Act on Building Unit Ownership

If an incorporated management association is unable to satisfy its obligations in full with its assets, the unit owners are liable for the performance of obligations in the same proportion as that specified in Article 14;provided, however, that if a proportion for sharing expenses prescribed in the proviso to Article 29, paragraph (1) has been specified, the unit owners' liability is to be in accordance with that proportion.

The provisions of the preceding paragraph also apply if enforcement against the assets of the incorporated management association does not prove to be effective.

The provisions of the preceding paragraph do not apply if the unit owners have proved that the incorporated management association has sufficient financial resources and that the execution can be easily performed.

A unit owner's specific successor has the same liability as that which the unit owner has pursuant to the preceding Article, even if it concerns obligations of the incorporated management association that arose before the succession.

An incorporated management association is dissolved on the following grounds:

the total destruction of the building (or, for an incorporated management association consisting of unit owners who should have common use of private common areas, the total destruction of those common areas);

the exclusively-owned areas in the building having ceased to exist; and

a resolution at a meeting.

A dissolved incorporated management association is deemed to continue to exist inasmuch as the purpose of liquidation is concerned, until the completion of the liquidation.

If an incorporated management association is dissolved, unless it is dissolved due to an order commencing bankruptcy proceedings, the director is to be the liquidator; provided, however, that this does not apply if otherwise provided for in the bylaws or if a person other than a director has been appointed at a meeting.

If there is no person to become a liquidator pursuant to the provisions of the preceding Article or if damage is likely to occur due to a vacancy in the office of liquidator, the court may appoint a liquidator at the request of an interested person or the public prosecutor, or by its own authority.

If there are material grounds, the court may dismiss a liquidator at the request of an interested person or the public prosecutor, or by its own authority.

The duties of a liquidator are as follows:

completion of pending affairs;

collection of claims and performance of obligations; and

delivery of residual assets.

A liquidator may engage in any and all acts necessary for the performance of the duties set forth in the items of the preceding paragraph.

Within two months from the day on which a liquidator takes office, the liquidator must demand that creditors file their claims within a stated period of time, by giving public notice on at least three occasions. In such a case, the stated period of time may not be shorter than two months.

The public notice set forth in the preceding paragraph must be accompanied by a supplementary note stating that if a creditor does not file a claim within the stated period the creditor will be excluded from the liquidation; provided, however, that the liquidator may not exclude any known creditor.

A liquidator must separately make a demand to each known creditor to file their claims.

The public notice referred to in paragraph (1) is given by publication in the Official Gazette.

A creditor who files a claim after the lapse of the period referred to in paragraph (1) of the preceding Article may only make a claim against the assets that have not been delivered to persons with vested rights, after all obligations of the incorporated management association have been fully performed.

If it becomes apparent during liquidation that the assets of an incorporated management association are insufficient for the full performance of its obligations, the liquidator must immediately file a petition to commence bankruptcy proceedings and give public notice to that effect.

If an incorporated management association under liquidation has become subject to an order commencing bankruptcy proceedings, the liquidator is considered to have completed their duties once the association's administrative affairs are transferred to a bankruptcy trustee.

In the case prescribed in the preceding paragraph, if the incorporated management association under liquidation has already paid any money to the creditors, or has delivered any assets to persons with vested rights, the bankruptcy trustee may retrieve that money or those assets.

The public notice pursuant to the provisions of paragraph (1) is given by publication in the Official Gazette.

The assets of a dissolved incorporated management association, unless otherwise provided for in the bylaws, are to vest in each unit owner in the same proportion as that specified in Article 14.

The dissolution and liquidation of an incorporated management association are subject to the supervision of the court.

The court, on its own authority, may conduct any inspection that is necessary for the supervision referred to in the preceding paragraph at any time.

Cases concerning the supervision of the dissolution and liquidation of an incorporated management association and cases concerning the liquidator are subject to the jurisdiction of the district court with jurisdiction in the locality of the incorporated management association's principal office.

No appeal may be entered against a judicial decision on the appointment of a liquidator.

