Protection of deposits (tetsukekin-tō) that a Chinese-speaking buyer of a new-build "off-the-plan" (aota-uri) property checks

In short: when buying a new-build before completion (aota-uri), the deposits a buyer pays are protected by the Real Estate Brokerage Act's "measures to secure deposits (tetsukekin-tō)." It is a system that works when the seller is a real estate agent and the buyer is not (Art. 78(2)). Property before completion of construction (uncompleted) is under Art. 41, property after completion (completed) under Art. 41-2, and the methods of security differ. Uncompleted allows only (1) a guarantee-commission contract with a bank etc. or (2) a guarantee-insurance contract with an insurer; completed adds (3) a deposit trust contract with a designated custodian. Security is required when the deposits exceed 5% of the price or 10 million yen (uncompleted), or 10% of the price or 10 million yen (completed); after ownership is registered to the buyer, it is not required regardless of amount. The outline of the security is explained in the important-matters explanation (Art. 35). The important-matters explanation and sale contract are ours (the real estate agent); ownership registration is the judicial scrivener's; tax on transfer/acquisition is the tax accountant's; a report under the Foreign Exchange Act is for the buyer and the handling bank — the roles are separate.

This is for investors from mainland China and Taiwan buying a Japanese new-build condominium or house before completion, and for the local real estate and legal professionals advising them: the off-the-plan-specific "measures to secure deposits," set out down to the articles of the Real Estate Brokerage Act. Deposits and loan conditions in a second-hand or ordinary sale are split off to contract clauses a Chinese-speaking buyer tends to misread. The important-matters explanation, the sale contract and confirming the security are done by us (the real estate agent); registration goes to the judicial scrivener, tax to the tax accountant, and the Foreign Exchange Act report to the buyer and the handling bank. These are independent business entities, each engaged directly. This article does not judge the feasibility of any particular transaction.

What is aota-uri (pre-completion sale), and why does deposit protection become an issue?

"Aota-uri" means selling a building before it is completed. The term likens it to selling rice before the paddy has ripened, and is common in the sale of new-build condominiums and spec houses. The buyer contracts without seeing the finished thing, pays a deposit and interim payments in advance, and takes delivery several months to over a year later.

The issue here is: if the seller goes bankrupt before delivery, does the money paid in advance come back? In aota-uri, the buyer prepays part of the price in the interval between contract and delivery. If the seller (developer) collapses before delivery, the buyer may get neither the property nor the money back.

What protects the buyer from this pre-delivery risk is the Real Estate Brokerage Act's measures to secure deposits (tetsukekin-tō). "Deposits" here is defined by Art. 41(1) as "money given and received as all or part of the price, and money given and received under the name of a deposit or otherwise that is applied to the price, which is paid on or after the day the contract is concluded and before delivery of the land or building." It covers not only the deposit but interim and part payments — broadly, price-applied money paid before delivery.

This system works when the seller is a real estate agent and the buyer is not (the self-sale restriction; Art. 78(2)). Because in a new-build aota-uri the seller is often a developer (a real estate agent), this protection usually applies. It does not apply to a sale between individuals, or where the buyer is itself a real estate agent.

When, and from what amount, is a measure to secure deposits required?

The threshold at which security becomes required differs by uncompleted or completed.

State of property	Range where security is NOT required (can receive without a measure)	Basis
Before completion (uncompleted / aota-uri)	Deposits of 5% or less of the price AND 10 million yen or less	Real Estate Brokerage Act Art. 41 and its Cabinet Order
After completion (completed)	Deposits of 10% or less of the price AND 10 million yen or less	Real Estate Brokerage Act Art. 41-2 and its Cabinet Order
When ownership is registered to the buyer / the buyer registers ownership	Not required regardless of amount	Art. 41, Art. 41-2

To receive deposits above this threshold, the security must be provided before receiving them. For example, on an uncompleted 100 million yen condominium, paying a 6 million yen deposit (6%) exceeds 5% = 5 million yen, so the seller must provide the security before receiving it. Conversely, once ownership has been registered to the buyer, the buyer's right is protected by the registration, so security is not required.

Note that the judgment is on "the cumulative deposits paid before delivery," not "the amount paid at once." Even if the deposit and interim payment are paid separately, if their total exceeds the threshold they are subject to security. Because aota-uri often sets interim payments, confirm before contracting whether the total across the payment schedule exceeds the threshold.

How does the method of security differ between uncompleted and completed (Art. 41 / Art. 41-2)?

