners in writing or by electromagnetic means, a resolution shall be deemed to have been adopted in writing or by electromagnetic means.

(3) A resolution that has been adopted in writing or by electromagnetic means with regard to a matter that was to have been resolved by bringing it before a meeting pursuant to the provisions of this Act or the bylaws, shall have the same effect as a meeting resolution.

(4) The provisions of Article 33 shall apply mutatis mutandis to documents related to a resolution adopted in writing or by electromagnetic means, and to the electromagnetic records that are prepared by electromagnetic means where the electromagnetic means referred to in paragraph (1) or paragraph (2) are used.

(5) The provisions concerning meetings shall apply mutatis mutandis to resolutions adopted in writing or by electromagnetic means.

(Effects of Bylaws and Meeting Resolutions)

Article 46 (1) Bylaws and meeting resolutions shall also be effective against the specific successor of a unit owner.

(2) A possessor shall, with regard to the way in which he/she uses the building or its grounds or ancillary facilities, bear the same obligations as those borne by the unit owners based on the bylaws or meeting resolutions.

Section 6 Incorporated Management Associations

(Establishment, etc.)

Article 47 (1) The association referred to in Article 3 shall become a juridical person by specifying to the effect that it is becoming a juridical person due to a meeting resolution adopted by at least a tree-fourths majority of the unit owners and a three-fourths majority of the votes, by specifying its name and office, and by registering in the locality of its principal office.

(2) The juridical person under the preceding paragraph shall be called an "incorporated management association."

(3) In addition to what is provided for in this Act, the matters necessary for the registration of an incorporated management association shall be specified by Cabinet Order.

(4) The matters that must be registered in regard to an incorporated management association may not be duly asserted against a third party until after such matters have been registered.

(5) The meeting resolutions, the bylaws, and the acts engaged in within the scope of the duties of a manager before the establishment of an incorporated management association, shall be effective against the incorporated management association.

(6) An incorporated management association shall, in connection with its business, represent the unit owners. The same shall apply to claims for and the receipt of insurance monies based on a casualty insurance contract pursuant to the provisions of Article 18, paragraph (4) (including the cases where applied mutatis mutandis pursuant to Article 21) as well as compensation for damages arising with regard to a common element, etc. and refunds due to unjust enrichment.

(7) No limitation on the authority of an incorporated management association may be duly asserted against a third party who is without knowledge of that limitation.

(8) An incorporated management association may, pursuant to the bylaws or a meeting resolution, serve as a plaintiff or defendant for a unit owner, in connection with its business (including the matters prescribed in the second sentence of paragraph (6)).

(9) When the incorporated management association has served as a plaintiff or defendant pursuant to the bylaws referred to in the preceding paragraph, it shall notify the unit owner(s) to that effect without delay. In this case, the provisions of Article 35, paragraphs (2) through (4) shall apply mutatis mutandis.

(10) The provisions of Articles 4 and 78 of the Act on General Incorporated Associations and General Incorporated Foundations (Act No. 48 of 2006) shall apply mutatis mutandis to an incorporated management association, and the provisions of Article 16, paragraph (2) of the Bankruptcy Act (Act No. 75 of 2004) shall apply mutatis mutandis to an existing incorporated management association.

(11) The provisions of Section 4 and the proviso to Article 33, paragraph (1) (including the cases where applied mutatis mutandis pursuant to Article 42, paragraph (5) and Article 45, paragraph (4)) shall not apply to an incorporated management association.

(12) With regard to an incorporated management association, where the provisions of the main clause of Article 33, paragraph (1) (including the cases where applied mutatis mutandis pursuant to Article 42, paragraph (5) and Article 45, paragraph (4); hereinafter the same shall apply in this paragraph) apply, the phrase "by the manager" in the main clause of Article 33, paragraph (1) shall be deemed to be replaced with "by the director at the office of the incorporated management association," and in cases where the provisions of Article 34, paragraphs (1) through (3) and paragraph (5), Article 35, paragraph (3), Article 41, and Article 43 apply, the term "manager" in these provisions shall be deemed to be replaced with "director."

(13) With regard to the application of the provisions of the Corporation Tax Act (Act No. 34 of 1965) and other laws and regulations related to corporation tax, an incorporated management association shall be deemed to be a corporation in the public interest, etc. as prescribed in Article 2, item (vi) of said Act. In this case, where the provisions of Article 37 of said Act apply, the term "corporation in the public interest, etc. (excluding" in Article 37, paragraph (4) of said Act shall be deemed to be replaced with "corporation in the public interest, etc. (excluding an incorporated management association," and where the provisions of Article 66 of said Article apply, the term "ordinary corporation" in paragraphs (1) and (2) of Article 66 of said Act shall be deemed to be replaced with "ordinary corporation (including an incorporated management association)," and the term "corporation in the public interest, etc. (excluding" in Article 66, paragraph (3) of said Act shall be deemed to be replaced with "corporation in the public interest (excluding an incorporated management association."

(14) With regard to the application of the provisions of the Consumption Tax Act (Act No. 108 of 1988), an incorporated management association shall be deemed to be a juridical person as set forth in appended table No. 3 of said Act.

(Name)

Article 48 (1) An incorporated management association shall use the characters "kanrikumiaihoujin" (incorporated management association) in its name.

(2) No person other than an incorporated management association shall use in its name the characters "kanrikumiaihoujin" (incorporated management association).

(Inventory of Assets and Registry of Unit Owners)

Article 48-2 (1) An incorporated management association shall prepare its inventory of assets at the time of its establishment, and at any time between January and March every year, and must keep it at its principal office at all times; provided, however, that when an incorporated management association establishes a specific business year, it shall prepare an inventory of assets at the time of its establishment and at the end of its business year.

(2) An incorporated management association shall keep a registry of the unit owners and make the necessary changes whenever there is any change in the unit owners.

(Directors)

Article 49 (1) An incorporated management association shall have a director.

(2) Where there are multiple directors, the business of an incorporated management association shall be decided by the majority of the directors, unless otherwise provided for in the bylaws.

(3) The director shall represent the incorporated management association.

