Lease of a Plot of Land

When a plot of land, situated in a block of buildings in an area subject to local detail plan and entered into the cadastre is granted for residential purposes pursuant to rights of a plot lease, it is treated as a lease of a plot of land. The same applies to a building site in an area subject to a building plan, as enforced pursuant to the now repealed Building Act and currently regarded as a local detail plan, that is separated as an independent estate and granted for residential purposes pursuant to rights of a plot lease.

Leases of plots of land are subject to the general provisions of the Tenancy Act, as well as a number of special provisions, some of which are set out below.

The agreement for lease of a plot of land shall mention that the lease is concluded in accordance with the rights of a plot lease. The agreement must be concluded for a fixed-term of no less than 30 years and no more than100 years. In the absence of an agreement, the tenancy is deemed to be in force for 30 years.

The tenancy shall be transferable without the landlord’s consent. The right of transfer cannot be restricted in the agreement.

The tenancy shall include present and future buildings on the plot of land as well as trees and bushes. Certain machinery and wiring, as defined in the Act are, however, excluded.

The landlord is entitled to compensation for buildings etc. that were situated on the land as of the entry into force of the lease agreement and acquired by the tenant.

It is important to note that an agreement regarding lease of a plot of land must be registered, or else the agreement will lapse. Either the tenant or the landlord must apply for registration within a month of the signature of the lease agreement. A lease agreement regarding a plot of land shall be registered by applying for registration of the tenancy based on such agreement in accordance with the provisions of the Code of Real Estate concerning registration of special rights to land. The application for registration must be filed in writing with the district survey office of the location of the plot of land. It is possible to take out a mortgage over a registered tenancy to a plot of land.

Upon termination of the lease and subject to certain exceptions, the landlord is required to redeem buildings etc. situated on the plot which are to be acquired by the landlord.