How do you sell an inherited sectioned-ownership office (a single tenanted unit)? Succession of the lease and the practicalities of the management association

In short: an inherited, tenanted sectioned-ownership office (a single tenanted unit) is succeeded by the heirs together with the landlord's position (Article 896 of the Civil Code). When you sell, the landlord's position moves to the buyer, and an ownership-transfer registration is needed to assert it against the tenant (Article 605-2 of the Civil Code). Before selling, the three points to check are whether the management rules allow business use, whether there are unpaid management fees or repair reserves, and the content of the tenant's lease. Buyers are more limited than for a residential condo, and price tends to be set by rent (yield). As a premise for selling, complete the inheritance registration (compulsory since April 2024) first.

You have inherited a tenanted sectioned-ownership office or a single shop unit from a parent — set out thinking of it as a residential condo and you stumble on the lease with the tenant, the management association, and the fact that it is fundamentally a hard-to-sell asset class. This is for those who have inherited a sectioned-ownership business office or a single shop unit (tenanted), setting out what to check before selling and whom to consult, from the Civil Code, the Sectioned Ownership Act and the Real Property Registration Act. Yotsuba Real Estate Co., Ltd. handles the sale process, the appraisal and the buyer search as information provision; the legal judgment is made by qualified professionals.

How does an inherited sectioned office differ from a residential condo?

The building-sectioned-ownership framework is the same, but being business-use changes the practice. The buyer pool, the management rules, the nature of the lease (tenant) and the liquidity all become different from a residence.

A sectioned-ownership office is, like a residential condo, subject to the Act on Building Unit Ownership, etc. (the Sectioned Ownership Act). You own the exclusive portion (one unit), share the common portions (corridors, elevator, external walls) with other unit owners, and become a member of the management association — the structure is the same. The differences are these.

Point	Residential condo	Sectioned office (business unit)
Lessee	Resident (the strong protection of the Land and Building Lease Act)	Tenant (a business). In principle also under the Land and Building Lease Act
Management rules	Residential-only is common	Business use possible — confirm whether there is a use restriction
Buyer	End-user (own home) plus investors	Tends to be limited to a business using it itself, or an investor
How price is set	Market rate and area are the axes	Rent (yield) tends to be the axis

So treat a sectioned office as "the sectioned-ownership framework = same as a residence / the substance = business-use and different." How to sell inherited property in general is in inheritance and real estate; how to sell jointly-owned property in Selling inherited jointly-owned real estate.

How is the tenant's lease succeeded on inheritance?

The heirs take over the landlord's (owner's) position as it is. Under Article 896 of the Civil Code the heirs succeed to all rights and duties that belonged to the decedent's estate, so the lease with the tenant, the position to receive rent and the duty to return the deposit all pass to the heirs as a matter of course.

Inheritance is "universal succession." Unlike a sale, where ownership is freshly transferred (the transfer of the landlord's position under Article 605-2 of the Civil Code), on inheritance the decedent's position passes to the heirs as a matter of course, so the landlord is replaced by the heirs without notice to the tenant or registration. In practice, pin down the following.

Item to confirm	Why confirm it
The lease agreement / memoranda	Rent, term, renewal, restoration, mid-term termination conditions. Ordinary lease or fixed-term lease
Amount and holding of the deposit / guarantee money	On sale the deposit-return duty also passes to the buyer, so fix the amount
Rent-payment account and any arrears	Name change, and response after succession if there are arrears
Whether there are multiple heirs	Until the estate is divided, the rent claim is split among the heirs (a co-ownership state)

If several people inherit and the division is not yet done, co-ownership rules bite on how rent is handled and on consent to sell. How to sell jointly-owned property is in Selling inherited jointly-owned real estate; succession of the landlord's position and of sublease is in How the position under a sublease (master lease) is succeeded on inheritance.

What do you confirm with the management association before selling?

Three things: the management rules, the state of the management fees and repair reserves, and the plan for major repairs. In sectioned ownership these bear directly on saleability and price.

The Sectioned Ownership Act provides that claims for management fees, repair reserves and the like also take effect against a specific successor (the buyer) (Articles 8 and 7 of the Act). So if the previous owner has arrears, the buyer may take over the duty to pay, which becomes an obstacle to the sale. The points to confirm with the management association (the management company) before selling are these.