(4) When there are multiple directors, each director shall represent the incorporated management association.

(5) The provisions of the preceding paragraph shall not preclude an incorporated management association from designating a director to represent the incorporated management association or providing to the effect that multiple directors are to jointly represent the incorporated management association in its bylaws or by resolution at a meeting, or from specifying that the director who will represent the incorporated management association is to be chosen by the election of a director from among the directors themselves under the provisions of the bylaws.

(6) The director's term of office shall be two years; however, when the bylaws specify a different period of not longer than three years, such period shall be the director's term of office.

(7) Where there is any vacancy in the office of a director, or a shortfall in the number of directors as specified in the bylaws, a director(s) who has retired due to the expiration of his/her term of office or resignation shall perform his/her duties until a newly appointed director (including a provisional director as prescribed in Article 49-4, paragraph (1)) assumes office.

(8) The provisions of Article 25 shall apply mutatis mutandis to a director.

(Directors' Authority of Representation)

Article 49-2 No limitation on a director's authority may be duly asserted against a third party who is without knowledge of that limitation.

(Delegation of Directors' Authority)

Article 49-3 A director may delegate his/her authority for a specific act to other person(s), only when such delegation is not prohibited by the bylaws or a meeting resolution.

(Provisional Directors)

Article 49-4 (1) Where there is any vacancy in the office of a director, when any damage is likely to occur due to a delay in the business, the court shall appoint a provisional director, at the request of any interested person or the public prosecutor.

(2) Cases concerning the appointment of a provisional director shall be subject to the jurisdiction of the district court with jurisdiction over the locality of the incorporated management association's principal office.

(Auditors)

Article 50 (1) An incorporated management association shall have an auditor.

(2) No auditor shall hold concurrently the position of director or employee of an incorporated management association.

(3) The duties of an auditor shall be as follows:

(i) auditing the status of the assets of the incorporated management association;

(ii) auditing the status of business management by the director(s);

(iii) giving a report at a meeting when the auditor finds any violation of the applicable laws and regulations or the bylaws, or any significant impropriety with respect to the status of the assets or the management of the business; and

(iv) calling a meeting when it is necessary for the auditor to give a report as prescribed in the preceding item.

(4) The provisions of Article 25, Article 49, paragraphs (6) and (7) and the preceding Article shall apply mutatis mutandis to an auditor(s).

(Auditor's Authority of Representation)

Article 51 With regard to any matter involving a conflict of interest between an incorporated management association and a director(s), the auditor shall represent the incorporated management association.

(Management of Business)

Article 52 (1) In addition to what is provided for in this Act, all the business of an incorporated management association shall be implemented based on meeting resolutions; however, except for matters for which a special fixed number is specified in this Act with regard to meeting resolutions and the matters provided in Article 57, paragraph (2), business may be decided by the director(s) and other officer(s) by the bylaws.

(2) Notwithstanding the provisions of the preceding paragraph, the director may decide on the act of preservation.

(Liability of Unit Owners)

Article 53 (1) When an incorporated management association is unable to fully perform its obligations out of its assets, the unit owners shall be liable for the performance of such obligations in the same proportion as that specified in Article 14; however, when a proportion of burden as provided in the proviso to Article 29, paragraph (1) has been specified, the unit owners' liability shall be in accordance with that proportion.

(2) The preceding paragraph shall also apply when a compulsory execution against the assets of the incorporated management association has not been successful.

(3) The provisions of the preceding paragraph shall not apply when the unit owner(s) has proved that the incorporated management association has sufficient financial resources and that a compulsory execution can be easily performed.

(Liability of Specific Successors)

Article 54 The specific successor of a unit owner shall bear the same liability as that borne by the unit owner pursuant to the preceding Article, even with regard to obligations of the incorporated management association that arose before his/her succession.

(Dissolution)

Article 55 (1) An incorporated management association shall be dissolved due to the following causes:

(i) the total destruction of the building (for an incorporated management association consisting of unit owners who co-own a partial common element, such common element);

(ii) the fact that there have ceased to be exclusive elements in the building; and

(iii) a resolution at a meeting.

(2) The resolution referred to in item (iii) of the preceding paragraph shall be adopted by at least a three-fourths majority of the unit owners and a three-fourths majority of the votes.

(Capacity of an Incorporated Management Association under Liquidation)

Article 55-2 A dissolved incorporated management association shall be deemed to continue to exist to the extent of the purpose of liquidation, until the completion of such liquidation.

(Liquidators)

Article 55-3 When an incorporated management association has been dissolved, except for where the dissolution has been effected pursuant to a decision for the commencement of bankruptcy proceedings, the director shall be the liquidator; however, this shall not apply where otherwise provided in the bylaws or where a person other than a director has been appointed at a meeting.

(Appointment of a Liquidator by the Court)

Article 55-4 When there is no person to become liquidator pursuant to the provisions of the preceding Article and when any damage is likely to occur due to a vacancy in the office of liquidator, the court may appoint a liquidator at the request of any interested person or the public prosecutor, or by its own authority.

(Dismissal of a Liquidator)

Article 55-5 When there is any material reason for doing so, the court may dismiss a liquidator at the request of any interested person or the public prosecutor, or by its own authority.

(Duties and Authority of a Liquidator)

Article 55-6 (1) The duties of a liquidator shall be as follows:

(i) completion of current business;

(ii) collection of claims and performance of obligations; and

(iii) delivery of residual assets.

(2) A liquidator may engage in any acts necessary for the performance of the duties listed in the items of the preceding paragraph.

(Request for the Filing of Claims)

Article 55-7 (1) Within two months from the day on which a liquidator takes office, he/she shall request that any obligees file their claims within a stated period of time, by releasing a public notice on at least three occasions. In this case, such a period of time shall not be shorter than two months.

(2) The public notice set forth in the preceding paragraph shall carry a supplementary note to the effect that if any obligee does not file a claim within the stated period he/she will be excluded from the liquidation; however, the liquidator may not exclude any known obligee.

(3) A liquidator shall separately request each of the known obligees to file his/her claim.

