Earthquake-Resistance Fraud in Japanese Condominiums: Legal Recourse for Affected Residents and Buyers

Japanese Attorney at Law - Bengoshi L.L.

• 8 min read

Japan's susceptibility to earthquakes places an immense emphasis on the structural integrity of its buildings. The Building Standards Act (建築基準法 – Kenchiku Kijun Hō, hereinafter "BSA") provides the regulatory framework for ensuring building safety, including strict requirements for earthquake resistance. However, instances of fraudulent structural calculations—starkly highlighted by the "Aneha scandal" in 2005 where an architect systematically falsified earthquake resistance data for numerous condominiums and hotels—have shaken public trust and revealed vulnerabilities in the system. When such fraud comes to light, affected parties, including nearby residents fearing collapse and purchasers or current occupants of the compromised building, seek legal recourse.

This article explores the primary administrative law remedies available in Japan to challenge the legality of such buildings and to compel corrective action, focusing on the complex procedures and legal doctrines involved.

The Japanese Building Permit Process: Key Certifications and Bodies

Understanding the available legal actions requires a basic grasp of Japan's building approval process:

  1. Structural Calculation Conformity Assessment (構造計算適合性判定 – kōzō keisan tekigōsei hantei): For buildings of a certain scale or type (e.g., multi-story condominiums), the BSA (Article 6-3) mandates that the structural calculations demonstrating earthquake resistance must undergo a conformity assessment by the prefectural governor or a designated structural calculation conformity assessment body (指定構造計算適合性判定機関 – shitei kōzō keisan tekigōsei hantei kikan) before a building confirmation can be issued. This is a peer-review like check on the structural design, strengthened after the aforementioned fraud scandals.
  2. Building Confirmation (建築確認 – kenchiku kakunin): Before commencing construction, the building owner must obtain a building confirmation from a public building official (kenchiku shuji – 建築主事) of the local municipality or a private designated confirmation and inspection body (指定確認検査機関 – shitei kakunin kensa kikan) (BSA Article 6, Article 6-2). This confirms that the building plans comply with the BSA and related regulations, including structural standards. A confirmation from a designated body is legally deemed equivalent to one from a public official.
  3. Inspection Certificate (検査済証 – kensazumi-shō): Upon completion of construction, the building must pass a completion inspection by a building official or a designated body. If it conforms to the confirmed plans and legal standards, an inspection certificate is issued (BSA Articles 7, 7-2). This certificate is generally required before the building can be lawfully used (BSA Article 7-6).

The involvement of private "designated bodies" in these crucial checks was a result of reforms aimed at streamlining processes, but it also became a focal point of concern during the structural fraud incidents, leading to subsequent tightening of their oversight.

If suspicions of structural fraud arise while a condominium is still under construction, affected third parties (typically nearby residents fearing for their safety and property) or potentially even prospective buyers with a vested interest might consider several administrative litigation avenues:

1. Challenging the Building Confirmation

A revocation suit (取消訴訟 – torikeshi soshō) under Article 3, Paragraph 2 of the Administrative Case Litigation Act (ACLA) can be filed against the building confirmation.

  • Nature as a Disposition: A building confirmation, even if issued by a private designated body, is considered an administrative disposition due to its legal effect of permitting construction. The defendant in such a suit would be the designated body that issued the confirmation (ACLA Article 11, Paragraph 2).
  • Standing (Genkoku Tekikaku): Nearby residents who face a direct threat to their lives or property from the potential collapse of a structurally deficient building are generally recognized as having the "legal interest" required for standing. This principle has been affirmed in various contexts (e.g., Supreme Court, Second Petty Bench, Judgment of January 22, 2002, Minshu Vol. 56, No. 1, p. 46, concerning a large-scale building project; Supreme Court, First Petty Bench, Judgment of December 17, 2009, Minshu Vol. 63, No. 10, p. 2631, involving a Tokyo building safety ordinance).
  • Interest to Sue (Uettae no Rieki): As long as construction is ongoing or has not been completed and certified as lawful, revoking an illegally granted building confirmation serves the purpose of halting unlawful construction or preventing the building's use. Thus, the interest to sue generally exists (see Supreme Court, Second Petty Bench, Judgment of October 26, 1984, Minshu Vol. 38, No. 10, p. 1169 – the Sendai City Building Confirmation Case, though this case is more often cited for loss of interest after completion).
  • Statute of Limitations (ACLA Article 14): A revocation suit must be filed within six months of knowing of the disposition, or within one year of the disposition date if unaware. The public display of the building confirmation at the construction site (BSA Article 89) might be deemed to trigger "knowledge" for nearby residents, potentially starting the six-month clock. A "justifiable reason" for delay can extend this period.

