Q: What is the significance of registering a building part as a "by-law common element" (規約共用部分) in a Japanese condominium, and how does it differ from statutory common elements?
In the intricate world of Japanese condominium law, the designation and registration of various parts of a building hold profound legal and practical implications for unit owners, management associations, and third parties engaging in transactions. A key distinction lies between "statutory common elements" (法定共用部分 - hōtei kyōyō bubun) and "by-law common elements" (規約共用部分 - kiyaku kyōyō bubun). While the former derive their status directly from the Act on Unit Ownership of Buildings (建物の区分所有等に関する法律 - Tatemono no Kubun Shoyū tō ni Kansuru Hōritsu, hereinafter "Condominium Ownership Act"), the latter require specific designation through the condominium's bylaws (規約 - kiyaku) and, crucially, registration to perfect their status against third parties. Understanding this distinction is vital for navigating ownership rights, responsibilities, and the scope of common property within a Japanese condominium.
Understanding Common Elements: The Foundation of Condominium Living
A condominium, known as a bunyō manshon (分譲マンション) in common parlance when referring to for-sale units, fundamentally consists of two types of spaces: exclusive-use portions (専有部分 - sen'yū bubun), which are individually owned units, and common elements (共用部分 - kyōyō bubun), which are shared by all or some unit owners. Common elements are essential for the structural integrity, access, and overall utility of the condominium complex.
The Condominium Ownership Act provides the framework for defining and managing these common elements. Their proper identification and legal treatment are critical for harmonious co-living, effective management, and clarity in real estate transactions.
Statutory Common Elements (法定共用部分): Common by Law
Statutory common elements are those parts of a condominium building that are deemed common elements by the Condominium Ownership Act itself, due to their inherent nature, structure, or purpose. Their status as common elements is not dependent on any specific provision in the condominium's bylaws.
Examples of Statutory Common Elements:
According to Article 2 of the Condominium Ownership Act, common elements include portions of the building other than exclusive-use portions. Article 4, Paragraph 1, further clarifies that hallways, staircases, and other parts of a building that are structurally available for common use by two or more unit owners are common elements, even if they are within the scope of what could otherwise be an exclusive-use portion. This typically encompasses:
- Structural components: The foundation, load-bearing walls, pillars, roof, and exterior walls of the building.
- Essential access ways: Hallways, staircases, elevators, and entrance lobbies that serve multiple units.
- Shared utilities and facilities (not belonging to exclusive-use portions): Pipes, wiring, and ducts for utilities that serve multiple units and are located outside individual units, as well as common utility rooms or storage areas if not designated otherwise.
Legal Characteristics:
- Automatic Status: Their common element status is automatic and does not require a bylaw designation or specific registration to be effective among unit owners.
- Shared Ownership: Statutory common elements are co-owned by all unit owners (or a subset, in the case of "partial common elements" (一部共用部分 - ichibu kyōyō bubun) serving only certain units). The share of co-ownership (持分 - mochibun) is generally proportionate to the floor area of the respective exclusive-use units, unless otherwise stipulated in the bylaws (Condominium Ownership Act, Art. 14).
- Inseparability: A unit owner's share in the common elements cannot be disposed of separately from their exclusive-use unit (Condominium Ownership Act, Art. 15).
By-law Common Elements (規約共用部分): Common by Designation
By-law common elements present a different scenario. These are parts of the condominium building that, by their structure and utility, could potentially function as independent, exclusive-use units but have been designated as common elements through a specific provision in the condominium's bylaws. This designation reflects a collective decision by the unit owners to dedicate such spaces for common use or management purposes.
Rationale for By-law Common Elements:
The provision for by-law common elements offers flexibility to condominium communities. It allows them to adapt spaces that might otherwise be sold or used exclusively to meet the specific needs of the residents. This can enhance the functionality and value of the condominium as a whole.
Examples of By-law Common Elements:
Common examples of building parts that might be designated as by-law common elements include:
- Administrator's Office (管理人室 - kanrininshitsu): An office space for the building manager.
- Meeting Rooms (集会室 - shūkaishitsu): Spaces for owners' association meetings or community events.
- Common Storage Areas: Storage rooms or lockers for shared use.
- Guest Rooms: Units set aside for use by guests of residents.
- Common Recreational Facilities: Such as a common library, a small gym, or hobby rooms, if these are structurally independent enough to have been exclusive units.
- Attached Buildings (附属の建物 - fuzoku no tatemono): An independent ancillary building (like a detached common storage shed or a separate meeting hall on the condominium grounds) can also be designated as a by-law common element (Condominium Ownership Act, Art. 4(2)).
The Crucial Role of Registration for By-law Common Elements
The most significant difference between statutory and by-law common elements lies in the requirement of registration for the latter to be effective against third parties.
Condominium Ownership Act, Article 4, Paragraph 2, Latter Part:
This key provision states: "Parts of a building provided for in Article 1 [i.e., parts that can constitute exclusive-use portions] and attached buildings may be made common elements by the bylaws; provided, however, that this may not be asserted against a third party without registration thereof."