(4) The public notice pursuant to the provisions of paragraph (1) shall be given by publication in the official gazette.

(Filing of Claims After the Passage of the Stated Period)

Article 55-8 Any obligee who files after the passage of the period provided for in paragraph (1) of the preceding Article, may only make a claim against the assets that, after all obligations of the incorporated management association have been fully performed, have not been delivered to persons with vested rights.

(Commencement of Bankruptcy Proceedings with Respect to an Incorporated Management Association under Liquidation)

Article 55-9 (1) When it has become apparent during liquidation that the assets of an incorporated management association are insufficient for the full performance of its obligations, the liquidator shall immediately file a petition for the commencement of bankruptcy proceedings and give public notice to that effect.

(2) Where an incorporated management association under liquidation has been issued a ruling for the commencement of bankruptcy proceedings, when its administration has been transferred to a bankruptcy trustee, the liquidator shall have completed his/her duties.

(3) In the case prescribed in the preceding paragraph, when the incorporated management association under liquidation has already paid any monies to its obligees, or has delivered any assets to persons with vested rights, the bankruptcy trustee may retrieve such monies or assets.

(4) The public notice pursuant to the provisions of paragraph (1) above shall be given by publication in the official gazette.

(Vesting of Residual Assets)

Article 56 The assets of a dissolved incorporated management association shall, except where otherwise provided in the bylaws, vest in each unit owner in the same proportion as that specified in Article 14.

(Supervision by the Court)

Article 56-2 (1) The dissolution and liquidation of an incorporated management association shall be subject to the supervision of the court.

(2) The court may, on its own authority, conduct any inspection that is necessary for the supervision set forth in the preceding paragraph at any time.

(Jurisdiction over Cases Concerning Supervision, etc. of Dissolution and Liquidation)

Article 56-3 Cases concerning the supervision of the dissolution and liquidation of an incorporated management association and cases concerning the liquidator shall be subject to the jurisdiction of the district court with jurisdiction over the locality of the incorporated management association's principal office.

(Restriction on Appeals)

Article 56-4 No appeal may be entered against a judicial decision on the appointment of a liquidator.

(Remuneration for a Liquidator Appointed by the Court)

Article 56-5 Where the court has appointed a liquidator pursuant to the provisions of Article 55-4, it may fix the amount of remuneration that the incorporated management association is to pay to such liquidator. In this case, the court shall hear statements from such liquidator and from the auditor.

(Immediate Appeal Against a Ruling)

Article 56-6 An immediate appeal against a ruling may be entered against a judicial decision on the dismissal of the liquidator and against a judicial decision under the preceding Article.

(Appointment of Inspectors)

Article 56-7 (1) The court may appoint an inspector for the purpose of having him/her carry out any investigation that is necessary for the supervision of the dissolution and liquidation of an incorporated management association.

(2) The provisions of the preceding three Articles shall apply mutatis mutandis to cases where the court has appointed an inspector pursuant to the provisions of the preceding paragraph. In this case, the phrase "liquidator and from the auditor" in Article 56-5 shall be deemed to be replaced with "incorporated management association and from the inspector."

Section 7 Measures Against Persons Who Violate Obligations

(Demand for the Discontinuance, etc. of Conduct Contrary to the Common Benefit)

Article 57 (1) Where a unit owner has engaged in conduct set forth in Article 6, paragraph (1) or where a unit owner is likely to engage in such conduct, all of the other unit owners or the incorporated management association may, for the common benefit of the unit owners, demand that the relevant unit owner discontinue such conduct, remove the outcome of such conduct, or take the necessary measures to prevent such conduct.

(2) Any action filed under the provisions of the preceding paragraph shall be in accordance with a meeting resolution.

(3) A manager or a unit owner who has been designated at a meeting may, based on a meeting resolution, file an action as set forth in the preceding paragraph on behalf of all of the other unit owners referred to in paragraph (1).

(4) The provisions of the preceding three paragraphs shall apply mutatis mutandis to where the possessor has engaged in the conduct set forth in Article 6, paragraph (1) as applied mutatis mutandis pursuant to paragraph (3) of said Article and where the possessor is likely to engage in such conduct.

(Demand for a Prohibition on Use)

Article 58 (1) In the case prescribed in paragraph (1) of the preceding Article, when conduct as set forth in Article 6, paragraph (1) significantly impedes the unit owners' community life and when there is difficulty in removing such impediment and securing the use of a common element or preserving the other unit owners' community life solely by making a demand under paragraph (1) of the preceding Article, all of the other unit owners or the incorporated management association may, based on a meeting resolution, file an action demanding that the unit owner involved in the relevant conduct be prohibited from using an exclusive element for a reasonable period of time.

(2) Any resolution as referred to in the preceding paragraph shall be adopted by at least a three-fourths majority of the unit owners and a three-fourths majority of the votes.

(3) In order for a resolution under paragraph (1) to be decided, the relevant unit owner shall be given the opportunity to give an explanation in advance.

(4) The provisions of paragraph (3) of the preceding Article shall apply mutatis mutandis to the filing of an action as referred to in paragraph (1).

(Demand for the Auction of Unit Ownership)

Article 59 (1) In the case prescribed in Article 57, paragraph (1), when conduct as set forth in Article 6, paragraph (1) significantly impedes the unit owners' community life and when there is difficulty in removing such impediment and securing the use of a common element or preserving the other unit owners' community life by any other means, all of the other unit owners or the incorporated management association may, based on a meeting resolution, file an action demanding that the unit ownership and the right to use the grounds held by the unit owner who is involved in such conduct be auctioned.

(2) The provisions of Article 57, paragraph (3) shall apply mutatis mutandis to the filing of an action as set forth in the preceding paragraph, and the provisions of paragraphs (2) and (3) of the preceding Article shall apply mutatis mutandis to the resolution set forth in the preceding paragraph.

(3) A petition for an auction based on a judgment pursuant to the provisions of paragraph (1) may not be filed after six months have elapsed from the day on which such judgment has become final and binding.