If the court has appointed a liquidator pursuant to the provisions of Article 55-4, it may fix the amount of remuneration that the incorporated management association is to pay to the liquidator. In such a case, the court must hear statements from the liquidator and the auditor.

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The court may appoint an inspector for the purpose of having them carry out any investigation that is necessary for the supervision of the dissolution and liquidation of an incorporated management association.

The provisions of Article 56-4 and Article 56-5 apply mutatis mutandis if the court has appointed an inspector pursuant to the provisions of the preceding paragraph. In such a case, the term "the liquidator and the auditor" in that Article is deemed to be replaced with "the incorporated management association and the inspector".

If a unit owner has performed an act prescribed in Article 6, paragraph (1) or if a unit owner is likely to perform such an act, all of the other unit owners or the incorporated management association may request that the unit owner discontinue the act, remove the outcome of the act, or take necessary measures to prevent the act, for the common interest of the unit owners.

In order for an action to be filed based on the provisions of the preceding paragraph, the decision to file must be adopted as a meeting resolution.

Pursuant to a meeting resolution, a manager or a unit owner who has been designated at a meeting may file an action prescribed in the preceding paragraph on behalf of all of the other unit owners referred to in paragraph (1).

The provisions of the preceding three paragraphs apply mutatis mutandis if the possessor has performed an act set forth in Article 6, paragraph (1) as applied mutatis mutandis pursuant to paragraph (3) of that Article and if the possessor is likely to perform such an act.

In the case prescribed in paragraph (1) of the preceding Article, if the act specified in Article 6, paragraph (1) significantly impedes the unit owners' community life and if there is difficulty in removing the impediment and securing the use of the common area or maintaining the other unit owners' community life by making a request under the provisions of paragraph (1) of the preceding Article, all of the other unit owners or the incorporated management association, based on a meeting resolution, may file an action seeking to prohibit the unit owner involved in the act from using the exclusively-owned area for a reasonable period of time.

In order for the resolution referred to in paragraph (1) to be decided on, the relevant unit owner must be given the opportunity to give an explanation in advance.

The provisions of paragraph (3) of the preceding Article apply mutatis mutandis to the filing of an action as referred to in paragraph (1).

In the case prescribed in Article 57, paragraph (1), if the act prescribed in Article 6, paragraph (1) significantly impedes the unit owners' community life and if there is difficulty in removing the impediment and securing the use of the common area or maintaining the other unit owners' community life through other means, all of the other unit owners or the incorporated management association, based on a meeting resolution, may file an action seeking to auction off the unit ownership and the right to use the grounds held by the unit owner who is involved in the act.

The provisions of Article 57, paragraph (3) apply mutatis mutandis to the filing of an action referred to in the preceding paragraph, and the provisions of paragraph (2) and paragraph (3) of the preceding Article apply mutatis mutandis to the resolution referred to in the preceding paragraph.

A petition for an auction based on the judgment pursuant to the provisions of paragraph (1) may not be filed once six months have elapsed from the day on which the judgment has become final and binding.

In the auction referred to in the preceding paragraph, neither the unit owner who is subject to the petition for the auction nor any person seeking to purchase the unit ownership or the right to use the grounds on the unit owner's account may make a purchase offer.

In the case prescribed in Article 57, paragraph (4), if the act prescribed in Article 6, paragraph (1) as applied mutatis mutandis pursuant to paragraph (3) of that Article significantly impedes the unit owners' community life and if there is difficulty in removing the impediment and securing the use of the common area or maintaining the other unit owners' community life through other means, all of the unit owners or the incorporated management association, based on a meeting resolution, may file an action seeking to cancel the contract concluded for the purpose of using or profiting from the exclusively-owned area in the possession of the possessor involved in the act and seeking the transfer of that exclusively-owned area.

The provisions of Article 57, paragraph (3) apply mutatis mutandis to the filing of the action referred to in the preceding paragraph, and the provisions of Article 58, paragraph (2) and paragraph (3) apply mutatis mutandis to the resolution referred to in the preceding paragraph.

A person to whom an exclusively-owned area has been transferred based on a judgment under the provisions of paragraph (1) must further transfer the exclusively-owned area to the person who holds the title to possess the area without delay.