How do you check the legal compliance of an income building without an inspection certificate? Pre-acquisition due diligence for overseas property professionals

In short: an income building without an inspection certificate can still be traded, but you need to check its legal compliance (conformity with the Building Standards Act) before acquiring. The inspection certificate is proof of passing the completion inspection (Building Standards Act Article 7); its absence does not itself mean illegality. A building that was lawful when built and later ceased to meet current rules through a legal amendment is "existing-nonconforming" (Article 3(2)) — lawful — and is a different thing from a "code-violating building" that broke the law when built. To tell them apart: with an inspection certificate the legality at completion can be presumed; without one, you confirm through a legal-compliance-status survey (the Ministry's current-condition survey guideline). The real estate side goes as far as providing the property information and the approach to the compliance survey.

This article is for property and asset-management professionals in China and Taiwan who introduce Japanese single-building income real estate to their clients. Before recommending a Japanese income building to an investor from the Chinese-speaking world, how do you, as a professional, verify "is that building lawful?" — taking the presence or absence of an inspection certificate as the entry point, we set out the approach to pre-acquisition due diligence from the statutes and public materials. Whether an individual property is lawful is finally judged by an architect and a designated confirmation inspection agency; this article shows how to run the survey.

Why does an income building without an inspection certificate become a problem in a transaction?

Because it may stumble on future expansion, change of use, and financing, and the cost of proving legal compliance falls on the buyer.

Japan's building confirmation and inspection are two-stage. Before work starts, the "building confirmation" examines whether the plan meets the standards (Building Standards Act Articles 6 and 6-2); after completion, the "completion inspection" checks whether the actual building matches the confirmation (Articles 7 and 7-2). Passing the completion inspection means an inspection certificate is issued. A building without one has not passed (or not undergone) the completion inspection, so it cannot show by a public document that it conformed to the standards at completion.

Stage	What is checked	Basis	Document issued
Building confirmation	Before work, whether the plan conforms	Building Standards Act Arts. 6 & 6-2	Confirmation certificate
Completion inspection	After completion, whether the building matches the confirmation	Building Standards Act Arts. 7 & 7-2	Inspection certificate

Further, special buildings above a certain scale cannot be used until the inspection certificate is issued (Article 7-6; with a provisional-use approval exception). An income building (shop, office, apartment building, etc.) is often such a special building, so the absence of the certificate works against use, expansion, change of use, and a lender's screening. Because the time and cost of correcting or proving compliance after acquisition ultimately feed back into the price, checking legal compliance before acquiring is the foundation of the investment judgment. The important points for explaining to a Chinese-speaking buyer are set out in key points of the important-matters explanation before introducing a Japanese income property to a Chinese-speaking buyer.

How do you tell existing-nonconforming from a code-violating building?

They divide on "was it lawful when built." What was lawful is existing-nonconforming; what was not is a code-violating building.

Article 3, paragraph 2 of the Building Standards Act (Act No. 201 of 1950) provides that where a building exists at the time a law or ordinance comes into or applies, the new rule does not apply to the part that does not conform. This is existing-nonconforming — a building that was lawful when built and later ceased to meet current standards through an amendment. Existing-nonconforming is not illegal. It can go on being used, though conformity with current standards may be required when it is expanded.

A code-violating building, on the other hand — built without a confirmation, built differently from the confirmation, or expanded again and again without a completion inspection — has been against the law since it was built. It is subject to a correction order and a use restriction, and is a major obstacle to financing and sale.

Category	When built	Current law	Legality	Treatment in a transaction
Existing-nonconforming	Lawful	Partly nonconforming	Lawful (Art. 3(2))	Conformity with current standards may be required on expansion
Code-violating	Unlawful	Unlawful	Unlawful	Subject to correction order / use restriction; correction presumed

The clues to telling them apart are documents. With an inspection certificate, legality at completion can be presumed; where there is a confirmation certificate but no inspection certificate, "was it completed as confirmed" is a blank. For a building without an inspection certificate, there is a route of confirming the legality at construction through a legal-compliance-status survey by an architect or a designated confirmation inspection agency. The Ministry of Land, Infrastructure, Transport and Tourism formerly issued the "Guideline for a Building Standards Act compliance-status survey using a designated confirmation inspection agency for buildings without an inspection certificate" (July 2014), but from 1 April 2025 this was consolidated into the "Current-Condition Survey Guideline for Existing Buildings." Combining a cross-check of drawings and records (document survey) with an on-site survey, an architect examines the state of conformity.

What should be confirmed in the important-matters explanation?

In addition to the registered rights and the statutory restrictions, confirm the history of building confirmation and inspection, including the inspection certificate.

Article 35 of the Real Estate Brokerage Act (Act No. 176 of 1952) obliges a real estate broker, before the contract, to have a real estate transaction specialist explain the important matters in writing (including electromagnetic means). In pre-acquisition due diligence of an income building, these points are cross-checked.