(4) In the auction set forth in the preceding paragraph, neither the unit owner who is subject to the petition for the auction nor any person seeking to purchase the unit ownership or the right to use the grounds on said unit owner's account may make a purchase offer.

(Demand to Transfer Against the Possessor)

Article 60 (1) In the case prescribed in Article 57, paragraph (4), when conduct as set forth in Article 6, paragraph (1) as applied mutatis mutandis pursuant to Article 6, paragraph (3) significantly impedes the unit owners' community life and when there is difficulty in removing such impediment and securing the use of a common element or preserving the other unit owners' community life by any other means, all of the unit owners or the incorporated management association may, based on a meeting resolution, file an action demanding the cancellation of the contract concluded for the purpose of using or profiting from an exclusive element in the possession of a possessor involved in such conduct and the transfer of that exclusive element.

(2) The provisions of Article 57, paragraph (3) shall apply mutatis mutandis to the filing of an action as set forth in the preceding paragraph, and the provisions of Article 58, paragraphs (2) and (3) shall apply mutatis mutandis to the resolution set forth in the preceding paragraph.

(3) A person to whom an exclusive element has been transferred based on a judgment pursuant to the provisions of paragraph (1) shall further transfer such element to the person who holds the title to possess the relevant exclusive element.

Section 8 Restoration and Reconstruction

(Restoration, etc. in Cases Where Part of the Building Has Been Destroyed)

Article 61 (1) When a part of a building equivalent to up to half of the cost of the building has been destroyed, each unit owner may restore the destroyed common elements and his/her own destroyed exclusive element that have been destroyed; however, this shall not apply where a resolution as set forth in paragraph (3), paragraph (1) of the following Article, or Article 70, paragraph (1) has been adopted before the commencement of restoration work.

(2) A unit owner who has restored a common element pursuant to the provisions of the preceding paragraph may request the other unit owners to reimburse him/her for the amount required for the restoration in accordance with the proportion specified in Article 14.

(3) In the case prescribed in the main clause of paragraph (1), a resolution to restore the destroyed common elements may be brought before a meeting.

(4) The provisions of the preceding three paragraphs shall not preclude any provisions to the contrary in the bylaws.

(5) Except in cases prescribed in the main clause of paragraph (1), when part of a building has been destroyed, a resolution to restore the destroyed common elements may be adopted at a meeting by at least a three-fourths majority of the unit owners and a three-fourths majority of the votes.

(6) The minutes of a meeting before which a resolution under the preceding paragraph has been brought, shall state or record each unit owner's vote in favor of or against the resolution.

(7) Where a resolution under paragraph (5) has been adopted, when two weeks have elapsed from the day of the resolution, except for cases specified in the following paragraph, unit owners other than those who were in favor of that resolution (including the successors of the unit owners in favor; hereinafter referred to as "supporters of the resolution" in this Article) may demand that some or all of the supporters of the resolution purchase the building and the rights to the grounds thereof at their current value. In this case, the supporters of the resolution who have been so demanded may, within two months from the day of such demand, demand that all or some of the other supporters of the resolution purchase the building and the rights to the grounds thereof at their current value in accordance with the proportion specified in Article 14, calculated by excluding the unit owners who were not supporters of the resolution.

(8) When a person who is capable of purchasing the building and the rights to the grounds thereof has been designated by the supporters of the resolution by unanimous consent, and said designated person (hereinafter referred to as the "designated purchaser" in this Article) has notified the unit owners who were not supporters of the resolution to that effect in writing within two weeks from the day of the resolution under paragraph (5), unit owners who have been so notified may make the demand prescribed in the first sentence of the preceding paragraph only of the designated purchaser.

(9) When a designated purchaser does not perform all or part of the obligations connected with the purchase money in a transaction that is based on a demand prescribed in the first sentence of paragraph (7), the supporters of the resolution (excluding those who have become designated purchasers; hereinafter the same shall apply in this paragraph and paragraph (13)) shall jointly and severally be liable to perform those obligations in whole or in part; however, this shall not apply where the supporters of the resolution have proved that the designated purchaser has sufficient financial resources, and that performance can be easily enforced.

(10) The person who has called a meeting under paragraph (5) (when the designated purchaser has already been designated, said designated purchaser) may specify a period of four months or more and request that unit owners who were not supporters of the resolution give a definite answer within that period as to whether they will make the demand prescribed in paragraph (7) within that period.

(11) A unit owner who has been requested as under the preceding paragraph may not make the demand prescribed in the first sentence of paragraph (7) after the period specified pursuant to the provisions of the preceding paragraph has elapsed.

(12) In the case prescribed in paragraph (5), when a resolution under said paragraph, paragraph (1) of the following Article, or Article 70, paragraph (1) has not been adopted within six months after the day of the partial destruction of the building, each unit owner may demand that the other unit owners purchase the building and the rights to the grounds thereof at their current value.

(13) In the cases referred to in paragraph (2), paragraph (7), paragraph (8) and the preceding paragraph, the court may grant a reasonable period for the payment of the reimbursement or purchase money at the request of a unit owner who has been demanded to make the reimbursement or purchase, a designated purchaser who has been demanded to make the purchase, or a supporter of the resolution who has been demanded to perform an obligation pursuant to the main clause of paragraph (9).

(Resolution to Reconstruct)

Article 62 (1) A resolution to the effect that the building will be demolished, and a new building will be constructed on the grounds of the building to be demolished or on part of its land, or on the land that includes the whole or part of the grounds of the building to be demolished (hereinafter such resolution shall be referred to as the "resolution to reconstruct") may be adopted at a meeting by at least a four-fifths majority of the unit owners and at least a four-fifths majority of the votes.

(2) A resolution to reconstruct shall specify the following matters:

(i) an outline of the design of the building that is to be newly constructed (hereinafter referred to as the "reconstructed building" in this paragraph);

(ii) the estimated amount of expenses necessary for the demolition of the building and the construction of the reconstructed building;

(iii) matters concerning the sharing of expenses referred to in the preceding item; and

(iv) matters concerning the attribution of the unit ownership of the reconstructed building.