2. Challenging the Structural Calculation Conformity Assessment

Similarly, a revocation suit can be filed against the structural calculation conformity assessment.

  • Nature as a Disposition: This assessment is a prerequisite for building confirmation for relevant structures and directly impacts the builder's ability to proceed. BSA Article 94, Paragraph 1 also refers to actions by designated conformity assessment bodies as "dispositions" for administrative appeal purposes, supporting its character as a disposition for litigation.
  • Succession of Illegality (Ihōsei no Shōkei – 違法性の承継): A crucial question is whether an illegal conformity assessment (e.g., one that failed to detect fraudulent calculations) taints the subsequent building confirmation. Japanese administrative law allows for the "succession of illegality" under certain conditions. If the conformity assessment and the building confirmation are seen as integrally linked parts of a single administrative process aimed at ensuring structural safety, and if third parties had limited opportunity to challenge the assessment directly before the confirmation was issued, then its illegality could be argued as a ground for revoking the building confirmation itself. The Supreme Court's reasoning in the building safety certification context (Judgment of Dec. 17, 2009) regarding linked administrative acts provides a strong analogy. Key factors include the unitary purpose, combined effect, lack of direct notice of the earlier act to third parties, and the reasonableness of third parties waiting for the later, more impactful act (the building confirmation) to sue.
  • Other litigation requirements (defendant, standing, interest, statute of limitations) would be similar to those for challenging the building confirmation.

3. Seeking Nullity Confirmation (Mukō Tō Kakunin Soshō – 無効等確認訴訟)

If the statute of limitations for a revocation suit has passed, an action for confirmation of nullity of the building confirmation or conformity assessment (ACLA Article 3, Paragraph 4) might be an option. However, nullity requires a "grave and manifest defect" (重大かつ明白な瑕疵 – jūdai katsu meihaku na kashi). Proving that structural calculation fraud was "manifest" (obvious to a reasonable third party) at the time the confirmations were issued can be extremely difficult. Some lower court precedents, such as in the Monju reactor litigation (e.g., Nagoya High Court, Kanazawa Branch, Judgment of January 27, 2003, Hanrei Jihō No. 1818, p. 3), have suggested that the "manifestness" requirement might be relaxed where fundamental safety or human life is at stake, but this is not a universally accepted position.

4. Mandatory Action: Seeking a Stop-Work Order (Kōji Sekō Teishi Meirei – 工事施工停止命令)

Affected parties can file a direct-type mandatory action suit (ACLA Article 3, Paragraph 6, Item 1) to compel the "specified administrative agency" (特定行政庁 – tokutei gyōsei-chō, usually the mayor of the city or the prefectural governor) to issue a stop-work order against the construction company under BSA Article 9, Paragraph 1.

  • The defendant would be the city or prefecture.
  • Standing requirements would be similar to those for challenging the building confirmation (i.e., direct threat of harm).
  • Crucially, this type of suit requires proving "grave harm that will be caused by the absence of the disposition" and that there are "no other appropriate means to avoid such harm" (ACLA Article 37-2, Paragraph 1). Demonstrating these can be challenging if, for example, civil injunctions are theoretically available, though the distinct public law nature of compelling administrative enforcement might satisfy the "no other appropriate means" test.

Challenges After Construction Completion

The legal landscape shifts significantly once the condominium is completed.

The "Loss of Interest to Sue" Problem for Confirmations

A major hurdle, established by the Supreme Court in the Sendai City Building Confirmation Case (Judgment of Oct. 26, 1984), is that the objective interest to sue for the revocation (or nullity) of the building confirmation (and by extension, the structural calculation conformity assessment) is generally lost once construction is completed, even if the final inspection certificate has not yet been issued.

