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TOKYO: When Tokyo won the right to host the Olympics, enthusiastic buyers flocked to purchase luxury condos planned for the extensive development that will house athletes during the event.
But with the Olympics delayed a year due to the global pandemic and uncertainty still clouding the Games, shopper excitement has turned to frustration. Even though move-in dates have been pushed back a year, they say they’ve heard little from real estate companies.
Two dozen buyers of units in Harumi Flag, the 5,600 condo complex on Tokyo’s waterfront, are seeking compensation for the delay from developers.
“Any change on move-in day is an extremely important factor in a real estate sales contract,” said Hironobu Todoroki, a lawyer who represents buyers in civil mediation, whose goal is to resolve disputes through discussion.
Real estate companies should have met with buyers to explain the situation, he said, adding that he would consider a lawsuit if mediation failed.
A condo complex in the Athletes’ Village for the 2020 Olympics is seen behind the fences in Tokyo, Japan, on March 1, 2021. (Reuters / Kim Kyung-Hoon)
A spokeswoman for Mitsui Fudosan Residential, the lead developer among the 10 real estate companies involved, said it has responded to inquiries and will continue to do so.
He said the company will continue to create opportunities to explain the situation to buyers and respond as necessary to civil mediation or other legal action.
Buyers have been told they can cancel contracts due to the delay. Mitsui Fudosan Residential declined to say whether any contracts had been canceled.
A 45-year-old woman is among those seeking compensation. She and her husband have had to delay the sale of their home due to the delay.
They bought a 95-square-meter condo on Harumi Flag for 85 million yen (US $ 784,000). But she was “surprised” that the only contact about the delay was a short letter from the developers. That is in stark contrast to the many face-to-face meetings required when shopping, he said.
“After all that, I thought, ‘What? Is that all?'” The woman said. She and other buyers spoke on condition of anonymity due to the sensitivity of the situation.
LAND CLAIMED
Built on reclaimed land, Harumi Flag is designed to house about 12,000 people in 23 buildings. It includes shops, a park and a school. The tenants were supposed to move in starting in 2023. Mitsui Fudosan Residential declined to say how many units have been sold.
A condo complex in the Athletes’ Village for the 2020 Olympics is seen behind the fences in Tokyo, Japan, on March 1, 2021. (Reuters / Kim Kyung-Hoon)
A 37-year-old medical researcher said he bought a spacious 110-square-meter condo because he plans to live with his fiancée and parents. But the unexpected delay means they will share their current two-bedroom home until the new condo is ready.
At 65 square meters, his current home is too small for four adults, he said.
The project cost the Tokyo government 54 billion yen (US $ 500 million), including road works and infrastructure. On top of that, the government paid 4.2 billion yen to developers to rent the complex for one year, using it as an Olympic village for some 10,000 athletes.
Due to the delay, the lease was extended for one more year, for 4.2 billion yen.
Todoroki, the lawyer, said he would raise the legitimacy of the lease extension in civil mediation, since the condos were already sold.
The Tokyo government and Mitsui Fudosan Residential said they saw no problem in extending the lease.
Another buyer, a man in his 30s, said developers should use part of the $ 4.2 billion from the lease extension to pay compensation.
Mitsui Fudosan Residential declined to comment on her situation.
The delay had interrupted her plan to move a year before her daughter started elementary school in 2024, she said.
He will attend school in Harumi, he said. Now, he worries, she won’t be able to make friends and settle down before starting school.