(3) The matters provided for in items (iii) and (iv) of the preceding paragraph shall be specified in a way that does not undermine the equity of each unit owner.

(4) When a meeting is called at which the matters for resolution prescribed in paragraph (1) will be the subject matter, the notice under Article 35, paragraph (1) shall, notwithstanding the provisions of that paragraph, be sent at least two months prior to the date of said meeting; however such period may be extended by the bylaws.

(5) In the case prescribed in the preceding paragraph, when the notice under Article 35, paragraph (1) is given, notice shall also be given of the following matters, in addition to the summary of the proposal prescribed in paragraph (5) of said Article:

(i) the reasons that necessitate the reconstruction;

(ii) where it has been decided that the building will not be reconstructed, the amount of expenses necessary to maintain or recover the utility of the building (including assurance of the utility that a building normally should have), and a breakdown thereof;

(iii) when a plan for repairing the building has been established, the contents of the plan; and

(iv) the amount of reserve funds reserved for the repair of the building.

(6) A person who has called a meeting under paragraph (4) shall hold an explanatory meeting to explain to the unit owners the matters of which they were to be notified when the meeting was called, by at least one month prior to the date of the meeting.

(7) The provisions of Article 35, paragraphs (1) through (4) and Article 36 shall apply mutatis mutandis to the holding of an explanatory meeting as provided in the preceding paragraph. In this case, the phrase "extended or shortened" in the proviso to Article 35, paragraph (1) is deemed to be replaced with "extended."

(8) The provisions of paragraph (6) of the preceding Article shall apply mutatis mutandis to the minutes of a meeting before which a resolution to reconstruct has been brought.

(Demand, etc. for the Sale of Unit Ownership, etc.)

Article 63 (1) When a resolution to reconstruct has been adopted, the person who called the meeting shall, without delay, request, in writing, that the unit owners who were not in favor of the resolution to reconstruct (including the successors thereof) answer whether or not they will take part in the reconstruction in accordance with the contents of the resolution to reconstruct.

(2) The unit owners referred to in the preceding paragraph shall give their answers within two months from the day on which they were made the request under the preceding paragraph.

(3) A unit owner as referred to in paragraph (1) who has failed to give an answer within the period under the preceding paragraph shall be deemed to have given an answer to the effect that he/she will take part in the reconstruction.

(4) After the period under paragraph (2) has elapsed, each unit owner who was in favor of the resolution to reconstruct and each unit owner who has answered to the effect that he/she will take part in the reconstruction in accordance with the contents of the resolution to reconstruct (including the successors of such unit owners), or any person who has been designated as the person who may purchase the unit ownership or the rights to use the grounds with the unanimous consent of the above-mentioned unit owners (hereinafter referred to as the "designated purchaser") may demand that the unit owners who have answered to the effect that they will not take part in the reconstruction (including the successors thereof) sell and transfer thereto their unit ownership and the rights to use the grounds at their current value, within two months from the day that the period under paragraph (2) expires. The same shall apply to the rights to use the grounds that are held by a person who has acquired only the rights to use the grounds from a unit owner who has answered to the effect that he/she will not take part in the reconstruction after the adoption of the resolution to reconstruct (including the successor of such person).

(5) Where a demand has been made under the preceding paragraph, when a unit owner who has answered to the effect that he/she will not take part in the reconstruction is likely to suffer extreme difficulty in his/her daily life as a result of vacating the building, and when there are obvious grounds for finding that it would not have a significant influence on the implementation of the resolution to reconstruct, the court may, at the request of that person, grant him/her a reasonable period to vacate the building, within the scope of one year from the day of the payment or provision of the purchase money.

(6) Where demolition work on the building has not commenced within two years after the day of the resolution to reconstruct, a person who has sold his/her unit ownership or rights to use the grounds pursuant to the provisions of paragraph (4) may, within six months from the day of the expiration of such period, demand that the person who holds the unit ownership or the rights to use the grounds at the time in question sell and transfer such rights thereto, by offering the current holder monies equivalent to the purchase money paid to him/her by the purchaser; provided, however, that this shall not apply where there are justifiable grounds for the demolition work on the building not having commenced.

(7) The provisions of the main clause of the preceding paragraph shall, in the case prescribed in the proviso to the preceding paragraph, apply mutatis mutandis to cases where demolition work on the building has not commenced within six months from the day on which the reasons preventing the commencement of the demolition work have ceased to exist. In this case, the phrase "within six months from the day of the expiration of such period" in the main clause of the preceding paragraph shall be deemed to be replaced with "by the time six months have elapsed from the day on which the person who sold the unit ownership or the rights to use the grounds became aware that the reasons preventing the commencement of demolition work on the building have ceased to exist, or two years from the day on which such reasons ceased to exist, whichever comes earlier."

(Agreements on Reconstruction)

Article 64 Each unit owner who was in favor of the resolution to reconstruct, each unit owner who answered to the effect that he/she would take part in the reconstruction in accordance with the contents of the resolution to reconstruct, and each designated purchaser who purchased unit ownership or the rights to use the grounds (including the successors of those persons) shall be deemed to have agreed to implement the reconstruction in accordance with the contents of the resolution to reconstruct.

Chapter II Housing Complexes

(Association of Building Owners in a Housing Complex)

Article 65 Where two or more buildings are located in a single housing complex and where the land or ancillary facilities (including the rights related thereto) located in the housing complex are co-owned by the owners of such buildings (with regard to buildings with exclusive elements, the unit owners), all of the owners thereof together (hereinafter referred to as the "owners of buildings in a housing complex") may organize an association to manage the land, ancillary facilities, and buildings with exclusive elements that are located within the housing complex, and may, pursuant to the provisions of this Act, hold meetings, establish bylaws, and assign a manager.

