Remedies for unknowingly buying defective property?

What the Law Says

Japanese law provides specific protections for buyers who discover hidden defects in real property after purchase. The Civil Code sets strict time limits and conditions for exercising remedies.

Under Article 566 of the Japanese Civil Code, a buyer may demand either reduction of the purchase price, damages, or rescission of the contract if the property has a hidden defect that impairs its value or use.

The buyer must notify the seller of the defect without delay after discovery. Legal action must be initiated within 1 year from the time the buyer discovers the defect — this is known as the 'discovery period'.

However, there is also an absolute time limit: no claim may be made more than 10 years after the property was delivered to the buyer, regardless of when the defect was discovered.

Article 570 clarifies that these remedies apply only to 'hidden defects' — those not apparent upon ordinary inspection at the time of sale and that existed at the time of delivery.

Statutory Text

If the thing sold has a hidden defect which impairs its value or its fitness for the purpose for which it is ordinarily used, the buyer may, within one year from the time he discovers the defect, demand damages or rescind the contract.

— Civil Code, Art. 566 — Right to Demand Damages or Rescission

Statutory Text

The provisions of the preceding Article shall not apply if the buyer knew, or could have discovered by ordinary care, the existence of the defect at the time of the contract.

— Civil Code, Art. 570 — Exclusion of Liability for Known Defects

What to Do

Sources