The "method" of security differs in the means available between uncompleted (Art. 41) and completed (Art. 41-2). This is the difference that matters most in aota-uri.

Method of security	Uncompleted (Art. 41)	Completed (Art. 41-2)
(1) Guarantee-commission contract with a bank etc. (a bank jointly guarantees the refund obligation)	Yes	Yes
(2) Guarantee-insurance contract with an insurer (insurance covers loss from non-performance of the refund obligation)	Yes	Yes
(3) Deposit trust contract with a designated custodian (a third party holds the deposits)	No (unavailable)	Yes

Art. 41(1) provides that, for uncompleted property, the agent may not receive deposits until it has provided one of two: a guarantee-commission contract with a bank etc. or a guarantee-insurance contract with an insurer. Art. 41-2(1) allows, for completed property, in addition to these two, a deposit trust contract with a designated custodian (a contract under which the designated custodian receives and holds the deposits in place of the agent).

In other words, in aota-uri (uncompleted), the "trust" type held by a third party is unavailable, and the refund obligation is secured by a bank guarantee or insurance. What a buyer or local professional should confirm is: whether a security measure has been provided; which method it is — guarantee-commission, guarantee-insurance, or (if completed) trust; and whether the name, amount and term of the guarantee cover the amounts and timing of payment. The outline of the security is stated in the important-matters statement (Real Estate Brokerage Act Art. 35) and explained by the transaction specialist before contracting.

What documents should a Chinese-speaking buyer check before contracting?

For a professional buying off-the-plan from abroad, the documents to nail before contracting are as follows. The difference between the Japanese deposit (a cancellation deposit) and China's "dingjin" is set out at contract clauses a Chinese-speaking buyer tends to misread.

Document	What to check
Important-matters statement (Art. 35)	The outline of the deposit-security measure (method, guarantor, amount). Registered rights, statutory restrictions, private-road burden, supply facilities
Sale contract (Art. 37 document)	Amounts and timing of deposit/interim/balance. Timing of delivery and registration. Non-conformity liability
Guarantee certificate / insurance policy for the security	Whether the name, covered amount and term of the guarantee/insurance/trust cover the amounts and timing of payment
How the important-matters explanation / IT jūsetsu is conducted	Whether it can be received online without coming to Japan (IT jūsetsu requirements)
Timing of receiving deposits vs. the security	Whether receipt of deposits above the threshold comes after the security is provided

Have a question about your situation?

Tell us about your property search or plans to sell.

Chat on LINEContact us

"Whether the security was provided before payment" in particular can be confirmed from the dates on the documents. Deposits above the threshold must not be paid in advance without a security measure. The important-matters explanation can be received online (IT jūsetsu), and an overseas buyer may proceed to contract without coming to Japan. For the identity-check and signature-certificate arrangements, see the IT-jūsetsu article. Business and investment property in general is at investment and business real estate.

Who should you consult on registration, tax and overseas remittance?

In an off-the-plan purchase, what the real estate agent handles and what is passed to other professionals are separate.

What to do	Who
Important-matters explanation, confirming the security, brokerage, sale contract	Real estate agent (our transaction specialist)
Preparation of the foreign-language translation of the contract and important-matters statement	Administrative scrivener
Ownership-transfer registration / (for a new build) ownership-preservation registration	Judicial scrivener
Tax on acquisition, holding and transfer (registration/license tax, real estate acquisition tax, fixed-asset tax, capital-gains tax, etc.)	Tax accountant
Whether a Foreign Exchange Act report is required; remittance from abroad	The buyer / handling bank (confirm the need with a professional)

What we do stops at property investigation, brokerage, the important-matters explanation and sale contract, and confirming that a security measure has been provided. Registration goes to the judicial scrivener, tax to the tax accountant, and preparing the translation to the administrative scrivener — each engaged by you directly. Whether a Foreign Exchange Act report is required when a non-resident acquires and holds Japanese property, and overseas remittance, vary with the nature of the transaction, so confirm with the buyer, the handling bank and, as needed, a professional. The key points of the important-matters explanation when a non-resident is the buyer are set out at key points of the important-matters explanation before introducing a Japanese income property to a Chinese-speaking buyer.