(Mutatis Mutandis Application of Provisions Concerning Unit Ownership in a Building)

Article 66 The provisions of Article 7, Article 8, Articles 17 through 19, Article 25, Article 26, Article 28, Article 29, Article 30, paragraph (1) and paragraphs (3) through (5), Article 31, paragraph (1), and Articles 33 through Article 56-7 shall apply mutatis mutandis to the case referred to in the preceding Article. In this case, the terms "unit owner(s)" and "incorporated management association" in these provisions (excluding Article 55, paragraph (1), item (i)) shall be deemed to be replaced with "owners of the buildings in a housing complex as defined in Article 65" and "incorporated housing complex management association" respectively; the phrases "common elements, grounds of the building, or ancillary facilities of the building that are other than common elements" and "unit ownership" in Article 7, paragraph (1) shall be deemed to be replaced with "the relevant land or the ancillary facilities (hereinafter referred to as the 'land, etc.') in the case referred to in Article 65" and "rights to the land, etc., building, or unit ownership" respectively; the phrases "common element(s)" in Article 17, Article 18, paragraphs (1) and (4) and Article 19, "the common elements, and the grounds and ancillary facilities of the relevant building in the case prescribed in Article 21" in Article 26, paragraph (1), and "the building, its grounds and the ancillary facilities thereof" in Article 29, paragraph (1) shall be deemed to be replaced with "the land, etc., as well as the land, etc. and ancillary facilities set forth in Article 68, paragraph (1), item (i) and the common elements of the building set forth in Article 68, paragraph (1), item (ii) that are specified for management pursuant to the bylaws under the provisions of Article 68"; the term "exclusive element" in Article 17, paragraph (2), Article 35, paragraphs (2) and (3), Article 40 and Article 44, paragraph (1) shall be deemed to be replaced with "building or exclusive element"; the phrase "specified in Article 14" in Article 29, paragraph (1), Article 38, Article 53, paragraph (1) and Article 56 shall be deemed to be replaced with "of the share in the land, etc. (including the rights related thereto)"; the phrase "building or its grounds or ancillary facilities" in Article 30, paragraph (1) and Article 46, paragraph (2) shall be deemed to be replaced with "land, etc. or the land, etc. or ancillary facilities set forth in the items of Article 68, paragraph (1)"; the phrase "the exclusive elements or common elements or the grounds or ancillary facilities of the building (including the rights related to the grounds or ancillary facilities of the building)" in Article 30, paragraph (3) shall be deemed to be replaced with "the building or common elements, or land, etc. (including the rights relating thereto), or the land, etc. or ancillary facilities set forth in Article 68, paragraph (1), item (i) (including the rights related thereto) or the common elements of the building set forth in Article 68, paragraph (1), item (ii), that are specified for management pursuant to the bylaws under the provisions of Article 68"; the phrase "within the building" in Article 33, paragraph (3), Article 35, paragraph (4) and Article 44, paragraph (2) shall be deemed to be replaced with "within the housing complex"; the phrase "Article 61, paragraph (5), Article 62, paragraph (1), Article 68, paragraph (1) or Article 69, paragraph (7)" in Article 35, paragraph (5) shall be deemed to be replaced with "Article 69, paragraph (1), or Article 70, paragraph (1)"; the term "possessor" in Article 46, paragraph (2) shall be deemed to be replaced with "the person who possesses a building or an exclusive element but who is not the owner of a building in the housing complex as defined in Article 65"; the term "Article 3" in Article 47, paragraph (1) shall be deemed to be replaced with "Article 65"; the phrase "building (for an incorporated management association consisting of unit owners who jointly own a partial common element, such common element)" in Article 55, paragraph (1), item (i) shall be deemed to be replaced with "land, etc. (including the rights related thereto)"; and the phrase "there have ceased to be exclusive elements in the building" in Article 55, paragraph (1), item (ii) shall be deemed to be replaced with "the land, etc. (including the rights related thereto) has ceased to be jointly held by the owners of the buildings in the housing complex as defined in Article 65."

(Common Elements in a Housing Complex)

Article 67 (1) The buildings that comprise the ancillary facilities of a single housing complex (including the portions of a building provided for in Article 1 that comprise the ancillary facilities) may be treated as common elements in a housing complex pursuant to the bylaws under Article 30, paragraph (1) as applied mutatis mutandis pursuant to the preceding Article. In this case, such common elements may not be duly asserted as common elements against a third party unless they are registered as such.

(2) A person who wholly owns two or more buildings that are located in a single housing complex may establish bylaws under the preceding paragraph by a notarial deed.

(3) The provisions of the main clause of Article 11, paragraph (1), Article 11, paragraph (3) and Articles 13 through 15 shall apply mutatis mutandis to the common elements in a housing complex. In this case, the term "unit owner" in the main clause of Article 11, paragraph (1) shall be deemed to be replaced with "the owner of a building in the housing complex as defined in Article 65" and the term "exclusive element" in Article 14, paragraph (1) and Article 15 shall be deemed to be replaced with "building or exclusive element."

(Special Provisions on the Establishment of Bylaws)

Article 68 (1) In order to establish the bylaws provided for in Article 30, paragraph (1) as applied mutatis mutandis pursuant to Article 66 with regard to the following objects, for the land or ancillary facilities set forth in item (i), the consent of more than three-fourths of the co-owners who hold more than three-fourths of the share in all of the land or all of the ancillary facilities is required, and for the building set forth in item (ii), the adoption of a resolution by at least a three-fourths majority of the unit holders and a four-fifths majority of the votes, at a meeting under the provisions of Article 34 for the whole building is required:

(i) where land or ancillary facilities located in a single housing complex (including rights related thereto) are co-owned by the owners of some of the buildings located in said housing complex (with regard to buildings with exclusive elements, the unit owners), such land or ancillary facilities (excluding land and ancillary facilities co-owned only by the owners of buildings that are other than buildings with exclusive elements); and

(ii) a building with exclusive elements that is located in the relevant housing complex.

(2) The provisions of Article 31, paragraph (2) shall apply mutatis mutandis to a meeting resolution as set forth in the preceding paragraph for the matters concerning the partial common elements of the building set forth in item (ii) of the preceding paragraph that would not affect the interests of all of the unit owners.

