The key to improving the quality and safety of real estate management lies in the professional expertise of a licensed real estate broker who is well versed in laws and regulations and contractual practices. This article provides a concrete explanation of the role of the building contractor in each phase of rental management, condominium management, and brokerage, and outlines a path to both minimizing risk and maximizing asset value. It is a must-read for owners and operators who wish to pursue compliance and customer satisfaction at the same time. At the end of the article, you will also find a case study of INA & Associates' high-end property management services.
A real estate transaction professional (generally abbreviated as " takken-shi ") is a professional qualification for real estate transactions and a national qualification based on the Real Estate Transaction Business Law. Real estate transaction professionals are exclusively responsible for important statutory duties at the time of real estate sales and lease contracts, specifically the following "three exclusive duties
Explanation of important matters (delivery of Article 35 documents): Explanation of important matters regarding the property and transaction conditions to purchasers and lessees of real estate before signing a contract.
Signing and sealing the Important Matters Explanation: Signing and sealing the document describing the above-mentioned important matters (Important Matters Explanation) by the real estate agent.
Signing and sealing the contract (Article 37 document): Signing and sealing the sales contract, lease contract, and other documents delivered at the time of conclusion of the contract.
These are statutory duties that only a licensed real estate broker is allowed to perform, and a real estate brokerage firm must always explain important matters and deliver the contract documents through a licensed real estate broker. Contracting procedures without the involvement of a licensed real estate broker are legally unacceptable, and there is a risk of invalidation of the contract and administrative penalties if there is a violation. Therefore, real estate contractors are indispensable in real estate transactions and contribute greatly to consumer protection and the appropriateness of transactions.
It is also important to note that a registered real estate transaction professional must not only pass the exam, but must also be registered with the prefectural governor and issued a registered real estate transaction professional certificate before being able to practice. 2015 legal revisions have changed the name from "chief real estate transaction professional" to "certified real estate transaction professional," emphasizing the ethics and responsibilities of the profession. Building contractors are positioned as professionals in real estate transactions and are responsible for protecting the interests of contracting parties by utilizing their extensive legal knowledge (Building Lots and Buildings Transaction Law, Civil Code, Building Standards Law, Urban Planning Law, etc.).
In the real estate management business (property rental management, property operation, etc.), real estate agents play an important role in a variety of situations. For example, from recruiting tenants to signing a contract for rental properties. When a property management company is entrusted by the owner of a rental property to manage the property and acts as an intermediary for a lease contract with a prospective tenant, the explanation of important matters in the lease contract must be provided by a registered real estate agent. Whether it is a newly built condominium or a rental apartment, the act of soliciting tenants and concluding a lease contract falls under the 宅建 business, and is therefore within the scope of a real estate contractor's exclusive duties.
The following are specific situations in which a real estate agent can be utilized.
Explanation of important matters to tenants: A real estate agent carefully explains the structure and facilities of the property and the terms of the contract (rent, security deposit, key money, contract period, renewal fee, notice period for termination, etc.) and delivers a written explanation to the tenant. By ensuring that legally required explanations are provided, problems can be prevented at a later date. If the real estate agent is familiar with the property and the details of the contract, omissions and inadequacies in the explanation are less likely to occur, and the tenant can go into the contract with peace of mind.
Contracting on behalf of the owner: When leasing a property under management to a third party, the management company concludes a lease contract on behalf of the owner (landlord). In this case, the real estate agent, as the lessor's agent, signs and seals the contract and explains important matters to the owner, thereby fulfilling the legal procedures on behalf of the owner. Since the real estate agent has an accurate understanding of the property conditions and lease terms, the real estate agent has the advantage of being able to fully fulfill his/her responsibility to explain the lease on behalf of the owner.
Handling complaints and problems: When problems arise during the lease (such as pointing out defective equipment or violations of the contract), the knowledge of the building contractor can be put to good use. By taking appropriate measures based on the contract and advising both the tenant and the lessor from a legal perspective, they can contribute to the amicable resolution of disputes. A property management company with a licensed real estate agent will also increase tenants' trust in the company, leading to a sense of security that "this company will follow the rules and handle the situation.
Real estate sales: Some property management companies handle not only rentals, but also brokerage sales of properties entrusted by owners, and sales and purchases of investment properties. A licensed real estate agent is indispensable in these real estate transactions as well, and is responsible for everything from explaining important matters prior to signing the contract to signing the contract. In the sale and purchase of managed properties, there are special matters to be explained, such as the contractual relationship during the lease and the condition of the building, which can be explained accurately by a licensed real estate contractor with knowledge cultivated through management work, making smooth transactions possible.
As described above, real estate agents are specialists in contracts and law, and play a key role in contractual activities in property management. With the involvement of a licensed real estate contractor, explanations to owners and tenants are systematically provided, and transactions become more transparent and convincing. In fact, property management companies are more likely to gain the trust of their customers by promoting the fact that they are being handled by qualified professionals, and the reputation of being "safe because we have a licensed real estate agent" is directly related to the value of the business.
Companies engaged in the real estate business are legally obligated to have a certain number of licensed real estate contractors. The Building Lots and Buildings Transaction Business Law stipulates that each office must have at least one licensed real estate transaction agent (full-time licensed real estate transaction agent) for every five employees. At least one full-time real estate transaction attorney must be assigned to each office, without which a business license will not be granted. If there is a shortage of building contractors, they must be replaced within two weeks. Failure to do so is subject to severe penalties such as suspension of business, revocation of license, and a fine of up to 1,000,000 yen. Thus, the establishment of a licensed real estate contractor is a legal requirement for the real estate business and is one of the most important compliance issues in corporate management.