Why is Registration Necessary?
The rationale behind this registration requirement is to protect the safety of transactions and prevent confusion. Since a by-law common element structurally resembles an exclusive-use unit, an unknowing third party (e.g., a potential purchaser or creditor) might mistakenly believe it to be an independent piece of real estate available for separate transaction or attachment.
If a building part that is designated as a common element by the bylaws is not registered as such:
- A unit owner (if that part was previously their exclusive unit) or the original developer might be able to sell it to an unsuspecting third party as if it were an exclusive unit.
- Creditors of the apparent owner might attempt to seize or attach it as an independent asset.
Registration as a "by-law common element" in the real property registry (不動産登記簿 - fudōsan tōkibō) serves as public notice of its common element status, thereby preventing such adverse claims from bona fide third parties who transact without notice of the bylaw provision.
Interaction with Civil Code Article 177 (Perfection of Real Rights):
Generally, Article 177 of the Japanese Civil Code (民法 - Minpō) stipulates that acquisitions, losses, or alterations of real rights in immovable property cannot be asserted against third parties unless they are registered. However, this principle has a modified application to condominium common elements.
For statutory common elements, their common ownership is an inherent consequence of owning an exclusive-use unit, and their status is not typically subject to individual transaction. Thus, their co-ownership does not usually require separate registration under Article 177 to be asserted among owners or against those aware of the condominium structure.
For by-law common elements, however, the situation is different. Because these parts could have been exclusive units, the registration mandated by Condominium Ownership Act Article 4(2) is precisely what makes their common status assertable against third parties, effectively fulfilling the public notice function that Article 177 of the Civil Code generally requires for real rights. Without this specific registration, the bylaw designation alone may not be sufficient to prevent a third party from acquiring rights as if it were an ordinary exclusive-use unit.
Legal Effects of Registering a By-law Common Element
Once a building part is duly registered as a by-law common element, several important legal consequences follow:
- Inseparability from Exclusive-Use Units: The registered by-law common element becomes an integral part of the common property. Its ownership share is tied to the exclusive-use units, and it cannot be independently sold, mortgaged, or otherwise disposed of separately from the exclusive-use units. Its fate is linked to the overall condominium property.
- Shared Ownership and Use: It is co-owned by all unit owners (or a defined subgroup if it's an "partial by-law common element"). Its use is governed by the bylaws and the Condominium Ownership Act.
- Cancellation or Modification of Previous Registrations: When a part is registered as a by-law common element, any existing registration that treated it as an exclusive-use unit (e.g., a separate ownership registration in the name of a developer or a specific individual) must be addressed. The registration of it as a common element effectively nullifies its status as an independent object of ownership. The Real Property Registration Act (不動産登記法 - Fudōsan Tōki Hō), Article 58, Paragraph 4, stipulates that when a registration of (by-law) common element is made, if there is no ownership registration for the building, the registrar shall ex officio delete matters concerning the title-deed holder (表題部所有者); if there is an ownership registration, the registrar shall ex officio delete the registration of rights. This ensures the registry accurately reflects its common status and prevents future conflicting transactions.
The Registration Process for By-law Common Elements
The process of registering a part of a building as a by-law common element involves specific steps and documentation:
- Establishment by Bylaw: First, the condominium owners' association must validly adopt or amend its bylaws to designate the specific part as a common element. This typically requires a special resolution at a general meeting of unit owners (Condominium Ownership Act, Art. 31).
- Application for Registration (登記申請 - tōki shinsei): An application is then made to the competent Legal Affairs Bureau (法務局 - Hōmukyoku).
- Applicant: The application is typically made by the management association (if incorporated as a 管理組合法人 - kanri kumiai hōjin), by the building manager (管理者 - kanrisha) if one is appointed and authorized, or by all the unit owners acting jointly or through a representative.
- Information Provided: The application must accurately identify the building part being designated, referencing its location within the condominium and its physical characteristics. If the common element serves only specific units (an "一部共用部分" - partial common element), those units must also be identified.
- Required Attached Information (添付情報 - tempu jōhō):
- Proof of Bylaw Establishment: This is a critical document, such as the certified minutes of the owners' association meeting where the bylaw was adopted, or a notarial deed (公正証書 - kōsei shōsho) if the bylaws were initially established in that manner by the original developer (Condominium Ownership Act, Art. 32).
- Consent of Interested Third Parties: If the part being designated as a common element is subject to existing rights (e.g., a mortgage, lease), the consent of these rights holders is generally necessary for the registration. This is because the designation changes the legal nature of the property and may affect their security or rights. For example, a mortgagee of what was an exclusive-use unit would need to consent because their specific mortgage on that unit would be extinguished and potentially replaced by a share in a mortgage over the entire condominium property if such arrangements are made.
- Building Drawings: Drawings that clearly delineate the area designated as the by-law common element are also required.
