New law seeks to curb real estate ad excesses
Five minutes from the station!! Newly completed, 20 million yen!! Flyers hawking properties with slogans such as these seem to pile up in your mailbox like moths attracted to a street lamp.
Nikkan Gendai (June 26) reports that on May 31, a new law cracking down on deceptive real estate advertising went into effect. Henceforth the industry will be subject to stricter scrutiny by guardians of consumer rights.
“When you see the headlines in a flyer, the item using the largest typeface—like a headline—is the most sellable attribute,” explains property authority Yukio Sakurai. “If it says ‘Three minutes from a station,’ they’re pushing its convenience; if it reads ‘Quiet neighborhood,’ they are pushing living comfort; and if they say ‘3LDK, XXXXXX yen,’ then they’re appealing with a price below the going market rate.
“Conversely, the items listed in a smaller typeface are the weak points. It might be in a quiet neighborhood, but a long way from the station. Or, it might be close a station, but the price is higher than it ought to be, and so on.
“So when you consider a property shown on a flyer, you should begin by first grasping what are the property’s likely weak points.”
A new revision in the law permits realtors to indicate when prices have been dropped. So if the broker may, if he chooses, show both the original price and the new price. This is likely to spur more agents to push properties by stating “Reduced by XXXXX yen,” or “30% off the original price.” While it is illegal to falsify the original price in such ads, it should be obvious that the more generous the price reduction, the greater the ad’s impact. Ergo, potential buyers should be wary of swallowing such statements without investigating what might have spurred such a drop in price.
As far as the other attributes of a residence, the first thing a shopper should check out is the property’s actual street address. There are some places that one can’t go to see by oneself, due to some difficulty in accessing the location. Caution should also be given to the details explaining “Kotsu” (Transportation). An agent might treat a one minute walk as 80 meters. This would be the equivalent of striding at a speed of 4.8 kilometers per hour, and obviously not achievable by an elderly person. And the stated time may also disregard other obstacles such as climbing steps or waiting for traffic lights to change.
“Based on experience,” says Sakurai, “It makes sense to trust claims of up to 10 minutes walk, but those of 15 minutes or over are unrealistic.”
The fine print on the flyers should also be carefully scrutinized for zoning information. Class-1 residential areas limit building heights to 10 meters. In commercial areas, a resident might find exposure to sunshine blocked off by neighboring buildings.
Flyers also often run a conceptual drawing of how the building will appear upon completion. Under the new regulations brokers are prohibited from use of illustrations that diverge considerably from the completed building, but some are rendered too vaguely.
“While it’s rare to see many claims or lawsuits concerning the discrepancy between a conceptual diagram and the final design, many buyers do file claims over the view,” says Sakurai. “If a residence makes the claim of offering a view of the Tokyo Sky Tree, then this should be confirmed beforehand.”
Many flyers will also show floor plans for the building’s corner units, which tend to be most favored by residents, but ignore the most common type of floor plan and orientation (such as facing south, etc). Again, the article emphasizes, people need to confirm such things beforehand. The new law notwithstanding, promotional flyers can still convey false impressions that will lead to disappointments.