8 billion yen outlay eyed to repair shoddy condo fiasco

Buyers would still have to repay loans

by Reiji Yoshida and Kaho Shimizu

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News photo
Chief Cabinet Secretary Shinzo Abe, flanked by economy minister Kaoru Yosano – and land minister Kazuo Kitagawa, addresses a government meeting Tuesday on aid for condominium owners in the shoddy building scandal.

The seven complexes, sold by developer Huser Ltd., based in Tokyo’s Chiyoda Ward, were constructed using falsified data provided by architect Hidetsugu Aneha.

The package, a bid to ease widespread public anxiety about the structural soundness of condominium buildings, was approved by eight Cabinet ministers at a meeting Tuesday morning.

The government plans to spend 5 billion yen on a rebuilding project and 3 billion yen to help pay for inspections of condominiums amid widespread concern over their level of earthquake resistance.

The 8 billion yen package will be included in a supplementary budget to be submitted to the Diet early next year.

The government Tuesday revised the number of buildings affected by the doctored data to 57, mainly condominiums and hotels, located in 13 prefectures, including Tokyo.

The seven complexes facing state support are among the 57 structures that were designed based on Aneha’s bogus quake-proofing data. The seven could collapse if hit by an earthquake of upper 5 on the Japanese seismic intensity scale to 7.

The government is now examining the quake-resistance of three more condominium complexes that may be covered by public assistance, Land, Infrastructure and Transport Minister Kazuo Kitagawa told a news conference.

“This is a matter to be settled in court (by private parties) eventually,” Kitagawa said.

But the government took the emergency measure due to “the urgency and public nature of the matter,” Kitagawa said, in explaining the decision to give public assistance to the residents.

The defective condominiums discovered thus far were all built and sold through private contracts.

But government-designated inspection firms, including eHomes Inc., failed to detect fraudulent quake-resistance data used in dozens of the defective building designs by Aneha Architect Design Office of Ichikawa, Chiba Prefecture.

Under the rebuilding plan, local governments, using state subsidies, will buy the seven complexes in question from owners for the price of the land on which they stand, as the buildings have no value, and demolish them.

The owners can use the money to pay back part of their housing loans.

The central and local governments will build new complexes on the sites and resell units to those original residents who want them.

In rebuilding the residences, the governments will shoulder the costs for those parts of the buildings shared by residents, including stairs and elevators, the land ministry said.

For residents living in other defective condos designed by Aneha, the government will offer public housing as temporary evacuation shelters, and will reduce the financial burden of those who have housing loans from state-backed financial institutions, the government said.

However, experts say it remains uncertain how much the residents will have to shoulder.

“The governments will discuss the details of the support scheme on how much they will assist the residents when the apartment buildings are completely rebuilt,” said Kazuhiro Yoshioka, an attorney specializing in defective housing.

Another attorney, Toshio Kawai, said the central and municipal governments should first compensate the residents by buying their properties. Under the scheme, the government will only buy the land, leaving the residents to repay loans on the defective buildings.

“Regardless of who is most to blame, it is clear that the central and municipal offices share responsibility in this scandal,” Kawai said.

“The central and local governments, the condominium sellers and the building inspection companies are all collectively responsible to the residents,” he said. “The governments should first compensate the residents and then decide on burden-sharing with the retailers and the inspection entities.”

The government’s aid package did not touch on the liability of the condominium retailers and building inspection firms, but officials have said the state plans to make them own up to their roles in the falsifications.

“Since the conditions for contracts for retailers to sell properties clearly state that they bear responsibility for any defects, we will ask the retailers to foot the bill later on” after determining how much of the costs they should shoulder, vice land minister Nobuaki Sato told reporters Monday.

After searching Aneha’s office, the Chiba Prefectural Government found that the firm has designed 208 buildings since 1996.