- Registration in the Registry: Upon successful application, the registrar will make an entry in the "display section" (表題部 - hyōdaibu) of the building's registration record, noting that the specified part is a "common element" and the date and cause of this status (e.g., "Bylaw Setting, [Date]"). As mentioned earlier, if there was a prior registration of this part as an exclusive-use unit with its own ownership, that registration will be cancelled or appropriately modified to reflect its new common status.
Special Consideration: By-law Common Elements and Integrated Site-Use Rights (敷地権 - Shikiken)
A particularly complex area arises when an exclusive-use unit that possesses integrated site-use rights (敷地権 - shikiken) is designated as a by-law common element. A shikiken represents the unit owner's right to use the condominium's land (e.g., ownership share, superficies, or leasehold) that is legally inseparable from the ownership of the unit itself.
The Q22 Scenario:
Question 22 in the provided source material addresses what happens to the shikiken when a shikiken-tsuki unit becomes a by-law common element. The core issue is how the inseparable land right is treated when the unit it's tied to loses its individual ownership status and becomes part of the common property.
The commentary suggests that the act of designating the unit as a by-law common element and cancelling its individual ownership registration does not, in itself, automatically extinguish or alter the substantive existence of the associated site-use right or its proportion. Instead, the site-use right can be considered to become "latent" (潜在的 - senzai-teki), remaining notionally tied to that portion of the building, which is now a common element. The practical implications include:
- No Change to Overall Land Rights: The total site-use rights held by all unit owners for the entire condominium site generally remain unchanged. The "latent" site-use right of the former unit (now common element) effectively becomes part of the collective land rights supporting the entire condominium, including all its common elements.
- Impact of Initial Shikiken Proportion:
- If the shikiken proportion for the unit-turned-common-element was originally registered as a specific value (e.g., 1/Nth share), that quantum of land right continues to exist, now supporting the common element.
- If the proportion was registered as "0" (zero), as sometimes occurs for units like administrator's offices or meeting rooms from the outset (often with the rationale that allocating a land share has no practical benefit if it's never intended to be sold separately), this can simplify matters as there's no specific "value" of shikiken to reallocate or account for if the common element status is later abolished. However, the source also notes that this approach could lead to complications if the bylaw is later abolished and the part is to be reinstated as an exclusive-use unit needing a shikiken.
- The source suggests that using a "-" (hyphen, indicating "non-applicable" or a system null) for the shikiken proportion of such by-law common elements might be a way to acknowledge the underlying land use without assigning a fractional value, though this would mean the total registered shikiken proportions for the building might not sum to 100%.
- Reverting to an Exclusive-Use Unit: If the bylaw designating the part as a common element is later abolished, and the part is to revert to being an exclusive-use unit, the "latent" site-use right would need to be "reactivated" and formally re-associated with the reinstated unit in the registry. This process would involve a building display modification registration (建物の表題部の変更登記). If the original shikiken proportion was non-zero, it would generally be revived. If it was "0" or "-", a new allocation or acquisition of site-use rights for that reinstated unit might become necessary.
The rationale is that the physical land supporting the building doesn't change; the land right merely follows the legal status of the building portion it serves. The registration of the unit as a common element primarily affects its disposability and ownership character, not the underlying necessity of land rights for its existence. Therefore, it is considered reasonable that the shikiken continues to exist in a latent form, integrated with the common element.
Implications for Condominium Owners and Third Parties
The distinction between statutory and by-law common elements, and the registration requirements for the latter, have direct consequences:
- For Unit Owners:
- Clarity of Rights and Obligations: Proper designation and registration clarify which parts are for shared use and how their maintenance costs are allocated.
- Restrictions on Disposition: Owners understand that by-law common elements, once registered, are not theirs to individually sell or encumber.
- Collective Decision-Making: The creation or abolition of by-law common elements typically requires collective agreement through the owners' association, reinforcing the communal nature of condominium living.
- For Third Parties (Potential Buyers, Lenders, etc.):
- Due Diligence: It is crucial for third parties to meticulously examine the property registry (both the building and land records) and the condominium's bylaws. This due diligence will reveal whether a part that appears to be an independent unit is, in fact, a registered by-law common element and therefore not available for separate purchase or as standalone collateral.
- Reliance on the Registry: The registration system provides a degree of certainty. A third party who relies on the registry and finds no registration indicating a part is a common element (when it structurally could be an exclusive unit) may be protected if they acquire rights in good faith. Conversely, once a by-law common element is registered, its common status is perfected against all third parties.
Conclusion
In Japanese condominium law, while statutory common elements are common by their very nature, by-law common elements achieve their common status through specific designation in the condominium's governing documents. The registration of this designation is not a mere formality; it is a critical legal step that makes the common element status enforceable against third parties, preventing potential conflicts and ensuring clarity in property rights. This is especially pertinent because by-law common elements often have the physical characteristics of exclusive-use units. Understanding this, along with the nuanced implications for integrated site-use rights (shikiken), is essential for anyone involved with Japanese condominiums, from individual owners and management bodies to legal and real estate professionals. The integrity of the condominium as a shared living and investment space relies heavily on the precise definition and transparent registration of all its constituent parts.