(Resolutions to Approve the Reconstruction of Buildings Located in a Housing Complex)

Article 69 (1) Where all or some of the buildings in a single housing complex (hereinafter referred to as the "building(s) in the housing complex" in this and the following Article) are buildings with exclusive elements, and where the land on which a specific building in the housing complex (hereinafter referred to as the "specific building" in this Article) is located is co-owned by the owners of buildings in the housing complex as defined in Article 65 (hereinafter simply referred to as the "owners of the buildings in the housing complex" in this Article) who own the relevant buildings in the housing complex, where the requirements specified in the following items are satisfied in accordance with the categories set forth in each of those items and when a resolution for approval has been adopted by at least a three-fourths majority of the votes at the meeting of the association provided for in Article 65 that has been organized by the owners of the buildings in the housing complex who own the relevant buildings in a housing complex and who are the co-owners of the relevant land (including the rights related thereto) or the incorporated housing complex management association (such a resolution shall be hereinafter referred to as the "resolution to approve reconstruction"), said owners of buildings in the housing complex who own the relevant specific building may demolish the relevant specific building and construct a new building on the relevant land or on land within the housing complex that is managed or used as a single unit with such land (limited to land co-owned by the owners of buildings in the housing complex who own the relevant building in the housing complex):

(i) where the relevant specific building is a building with exclusive elements: a resolution to reconstruct has been adopted for such specific building or the consent of all of the unit owners of that specific building has been obtained; or

(ii) where the relevant specific building is a building other than a building with exclusive elements: the consent of the owner(s) of that specific building has been obtained.

(2) Notwithstanding the provisions of Article 38 as applied mutatis mutandis pursuant to Article 66, the voting rights of each owner of the buildings in a housing complex at the meeting provided for in the preceding paragraph shall be in proportion to the share in the land on which the relevant specific building (including the rights related thereto) is located, even if it is otherwise provided for in the bylaws under Article 30, paragraph (1) as applied mutatis mutandis pursuant to Article 66.

(3) An owner of a building in a housing complex who owns the relevant specific building for which the requirements specified in either the items of paragraph (1) are satisfied shall be deemed to have exercised voting rights in favor of the resolution to approve reconstruction; provided, however, that this shall not apply to the exercise of voting rights by the unit owners of the relevant specific building who hold such voting rights based on the right to use the grounds of a building other than the relevant specific building from among the buildings in the housing complex, in the case prescribed in item (i) of paragraph (1).

(4) Notwithstanding the provisions of Article 35, paragraph (1), when a meeting under paragraph (1) is called, the notice under Article 35, paragraph (1) as applied mutatis mutandis pursuant to Article 66 shall present an outline of the design of the building that is to be newly constructed (including the place in the housing complex where the relevant building is to be located) in addition to an outline of the proposal provided for in Article 35, paragraph (5), and sent by at least two months prior to the meeting date for said meeting; provided, however, that this period may be extended by the bylaws under Article 30, paragraph (1) as applied mutatis mutandis pursuant to Article 66.

(5) In the case referred to in paragraph (1), when the reconstruction under a resolution to approve reconstruction will have a special influence on the reconstruction of a building other than the relevant specific building (hereinafter referred to as "the relevant other building" in this paragraph), the specific building may only be reconstructed when the persons specified in the following items in accordance with the categories set forth in each of those items were in favor of the relevant resolution to approve reconstruction:

(i) where the relevant other building is a building with exclusive elements: unit owners at the meeting set forth in paragraph (1) who hold at least three-fourths of the voting rights of all of the unit owners of the relevant other building; or

(ii) where the relevant other building is a building other than a building with exclusive elements: the owner of the relevant other building.

(6) In the case referred to in paragraph (1), when there are two or more specific buildings, the owners of buildings in the housing complex who own said two or more specific buildings may bring a resolution to approve combined reconstruction with regard to the reconstruction of such two or more specific buildings, with the consent of each of the owners of the buildings in a housing complex for each specific building.

(7) In the case referred to in the preceding paragraph, when the relevant specific buildings are buildings with exclusive elements, a resolution to bring a resolution to approve combined reconstruction with regard to the reconstruction of said two or more specific buildings may be adopted by at least a four-fifths majority of the unit owners of the specific buildings and at least a four-fifths majority of the votes, at a meeting set forth in Article 62, paragraph (1) at which the reconstruction of the specific buildings is the subject matter. In such cases, when such a resolution has been adopted, the consent prescribed in the preceding paragraph shall be deemed to have been obtained from the owners of the buildings in the housing complex who own the specific buildings (limited to unit owners).

(Resolutions for Combined Reconstruction of Buildings Located in a Housing Complex)

Article 70 (1) Where all of the buildings in a housing complex are buildings with exclusive elements, and where the grounds of the relevant buildings in the housing complex (meaning the land on which the buildings in a housing complex are located and the land that is treated as the grounds of the buildings in a housing complex pursuant to the provisions of Article 5, paragraph (1), and including the rights related thereto; hereinafter the same shall apply in this and the following paragraph) are co-owned by the unit owners of the buildings in the housing complex, when the bylaws under Article 30, paragraph (1) as applied mutatis mutandis pursuant to Article 66 have been established for the relevant buildings in the housing complex pursuant to the provisions of Article 68, paragraph (1) (excluding item (i)), notwithstanding the provisions of Article 62, paragraph (1), a resolution regarding the relevant buildings in a housing complex may be adopted to collectively demolish all of the buildings in the housing complex and construct new buildings on the grounds of said buildings in the housing complex (excluding the rights related thereto; hereinafter the same shall apply in this paragraph), on part of the land thereof, or on the land that includes the whole or part of the grounds of the buildings in the housing complex (such land is referred to as the "grounds within the reconstructed housing complex" in paragraph (3), item (i)) (hereinafter such a resolution is referred to as the "resolution for combined reconstruction" in this Article), by at least a four-fifths majority of the unit owners of the relevant buildings in the housing complex and by at least a four-fifths majority of the votes, at a meeting of the association as set forth in Article 65 that consists of the unit owners of the buildings in the housing complex who are the co-owners of the grounds of said buildings in the housing complex, or at a meeting of an incorporated housing complex association; provided, however, that this shall be limited to cases where, with regard to each building in the housing complex, at least two-thirds of the unit owners thereof who hold at least two-thirds of the total votes as provided in Article 38 are in favor of the resolution for combined reconstruction at the relevant meetings.