  • Rationale: The primary legal effect of a building confirmation is to authorize lawful construction. Once construction is physically complete, revoking the authorization to build does not, by itself, make the existing building disappear or automatically trigger a legal obligation for its demolition. Furthermore, the continued existence of a (now-revoked) building confirmation does not legally prevent the issuance of an inspection certificate if the completed building meets standards, nor does it preclude the issuance of a violation correction order under BSA Article 9(1) if the building is found to be non-compliant. Thus, after completion, revoking the initial permit is seen as having no practical legal effect in terms of rectifying the existing physical structure.
    This principle severely limits challenges to the initial permits once the building is physically standing.

What if the Inspection Certificate (Kensazumi-shō) is Issued?

  • Challenging the Inspection Certificate Itself: Filing a revocation suit against the inspection certificate is theoretically possible, as its issuance is an administrative disposition allowing lawful use of the building (BSA Article 7-6). However, for nearby residents primarily concerned with structural collapse, establishing standing and a direct interest in its revocation can be difficult. The certificate's primary legal effect relates to lawful occupancy, not necessarily a re-affirmation of long-term structural safety against latent fraudulent calculations in a way that directly impacts their specific safety rights beyond the fact of the building now being usable. The logic of the Sendai City case regarding the practical utility of revocation might also apply here.
  • The Primary Post-Completion Remedy: Mandatory Action for Demolition or Strengthening Orders
    Once the building is complete (and especially if an inspection certificate has been issued, legitimizing its use), the most viable administrative law remedy for affected parties (both nearby residents and potentially the building's own occupants/owners' association if they discover the fraud) is to file a direct-type mandatory action suit.
    This suit would seek to compel the specified administrative agency (city/prefecture) to exercise its powers under BSA Article 9, Paragraph 1. This article grants the agency authority to issue orders against buildings that violate the BSA or permit conditions, including orders for:The litigation requirements (standing, "grave harm," "no other appropriate means") for such a mandatory action would be similar to those for seeking a stop-work order during construction. For residents and occupants facing the risk of a structurally deficient building, arguing "grave harm" (threat to life and property) is often straightforward. The challenge lies in convincing the court that the specified administrative agency has a clear legal duty to issue such a drastic order and that its failure to do so is illegal.
    • Demolition (除却 – jokyaku)
    • Repair (修繕 – shūzen)
    • Strengthening (改築 – kaichiku or other necessary structural measures)
    • Prohibition of use (使用禁止 – shiyō kinshi)
    • Restriction of use (使用制限 – shiyō seigen)

The Role of Designated Confirmation and Inspection Bodies

The introduction of private designated confirmation and inspection bodies was intended to improve efficiency but also became a point of weakness exposed by the structural fraud scandals. These bodies, often corporations, perform public functions. While they can be defendants in suits challenging their confirmations, their negligence can also lead to civil liability. The scandals prompted BSA amendments in 2006 to strengthen the structural calculation conformity assessment system and increase oversight of these designated bodies, including stricter designation requirements and enhanced inspection powers for specified administrative agencies.

Beyond Administrative Litigation: Other Avenues (Brief Mention)

While this article focuses on administrative law remedies, it's important to note that affected parties (especially condominium purchasers) also have significant recourse through civil litigation. This can include:

  • Claims against developers and sellers for defect liability under contract law or the Housing Quality Assurance Act (住宅の品質確保の促進等に関する法律 – Jūtaku no Hinshitsu Kakuho no Sokushin tō ni Kansuru Hōritsu).
  • Tort claims against negligent architects, developers, or even designated confirmation and inspection bodies that failed in their duty of care.

Conclusion

Addressing earthquake-resistance fraud in Japanese condominiums through administrative law presents a complex, stage-dependent array of legal options. During construction, challenging the initial building confirmation and structural calculation conformity assessment, or seeking stop-work orders, are key strategies. However, once construction is complete, the focus shifts dramatically towards compelling the relevant public authorities to issue corrective orders, such as demolition or strengthening, under Article 9, Paragraph 1 of the Building Standards Act. The stringent "loss of interest to sue" doctrine for initial permits post-completion makes these mandatory actions for subsequent corrective measures the primary administrative law tool for tackling the dangers posed by already existing, structurally deficient buildings. These legal battles often involve intricate interpretations of the Building Standards Act, the Administrative Case Litigation Act, and a careful assessment of the specific risks and harms involved.