Point to confirm	Content
History of confirmation and inspection	Presence of confirmation and inspection certificates; obtaining a certificate of matters entered in the confirmation register
Statutory restrictions	Use-zone, building coverage and floor-area ratios, existence of existing-nonconforming
Consistency with the current state	Agreement between drawings / confirmation content and the actual building (any expansion or change of use)
Lease situation	Existing leases, deposits, rent; transfer of the lessor's position
Prospect of correction	If there is a violation, the feasibility, cost, and time of correction

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The presence of the inspection certificate is included in the important-matters explanation, and the record of confirmation and inspection can be cross-checked with a certificate of matters entered in the confirmation register (issued by the designated administrative agency). Discrepancies such as "there is a confirmation certificate but no inspection certificate" or "there is no confirmation record for the expanded part" can be found by cross-checking documents. How a professional Chinese-speaking buyer is treated in the transaction-time verification under the Act on Prevention of Transfer of Criminal Proceeds is set out in transaction-time verification of a non-resident Chinese-speaking buyer; the pitfalls in sale-contract clauses in clauses a Chinese-speaking buyer tends to misunderstand in a Japanese sale contract. For the view on a certificate-less property premised on conversion to welfare use, see Can a used property without an inspection certificate be converted to a welfare facility.

Who does correction, registration, and tax go to? (sorting the referrals)

The real estate side goes as far as providing property information and the approach to the compliance survey. From there, you engage each professional separately.

Role	Who
Providing property information; organizing the approach to the compliance survey; important-matters explanation; brokerage	Yotsuba Real Estate Co., Ltd. (licensed real estate agent, Tokyo Governor (1) No. 113304)
Legal-compliance-status / current-condition survey; design and building confirmation for correction	Architect / designated confirmation inspection agency
Transfer-of-ownership registration	Judicial scrivener
Post-acquisition tax; non-resident withholding and filing; tax agent	Licensed tax accountant
Contract disputes	Attorney

Yotsuba Real Estate Co., Ltd. and Yotsuba Administrative Scrivener Office are two independent business entities, engaged separately and directly by you. We neither pay nor accept referral fees or introduction commissions. The architect, designated confirmation inspection agency, judicial scrivener, tax accountant, and attorney are each engaged by you directly as well. Consultation on post-acquisition investment operation and leasing is taken from consulting on business and investment property. Consultation is free.

Frequently asked questions

Q. Can an income building without an inspection certificate simply not be bought?
A. It can be bought. The absence of the certificate does not itself bar a transaction. But because legality at completion cannot be shown by a public document, it can be a disadvantage in expansion, change of use, and financing. It is the practice to check legal compliance before acquiring, through a legal-compliance-status survey (the Ministry's current-condition survey guideline), and to build it into the price and schedule. The final judgment on feasibility and cost is for an architect.

Q. It was explained as "existing-nonconforming." Is it not illegal?
A. It is not illegal. Existing-nonconforming (Building Standards Act Article 3(2)) is a building that was lawful when built and later ceased to meet current standards through an amendment; it can go on being used. Conformity with current standards may, though, be required when it is expanded. Because it is a different thing from a "code-violating building" that has been in violation since it was built, confirm from the documents which of the two it is.

Q. Even without an inspection certificate, can I expand or change the use?
A. In some cases yes, but you must first check the legality at construction. For a building without an inspection certificate, after proving legality through a legal-compliance-status survey (current-condition survey) by an architect or a designated confirmation inspection agency, you proceed to the confirmation application for the expansion or change of use. The feasibility, cost, and time vary by building, so confirm individually with an architect.

Q. Can a buyer who is overseas still run the compliance survey?
A. They can. Document surveys of the confirmation and inspection certificates and the certificate of matters entered in the confirmation register can begin without being on site, and the on-site survey is done by an architect or a designated confirmation inspection agency. In a non-resident acquisition, tax and procedural matters overlap — reporting under the Foreign Exchange Act, withholding on rent, the final tax return, a tax agent — so consult a licensed tax accountant on tax and us on the contract, each directly.

Sources (primary)

• e-Gov, "Building Standards Act" — Act No. 201 of 1950. Art. 3(2) (existing-nonconforming); Arts. 6 & 6-2 (building confirmation); Arts. 7 & 7-2 (completion inspection, inspection certificate); Art. 7-6 (use restriction until the inspection certificate is issued). Accessed 19 September 2026.
• e-Gov, "Real Estate Brokerage Act" — Act No. 176 of 1952. Art. 35 (explanation of important matters). Accessed 19 September 2026.
• MLIT, "Current-Condition Survey Guideline for Existing Buildings" (promotion of the use of existing buildings) — in operation from 1 April 2025 (Reiwa 7); consolidating the former "Guideline for a Building Standards Act compliance-status survey using a designated confirmation inspection agency for buildings without an inspection certificate" (July 2014). Procedure for surveying conformity with the Building Standards Act on expansion, reconstruction, relocation, or major repair/renovation of an existing building. 4th edition = March 2026. Accessed 19 September 2026.

Whether there is an inspection certificate, whether a building is existing-nonconforming or code-violating, and whether a legal-compliance-status (current-condition) survey is required or feasible, vary by property with the building's date of construction, the confirmation/inspection history, and the current state. The final judgment on legality is for an architect and a designated confirmation inspection agency; this article asserts no uniform feasibility. The Ministry's guideline has been revised and consolidated; check the latest name, edition, and operation on the Ministry's official page. This article is based on the content published as of 19 September 2026. This article is general information and does not offer a legal determination. The legal-compliance-status survey and the building confirmation for correction are carried out by an architect / designated confirmation inspection agency; the transfer-of-ownership registration by a judicial scrivener; post-acquisition tax by a licensed tax accountant; and contract disputes by an attorney. Providing property information, the important-matters explanation, and brokerage of the sale contract are undertaken by Yotsuba Real Estate Co., Ltd. (licensed real estate agent), and the preparation of licensing documents by Yotsuba Administrative Scrivener Office — two 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. For Japanese income real estate, the confirmation and inspection history, registration, and tax go on the same table. Full profile: author page.