National

Leopalace21 moving over 14,400 residents out of defective apartments across Japan

Kyodo

Rental apartment operator Leopalace21 Corp. said Friday that it is moving 14,443 residents out of their homes to repair defects found in 1,324 units stretching across 32 prefectures.

The move follows an earlier wave of 7,782 residents evacuated from 641 of its apartments in which a fire-resistant material in the ceilings had been incorrectly installed, after the buildings were judged to be particularly unsafe to live in.

The company said Thursday it also discovered cases where external walls did not meet fire-protection requirements, and where interior walls did not meet sound insulation standards because of substandard materials.

“I’m concerned that there might be other problems apart from the defects discovered this time,” said Chie Matsuyama, 41, who lives in a Leopalace21 apartment in Minato Ward, Tokyo. “I don’t want to sleep here but there’s nowhere else I can go.”

A 47-year-old employed man said he had not yet received any information from the rental apartment operator. “I want them to tell me whether my place is safe or not,” he said. “I have no time to move out” ahead of what he expects to be a busy period at work, he added.

A 49-year-old man living in the city of Tondabayashi, Osaka Prefecture, said, “I knew that footsteps on the floor above were noisy, but I was surprised to hear this news. I’m afraid of (the possibility of) a fire.”

On Friday, land minister Keiichi Ishii said the defects were “deeply regrettable,” adding that the ministry “will take measures to secure safety.”

Residents are being contacted by phone or letter and are being offered temporary accommodations in other Leopalace21 properties.

Leopalace21 launched an investigation into possible defects in its nearly 40,000 apartments nationwide after 38 cases were found last May in apartments built between 1996 and 2009. The 1,324 faulty apartments, some of which have substandard fire protection, were built between 1996 and 2001. Reasons given for the defects include poor communication between the company’s design department and procurement section, and misleading instructions in architectural documents, according to the company.

“This was because of inadequate construction management,” said Leopalace21 CEO Eisei Miyama during a news conference Thursday, vowing to carry out an investigation into what went wrong.

But Kazuto Tajiri, a Leopalace21 executive, who also attended the news conference, said the firm is not planning to launch an independent third-party investigation panel.

Since the company plans to shoulder all the tenants’ moving expenses and repair the faulty buildings, it will book a special loss of ¥36 billion in the current fiscal year to March.Leopalace21 now expects a group net loss of ¥38 billion to ¥40 billion for this fiscal year, larger than a earlier estimated loss of ¥5 billion to ¥7 billion. The company’s announcement triggered a drop in its stock price Friday, which fell by the ¥100 daily limit, representing a 19.4 percent drop, and ended the day at ¥415.

The Tokyo-based company has decided to cut Miyama’s monthly salary by 30 percent and that of other executives by 20 percent for a six-month period starting in February.

Miyama said he intends to continue leading the firm at least until the investigation unearths the causes.

“When (this task) reaches a certain point, I’d like our three outside directors to think about” whether I should step down, Miyama said.