Item to confirm	Point to see
Management rules / use rules	Whether business use is allowed, use restrictions, constraints on tenant operations
Management fees / repair reserves	The monthly amount and any arrears. Arrears may pass to the buyer (Art. 8)
Repair-reserve balance / long-term repair plan	The plan for major repairs and any lump-sum levy. Affects price and the buyer's judgment
Resolutions of the general meeting / planned rule changes	Whether decisions on use or costs are advancing

These can be confirmed in writing (an investigation report on important matters, etc.) by asking the association's management company. Because a sale explains these to the buyer in the important-matters explanation under Article 35 of the Real Estate Brokerage Act, the selling side too should assemble the current state of management fees, etc. early for a smooth process.

Is a sectioned office hard to sell? How is the price set?

Because buyers are more limited than for a residence, liquidity is generally lower. If tenanted, the price is anchored on the yield back-calculated from rent (income capitalisation); if vacant, it is set by the demand of businesses considering using it themselves.

The buyer of a single sectioned-office unit tends, in practice, to narrow to "a business wanting its own office in that location" or "an investor wanting rental income." Unlike a whole office building, you cannot control the running of the entire building and are bound by the management association's consent, so investors tend to price cautiously. How to view price is as follows.

Situation	Main way price is set
Tenanted (with a tenant)	Back-calculated by yield from rent and occupancy (income capitalisation). The tenant's credit and remaining term also matter
Vacant	The demand of businesses considering using it themselves, and the surrounding rent market and comparable deals
State of management / repairs	The repair-reserve balance, arrears and long-term repair plan are reflected in price

Whether you "sell tenanted (owner change)" or "sell after the tenant leaves" also changes the buyer pool and price. For the steps to sell by owner change, Selling by owner change a property whose owner became an overseas heir is also a reference. We can guide the appraisal and a comparison of ways to sell.

Whom do you consult for registration, tax and disputes?

The inheritance and sale of a sectioned office involve several professionals. Dividing the roles, it is as follows.

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To sell or change the name, the registration must have fixed whose name the property is in. Property acquired by inheritance must first go through inheritance registration (name change from the decedent to the heirs). Article 76-2 of the Real Property Registration Act requires an heir who acquires property by inheritance to apply for inheritance registration within three years from the day they know both that the inheritance has commenced for them and that they have acquired the ownership (in force 1 April 2024). Neglect without justifiable reason may attract a non-penal fine.

Matter	Party
The sale process, appraisal, buyer search, brokerage, sale contract	Real estate transaction operator (Yotsuba Real Estate Co., Ltd.)
Preparation of the estate-division agreement	Administrative scrivener (Yotsuba Administrative Scrivener Office)
Inheritance registration and ownership-transfer registration	Judicial scrivener
Inheritance-tax valuation, capital-gains tax, acquisition-cost calculation	Licensed tax accountant
Rent arrears, eviction, disputes with the tenant	Attorney

On a sale, the landlord's position moves to the buyer (Article 605-2, paragraph 1 of the Civil Code), and an ownership-transfer registration is needed to assert it against the tenant (paragraph 3). The deposit-return duty also passes to the buyer (paragraph 4). The calculation and filing of capital gains (sale price minus acquisition cost and transfer expenses) are handled by a licensed tax accountant.

Who should you consult?

The sale process, appraisal, buyer search, brokerage and sale contract for a sectioned-ownership office are undertaken by Yotsuba Real Estate Co., Ltd. (licensed real estate agent, Tokyo Governor (1) No. 113304). Preparation of documents submitted to public offices or between private parties, such as the estate-division agreement, is undertaken by Yotsuba Administrative Scrivener Office. Inheritance registration and ownership-transfer registration are for a judicial scrivener, inheritance-tax valuation and capital-gains tax for a licensed tax accountant, and rent arrears or eviction and other disputes with the tenant for an attorney.

These are each independent business entities. You engage each directly. We neither accept nor pay referral fees or introduction commissions. Registration is for a judicial scrivener, tax for a licensed tax accountant, disputes for an attorney, and employment and social insurance for a labour and social security attorney (Yotsuba Labour and Social Security Attorney Office) — each engaged by you directly. Consultation is free of charge.

