Nomura Real Estate Solutions is Accused of Sloppy Contracts and Compliance Violations
The company did not provide an "explanation of important matters" and almost signed a mysterious outsourcing contract worth 850 million yen. There was a big trouble over the purchase and sale of a building in front of Akihabara Station.
“I decided to buy the building they recommended because I trusted the ‘Nomura Real Estate’ brand. I can’t believe that a big company like Nomura would act like a fraud.”
Mr. A, who runs a real estate company in Tokyo, said, “The building that triggered the trial over the contract was torn down. Also, a hotel owned by Nomura Real Estate Development Co. Nomura Real Estate Solutions, a subsidiary of Nomura Real Estate Holdings, Inc. whose main business is real estate brokerage, is currently in the middle of a swampy trial over a building in front of Akihabara Station.” When this magazine requested an interview with Mr. A, who is fighting Nomura Real Estate Solutions in court, he expressed his anger as follows.
In April 2004, Mr. A was introduced to a building in front of Akihabara Station by the manager of the Hiroo Center of Nomura Real Estate Solutions (then called Nomura Real Estate Urban Net). The building was a nine-story building and the sale price was 1,304.7 million yen.
“I decided to buy it because it was in a good location and I was willing to pay 1.3 billion yen for a vacant building where all the tenants had moved out. I thought that if I remodeled it into a hotel, it would become a business,” said Mr. A.
Nomura Real Estate Solutions, which concluded an intermediary agreement with Mr. A, acted as his broker, and a purchase agreement was concluded in June of the same year. Mr. A trusted Nomura Real Estate Solutions, which said, “Only one tenant will remain, but the other tenants will be evicted on the seller’s responsibility,” and signed the contract.
The head of the Nomura Real Estate Solutions Center told him, “The eviction of the remaining tenants will be outsourced to a company called Company C. The center manager of Nomura Real Estate Solutions asked us to sign an outsourcing contract for 850 million yen with the said company. The center manager’s subordinate also pressured me via a short e-mail, saying, ‘If you don’t sign the outsourcing contract by the end of today, the main contract will flow.” I thought it was strange to be rushed into a contract, so I declined the offer,” said Mr. A.
Then the situation suddenly changed. The center manager’s subordinate contacted him and informed him that the building had been sold to a third party.
“I was stunned and couldn’t say anything. Nomura Real Estate Solutions had rushed the contract through, and then proceeded to sign a purchase agreement with another company. Nomura’s outrage did not end there. They sued us, demanding payment of the broker’s commission, saying, ‘Although the sale was not completed, we have the right to demand the broker’s fee.”
Mr. A lost the case at the first trial, but he appealed, saying, ‘I can’t accept it”. When the contract was re-examined, two defects were found in the sales contract that Nomura Real Estate Solutions had rushed him into signing. The contract was not explained in detail and the “Article 37 document” was not issued.
Kenichi Iwayama, a first-class architect and construction journalist familiar with the Building Lots and Buildings Transaction Law, explains.
“The broker reads out the “Statement of Important Matters” to the buyer at the conclusion of the sales contract, and the contract must be concluded in accordance with this. The Article 37 document is a document that describes the contents of the contract, and the registered real estate broker is obligated to promptly deliver it to the buyer after the sales contract is concluded. In this case, both of these requirements were omitted, which is extremely malicious.”
A surprising fact was also discovered about the “850 million yen outsourcing contract,” which was initially pressed by Nomura Real Estate Solutions. The person whom the center manager introduced to Mr. A as “a contractor contracted by the seller to handle the eviction of tenants” had nothing to do with the seller.
Mr. Iwayama continues.
“We have never heard of a case where the contract would be canceled if the tenant did not pay the “outsourcing fee” for vacating the property. It is no wonder that they are suspected of making slush funds to cover the cost of eviction. It would not be surprising if they were stripped of their building contractor’s license.”
According to court documents, Nomura Real Estate Solutions admitted that there was a defect in the sales contract and offered to settle the case, but negotiations appear to have broken down.
What does Nomura Real Estate Solutions think about the allegations that Mr. A and others made saying there are slush funds and that the company violated the Building Lots and Buildings Transaction Business Law? The Corporate Planning Section of the Corporate Planning Department of Nomura Real Estate Solutions Co.’s answer is,
“We will refrain from giving a response due to pending disputes.”
When we called the manager of the Hiroo Center of Nomura Real Estate Solutions, the company that had facilitated the contract, to ask about the matter, he was unresponsive, saying, “We are in the midst of a trial, so I am unable to discuss the matter with you.”
“I have no intention of forgiving unless there is a satisfactory response.” Mr. A is determined to thoroughly pursue the dark side of one of Japan’s largest corporations, Nomura Real Estate Development Co.
From the June 17, 2022 issue of “FRIDAY
PHOTO： Shinji Hasuo (1st photo)