Frequently asked questions

Q. If I paid a deposit in aota-uri and the seller goes bankrupt, does it come back?
A. If a security measure has been provided, refund is pursued according to its method (a bank guarantee-commission/guarantee-insurance, or for completed property a designated-custodian trust). Uncompleted property before completion is under Real Estate Brokerage Act Art. 41, completed property under Art. 41-2. However, when the deposits are 5% or less of the price and 10 million yen or less (uncompleted), or 10% or less and 10 million yen or less (completed), they are within the range receivable without a security measure to begin with. Confirm before contracting that deposits above the threshold have not been received without a security measure.

Q. How does the method of security differ between uncompleted and completed property?
A. For uncompleted property (Art. 41), only two are available: (1) a guarantee-commission contract with a bank etc. and (2) a guarantee-insurance contract with an insurer. For completed property (Art. 41-2), in addition to these two, (3) a deposit trust contract with a designated custodian is available. So in aota-uri (uncompleted), the third-party-held trust type is unavailable, and the refund obligation is secured by a bank guarantee or insurance. Which method it is can be confirmed in the important-matters statement (Art. 35).

Q. The buyer is also an overseas real estate company — do we get the same protection?
A. No. The measure to secure deposits is a self-sale restriction that works when the seller is a real estate agent and the buyer is not (Real Estate Brokerage Act Art. 78(2)). Where the buyer is itself a (Japanese) real estate agent, this restriction does not apply. How it is treated when an overseas real estate company buys as an individual depends on the substance of the transaction, so confirm with the transaction specialist before contracting.

Q. Where can I see whether the deposits are secured?
A. The "outline of the deposit-security measure" is stated in the important-matters statement (Real Estate Brokerage Act Art. 35) and explained by the transaction specialist before contracting. In addition, confirm the name, covered amount and term on the documents backing the security — the guarantee certificate under a guarantee-commission contract, the insurance policy for guarantee-insurance, the trust-contract document. Also confirm (from the document dates) whether receipt of deposits above the threshold comes after the security has been provided.

Sources (primary)

• e-Gov "宅地建物取引業法" (Real Estate Brokerage Act) — Act No. 176 of 1952. Art. 41 (measures to secure deposits where the agent is the seller in a sale of land/building before completion of construction — a bank guarantee-commission contract / an insurer's guarantee-insurance contract — and the definition of "deposits"); Art. 41-2 (measures for property after completion — the above two plus a deposit trust contract with a designated custodian); Art. 35 (important-matters explanation, including the outline of the deposit-security measure); Art. 37 (contract-conclusion document); Art. 78(2) (application of the self-sale restriction, except where the buyer is a real estate agent). Accessed 29 September 2026.
• e-Gov "宅地建物取引業法施行令" (Real Estate Brokerage Act Enforcement Order) — Cabinet Order No. 383 of 1964. The standard for the amount of deposits not requiring a security measure (the amount set by Cabinet Order = 10 million yen); judged together with 5% or less of the price (uncompleted) and 10% or less (completed). Accessed 29 September 2026.
• MLIT, "Interpretation and operation of the Real Estate Brokerage Act" — the operational thinking on the Art. 41 / Art. 41-2 deposit-security measures and the Art. 35 important-matters explanation. Accessed 29 September 2026.

Whether a deposit-security measure is required, its method and the threshold amount vary with whether the property is before or after completion, the payment schedule and the price. At the outset, confirm directly the outline of the security stated in the important-matters statement and the backing documents. Whether a Foreign Exchange Act report is required and the overseas-remittance procedure vary with the nature of the transaction and the parties' residence and nationality; confirm with the buyer, the handling bank and a professional. This article is general information; it does not judge or guarantee the feasibility of any particular transaction, the sufficiency of a security measure, or tax/foreign-exchange treatment. Make the final confirmation with the transaction specialist, judicial scrivener, tax accountant and handling bank. The important-matters explanation, confirming the security, brokerage and sale contract are undertaken by Yotsuba Real Estate Co., Ltd. (licensed real estate agent); the foreign-language translation by Yotsuba Administrative Scrivener Office; registration by a judicial scrivener; tax by a tax accountant — independent business entities, engaged separately and directly. We neither pay nor accept referral fees.

About the author

Joji Uramatsu — licensed real estate transaction specialist (Tokyo Governor registration No. 293544) and administrative scrivener (registration No. 25087022). Representative Director, Yotsuba Real Estate Co., Ltd. (licensed real estate agent, Tokyo Governor (1) No. 113304); principal, Yotsuba Administrative Scrivener Office. Kohinata, Bunkyo, Tokyo, about five minutes' walk from Myogadani station. Property and paperwork are put on the same table. Full profile: author page.