Frequently asked questions

Q. My inherited office has a tenant. What happens to the lease?
A. The heirs take over the landlord's (owner's) position as it is. Under Article 896 of the Civil Code the heirs succeed to all rights and duties that belonged to the decedent's estate, so the lease with the tenant, the position to receive rent and the duty to return the deposit all pass to the heirs as a matter of course. Because inheritance is universal succession, the landlord is replaced by the heirs without notice to the tenant or registration. Arrange the change of the rent-payment account, and the handling of rent where there are multiple heirs, together with the state of the estate division.

Q. If I sell, what happens to the tenant's lease and the deposit?
A. On sale, the landlord's position transfers to the buyer (Article 605-2, paragraph 1 of the Civil Code). To assert against the tenant that the buyer is the landlord, an ownership-transfer registration of the property is needed (paragraph 3). The duty to return the deposit also passes to the buyer (paragraph 4). Whether you sell tenanted (owner change) or after the tenant leaves changes the buyer pool and price, so proceed after confirming the contract content.

Q. If there are unpaid management fees or repair reserves, can it not be sold?
A. It is not that it cannot be sold, but care is needed. Under Articles 8 and 7 of the Sectioned Ownership Act, claims for management fees, repair reserves and the like extend to a specific successor (the buyer), so the buyer may take over the previous owner's arrears. Because this easily becomes an obstacle to the sale, the practice is to confirm any arrears with the management association (the management company) before selling and to settle them. The repair-reserve balance and the long-term repair plan also affect price.

Q. It is still in my deceased parent's name. What should I do first?
A. Before a sale or name change, you must complete inheritance registration (name change from the parent to the heirs). Inheritance registration became compulsory on 1 April 2024, and an application is required within three years from the day you know of the acquisition (Article 76-2 of the Real Property Registration Act). Inheritance registration and ownership-transfer registration are the work of a judicial scrivener. Preparation of the estate-division agreement is undertaken by an administrative scrivener. Consult a licensed tax accountant on inheritance-tax valuation and capital-gains tax.

Sources (primary)

• e-Gov "民法" (Civil Code) — Act No. 89 of 1896. Art. 605-2 (transfer of the landlord's position over real property — para. 1: where a lease with perfected requisites for perfection is in place and the property is transferred, the landlord's position moves to the transferee; para. 3: an ownership-transfer registration is needed to assert against the lessee; para. 4: succession of the deposit-return duty; codified by the obligation-law reform in force 1 April 2020); Art. 896 (general effect of inheritance — the heir succeeds, from the commencement of inheritance, to all rights and duties belonging to the decedent's estate, except rights personal to the decedent). Accessed 30 September 2026.
• e-Gov "建物の区分所有等に関する法律" (Act on Building Unit Ownership, etc.) — Act No. 69 of 1962. Exclusive and common portions, the management association, rules, the general meeting. Art. 7 (statutory lien); Art. 8 (liability of a specific successor — claims for management fees, repair reserves, etc. extend to the buyer). Accessed 30 September 2026.
• e-Gov "借地借家法" (Land and Building Lease Act) — Act No. 90 of 1991. Perfection, renewal and limits on termination of building leases. Applies to business-use building leases too. Accessed 30 September 2026.
• e-Gov "不動産登記法" (Real Property Registration Act) — Act No. 123 of 2004. Art. 76-2 (compulsory application for registration of transfer of ownership by inheritance; within three years of knowing of the acquisition; in force 1 April 2024). Accessed 30 September 2026.

Succession of the landlord's position, succession of management-fee arrears, sale price and whether an owner-change sale is possible vary with the individual contract content, management rules and the state of the estate division; this article makes no determination on an individual case. Consult an attorney on cases involving a dispute with the tenant. Consult a licensed tax accountant on the specific calculation and filing of inheritance-tax valuation, capital-gains tax and acquisition cost, and a judicial scrivener on inheritance registration and ownership-transfer registration. This article is general information and does not judge or guarantee the suitability of a particular sale or a tax amount. Property investigation, brokerage and the sale contract are undertaken by Yotsuba Real Estate Co., Ltd. (licensed real estate agent), and the preparation of documents such as the estate-division agreement by Yotsuba Administrative Scrivener Office, each as an independent business entity engaged separately. There are no referral or introduction 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. Placing the property (real estate) and the rights/procedures (the allocation of inheritance, registration and tax) on the same table to check them together. Full profile: author page.