(2) The provisions of paragraph (2) of the preceding Article shall apply mutatis mutandis pursuant to the voting rights of each unit owner prescribed in the main clause of the preceding paragraph. In this case, the phrase "the land where the relevant specific building (including the rights related thereto) is located" in paragraph (2) of the preceding Article shall be deemed to be replaced with "the grounds of the relevant buildings in the housing complex."

(3) The following matters shall be provided for by a resolution for combined reconstruction of the buildings in a housing complex:

(i) an outline of the plan for the integrated use of the grounds of the reconstructed housing complex;

(ii) an outline of the designs of the buildings that are to be newly constructed (hereinafter referred to as the "reconstructed buildings in the housing complex" in this paragraph);

(iii) the estimated amount of expenses necessary for the demolition of all of the buildings in the housing complex and for constructing the reconstructed buildings in the housing complex;

(iv) matters concerning the sharing of expenses provided for in the preceding item; and

(v) matters concerning the attribution of unit ownership in the reconstructed buildings in the housing complex.

(4) The provisions of Article 62, paragraphs (3) through (8) and Articles 63 and 64 shall apply mutatis mutandis to a resolution for combined reconstruction of the buildings in a housing complex. In this case, the phrase "items (iii) and (iv) of the preceding paragraph" in Article 62, paragraph (3) shall be deemed to be replaced with "Article 70, paragraph (3), items (iv) and (v)"; the phrases "prescribed in paragraph (1)," "Article 35, paragraph (1)" and "bylaws" in Article 62, paragraph (4) shall be deemed to be replaced with "prescribed in Article 70, paragraph (1)," "Article 35, paragraph (1) as applied mutatis mutandis pursuant to Article 66," and "the bylaws under Article 30, paragraph (1) as applied mutatis mutandis pursuant to Article 66," respectively; the phrase "Article 35, paragraph (1)" in Article 62, paragraph (5) shall be deemed to be replaced with "Article 35, paragraph (1) as applied mutatis mutandis pursuant to Article 66"; the phrases "Article 35, paragraphs (1) through (4) and Article 36" and "the proviso to Article 35, paragraph (1)" in Article 62, paragraph (7) shall be deemed to be replaced with "Article 35, paragraphs (1) through (4) and Article 36 as applied mutatis mutandis pursuant to Article 66" and "the proviso to Article 35, paragraph (1) as applied mutatis mutandis pursuant to Article 66," respectively; and the phrase "paragraph (6) of the preceding Article" in Article 62, paragraph (8) shall be deemed to be replaced with "Article 61, paragraph (6)."

Chapter III Penal Provisions

Article 71 In cases that fall under any of the following items, the manager, director, person retaining the bylaws, chairperson, or liquidator who has engaged in the acts set forth therein shall be subject to a non-criminal fine of up to 200 thousand yen:

(i) when the relevant person has failed to retain the bylaws, minutes or documents or electromagnetic records set forth in Article 45, paragraph (4) (including the cases where applied mutatis mutandis pursuant to Article 66), in violation of the provisions of the main clause of Article 33, paragraph (1) (including the cases where applied mutatis mutandis pursuant to Article 42, paragraph (5) and Article 45, paragraph (4) (including the cases where these provisions are applied mutatis mutandis pursuant to Article 66) and Article 66; hereinafter the same shall apply in this item) or the main clause of Article 33, paragraph (1) as applied by replacing certain terms pursuant to Article 47, paragraph (12) (including the cases where applied mutatis mutandis pursuant to Article 66);

(ii) when the relevant person has refused to offer for inspection the contents of the information recorded in the documents or electromagnetic records referred to in the preceding item, shown in accordance with the manner specified by the Ordinance of the Ministry of Justice without justifiable grounds, in violation of the provisions of Article 33, paragraph (2) (including the cases where applied mutatis mutandis pursuant to Article 42, paragraph (5) and Article 45, paragraph (4) (including the cases where these provisions are applied mutatis mutandis pursuant to Article 66) and Article 66);

(iii) when the relevant person has failed to prepare minutes, or to enter or record the matters to be entered or recorded in the minutes, or has made a false statement or record, in violation of the provisions of Article 42, paragraphs (1) through (4) (including the cases where these provisions are applied mutatis mutandis pursuant to Article 66);

(iv) when the person has failed to make a report or has made a false report, in violation of the provisions of Article 43 (including the cases where applied by replacing certain terms pursuant to Article 47, paragraph (12) (including the cases where applied mutatis mutandis pursuant to Article 66) and where applied mutatis mutandis pursuant to Article 66);

(v) when the relevant person has neglected to make the registration specified by Cabinet Order based on the provisions of Article 47, paragraph (3) (including the cases where applied mutatis mutandis pursuant to Article 66);

(vi) when the relevant person has failed to prepare an inventory of assets, or has made a false entry or record in the inventory of assets, in violation of the provisions of Article 48-2, paragraph (1) (including the cases where applied mutatis mutandis pursuant to Article 66);

(vii) where there are no directors or auditors or where there is a vacancy that results in a shortfall in the numbers thereof, when the relevant person has neglected to follow the procedures for appointing someone to the relevant position;

(viii) when the relevant person has neglected to give the public notice under the provisions of Article 55-7, paragraph (1) and Article 55-9, paragraph (1) (including the cases where these provisions are applied mutatis mutandis pursuant to Article 66), or has given false public notice;

(ix) when the relevant person has neglected to file a petition for the commencement of bankruptcy proceedings under the provisions Article 55-9, paragraph (1) (including the cases where applied mutatis mutandis pursuant to Article 66); or

(x) when the relevant person has obstructed an inspection under the provisions of Article 56-2, paragraph (2) (including the cases where applied mutatis mutandis pursuant to Article 66).

Article 72 A person who has violated the provisions of Article 48, paragraph (2) (including the cases where applied mutatis mutandis pursuant to Article 66) shall be subject to a non-criminal fine of up to 100 thousand yen.