The Tokyo District Court on Monday ordered Urban Development Corp. to pay 67 million yen to a group of residents demanding compensation over the public entity’s decision to lower the prices of condominiums after they had bought theirs.

Judge Toshifumi Shibata ruled that discounting the condos was not in itself illegal. However, he said, the corporation was aware that the initial prices on the condos were too high.

“It should have explained (to potential buyers) that it was not planning to put the properties on sale (to the general public) anytime soon, and should have given them an opportunity to make a fair judgment on whether to buy the units,” he said.

The plaintiffs — 58 people representing 41 households in public housing units in Kashiwa, Chiba Prefecture, and Kohoku Ward, Yokohama — had demanded some 575 million yen in damages as well as the price difference between their units and those sold later.

The case is special because the condominium complexes at issue were once public housing complexes that were rented out, and residents were given priority in purchasing units after the complexes were rebuilt. But it is the first time for a court to rule at least partially in favor of plaintiffs with regard to discounts on public condo units.

According to the court, the plaintiffs signed an agreement with the corporation saying they would be given priority purchasing rights when the rebuilding began in 1991.

They then bought the units from around 1994 and 1995 at prices ranging between 33 million yen and 59 million yen.

However, the remaining units in the two complexes were put on sale to the general market in 1998 at prices averaging about 8.5 million yen lower at the Kashiwa complex and some 16.3 million yen less in Yokohama.

The judge said that act itself did not violate the agreement with the residents, which says that they would not be put at a disadvantage regarding the sales price.

This “does not limit the initial price tag the corporation puts on the units after the passage of a long period of time,” Shibata said.

But at the same time, he ruled that one reason the remaining units were not put on the market immediately was clearly because their selling price was too high to be attractive to buyers, and therefore the corporation was at fault.

“As a result, the residents were not made aware that the remaining units would not be put on sale in the near future, and wound up buying expensive homes and suffered serious anguish,” he said.

The plaintiffs expressed satisfaction with the ruling, which they said acknowledged the problems with the corporation’s attitude.

Yoshihisa Nakajima, 47, said, “I am very happy that the court has made a decision that satisfies us.”

Asked if they were unhappy with the amount of money awarded them, their lawyers said the main issue was not money.

“In the past, (the courts) did not accept arguments that denounced the corporation, but we made headway on the point that it ‘failed to carry out its obligation to explain,’ ” said Masaomi Suitsu, who headed the lawyer team.

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