Housing Problems: Prevent Real Estate Firms from Targeting Elderly, Forcing Home Sales

Editorial

14:29 JST, June 22, 2025

With real estate prices soaring, unscrupulous businesses have in many instances forced elderly people to sell their homes. The government must quickly take measures to address this issue.

There have been many disputes due to leaseback contracts, under which homeowners sell their property to real estate companies and use the proceeds as rent to continue living in their home. According to the National Consumer Affairs Center of Japan, it received 239 requests for consultation on this issue last fiscal year, 10 times more requests than it saw five years ago.

In one case, a woman in her 70s, facing financial difficulties, sold her condominium unit to a real estate agent for ¥16 million on the condition that she could continue living there for ¥60,000 per month in rent. However, the rent was suddenly raised to ¥110,000, and she said she was pressured to move out if she could not pay.

In another instance, a person was persistently pushed to sign a contract and charged a ¥6 million penalty when they sought to cancel the contract later. In other cases, homeowners were forced to sell their homes at prices far below the market rate.

Most of the people who sought consultations at the center were elderly people with a diminished ability to make judgments. Real estate prices are rising, particularly in urban areas. Businesses seem to be using slick words to purchase homes and resell them at higher prices for a profit. Such unscrupulous business practices targeting the vulnerable cannot be overlooked.

The leaseback system itself is not inherently problematic. Use of the system has been expanding, such as in cases in which homeowners looking to move into care facilities want to sell off their homes to raise the funds they need while continuing to live at home until a spot for them opens up.

The problem lies in how some companies repeatedly make aggressive solicitations. During the COVID-19 pandemic, it seems there was an increase in cases in which companies approached isolated elderly people and proposed buying their home.

It is said that these unscrupulous companies often do not properly explain the terms of the contracts, such as the duration of the lease after the sale, rent increases and penalties for canceling.

It is not uncommon for elderly people to sign contracts without fully understanding these terms. In some cases, relatives living elsewhere have trouble detecting the sale because the elderly individual continues to live in the same home.

The government needs to establish specific guidelines on what companies need to explain before a contract is signed and how to prevent disputes over the way in which firms understand customer intentions. Real estate industry groups should also create rules proscribing unscrupulous solicitation.

In the insurance industry, the Financial Services Agency has presented guidelines for when companies sell to elderly people, requiring that family members be present, discussions be recorded and sufficient time be given for consideration. Such measures could serve as a reference.

For an elderly person, it is a major blow to lose the home they have grown accustomed to. Family members and others around the elderly should be on the lookout for any unusual changes.

(From The Yomiuri Shimbun, June 22, 2025)