Cases not to emulate
Case 1. Mistake with bidding price
The most troublesome mistake is an erroneous addition of zero. When you meant to write 5.5 million yen, you instead wrote 55 million yen. It’s ten times your intended bid, so you should certainly win the auction.
Nonetheless, you need not pay the entire 55 million yen. You may forfeit the guarantee deposit and bail out. If the base bid price were 4 million yen, you would only give up 800,000 yen; and that’s the end of the matter.
Until four years ago there were provisions penalizing the failure to make the full payment by the exclusions from subsequent foreclosure auctions for three years. But such provisions were eliminated in the revisions to the Civil Execution Act.
You must, however, eliminate such a mistake, by making a copy of the bid and checking the price several times. The fundamental is important in any work. In addition, you should also take care that the number of the price is only numbers, and comma, and does not end with a hyphen or period, which would make your bid void. You should follow the instruction carefully, make a copy, and verify later to make sure.
Case 2. Trouble with the possessors
Some auctioned properties have possessors while others don’t. Some apartments often do not have any occupants nor any personal properties inside. With such vacant properties, you may show the locksmith the registration and your identification, have a witness verify that the premise is empty, and obtain the possession of the property.
Rarely there are occupants who refuse to vacate the premise, speak harshly, and even threaten. One thing you must not do is to speak reasonably with them and to resolve the matter with money. You need not talk to them at all. According to law you must carry out the eviction order to the compulsory execution one after the other. In practice, enforcement officers appointed by the court provide assistance. Laws have changed from protecting renters to supporting the rights of buyers, so enforcement officers are on the side of buyers. Occupants who try to directly contact the buyer and make unreasonable claims call for additional counter-measures, such as consulting the police in the property’s area. You should tell the police that the property was foreclosed and auctioned, the case number, and documents such as the receipt to verify that the you are the buyer. Then the police should contact the occupants.
The crime of obstructing a compulsory execution carries a maximum sentence of two years in prison, so the occupants should change their behavior. If similarly approached, you should immediately contact the police, which is the strength that backs up the buyers; so there is nothing to fear.
Case 3. Cannot attract tenants
After winning the bid and acquiring the property, obtaining the possession, and refurbishing the property, not being able to attract tenants would be a big headache. Complaining does not help. Three major reasons for not being able to lease are the real estate brokers not knowing about the property, the quality of the property is subpar in the area’s rental market, and the high rent. In some cases, all three may apply.
To improve the situation, you should ask a number of agents to look at the property and listen to what they have to say. You must not argue back which would only silence them and put the property out of their markets. Utilizing brokers and lowering the rent to the market level, there should be more prospective renters interested in the property. At first you should be patient, and try to build constructive relationships with brokers.