On the other hand, in the real estate management industry, there are two other related qualifications that are mandatory: chief administrator andcertified rental real estate business administrator. The differences between these qualifications and those of a certified real estate broker are as follows.
| Qualifications and Positions | Scope of work | Obligation (standard) | Main exclusive business contents |
|---|---|---|---|
| Real estate transaction agent (宅建士) | Brokerage of real estate sales and rentals (all aspects of the real estate building business) | At least one for every five persons per office (at least one for each office) | Explanation of important matters (Article 35) and delivery of written documents, signing and sealing of contracts (Article 37), etc. (duties related to sales and lease contracts) |
| Chief administrator | Condominium management services (entrusted with the management of condominiums under condominium unit ownership) | At least one person per 30 management associations per office | Explanation of important matters in management contracts, affixing name and seal to contracts, etc. (work related to management consignment contracts) |
| Rental property business manager (business administrator) | Management of rental housing (management entrusted by owners of rental properties) | At least one per office (*Registration is mandatory for 200 or more units under management) | Explanation of important matters in rental property management contracts, supervision of rental housing management operations (fulfillment of reporting obligations to owners, etc.) |
As described above, a registered real estate contractor and a chief administrator/rental property management supervisor are qualified under different target businesses and laws and regulations governing their jurisdiction. While a registered real estate contractor deals with real estate transactions in general (brokerage of sales and rentals), a chief administrator specializes in condominium management. A certain number of chief administrators are required to be appointed by condominium management companies based on the Act on Proper Condominium Management, and an explanation of important matters by a chief administrator is necessary when concluding a contract with the management association. This is equivalent to the role of a building contractor in rental transactions, and it can be said to be a mechanism to protect the interests of the management association (customers) by involving contract specialists in the field of condominium management as well.
In recent years, the newly introduced national qualification of "rental real estate business manager " (commonly known as "rental property manager") has become a mandatory qualification for managers of rental housing, based on the Rental Housing Management Business Law. Rental property management companies that manage a certain number of rental units (200 units or more) are obligated to have at least one certified rental property manager at each office. The manager is responsible for explaining important matters in the management contract with the owner of the rental units and supervising the overall management operations. Although there are transitional measures that allow building contractors to be appointed as business administrators with a certain amount of work experience and training, it has been pointed out that in the future the position may be consolidated into that of a certified rental real estate business administrator.
In summary, each certification related to real estate management has the following characteristics
Legal obligations: Building contractors are required to be licensed as building contractors, chief administrators are required to be licensed as condominium managers, and rental property managers (business administrators) are required to be licensed as rental property managers above a certain size.
Areas of responsibility: Brokerage contracts for sales and rentals for registered real estate builders, condominium management consignment contracts for chief administrators, and management consignment contracts for rental properties for certified leasing administrators.
Exclusive duties: Both are exclusively in charge of the core contractual activities, such as explaining important matters and signing the contract documents.
Number of persons: The number of building contractors is based on the number of employees, the number of chief superintendents is based on the number of management associations, and the number of rental property managers (business administrators) is based on the number of units under management.
The scope of the examinations for both real estate registered builders and chief superintendents has many points in common, such as legal knowledge, and those who acquire a double license are evaluated as personnel who can handle a wide range of tasks, from real estate transactions to building management. In practice, there are many cases where a real estate company is engaged in both rental brokerage and rental management, and there are also many cases where a registered real estate contractor concurrently serves as a business manager under the Rental Property Management Business Law. Companies are required to place each qualified person in the right place in order to comply with laws and regulations and improve the quality of services provided.
There are many benefits for both companies and individuals in acquiring and holding a Realtor license.
Corporate benefits:.
Legal compliance and business stability: As mentioned above, building contractors are an essential requirement for business operations, and having a sufficient number of them reduces concerns about administrative penalties, etc. Conversely, if there are not enough, compliance management will be inadequate and risk will increase. Having enough qualified staff will ensure stable business operations and enable the opening of new offices and business expansion with a complete system in place.
Increased customer trust: The presence of a licensed real estate agent within the company itself is a sign of trust. If a qualified person handles the contract situation, clients can feel secure in the knowledge that they are entrusting their business to a professional. A licensed real estate agent can provide appropriate advice and suggestions based on his/her legal knowledge, which also leads to higher customer satisfaction. As for the corporate image, putting "services provided by qualified professionals" up front will differentiate the company from its competitors.
Expansion of business scope: If an employee has a real estate broker license, the scope of real estate brokerage services, such as real estate sales brokerage and rental brokerage, will be expanded. For example, a company that specializes in rental management can provide one-stop services if it can also handle rental brokerage in-house. Also, if there are enough licensed real estate agents in the company, they can handle a large number of contracts at the same time, thus avoiding missed business opportunities.
Reinforcement of compliance system: Qualified staff are familiar with the Building Lots and Buildings Transaction Business Law and related laws and regulations, which contributes to improving compliance within the company. Utilizing the knowledge of a licensed real estate contractor in checking contract documents and maintaining work flow will help eliminate illegal contract clauses and review work procedures, resulting in a reduction in the risk of lawsuits and the number of claims. In some cases, real estate agents can also serve as instructors for internal audits and employee training.
Advantages on the individual side:.
Advantageous for employment and career change: A certified real estate contractor is so valued in the real estate industry that it is virtually an essential qualification. In many real estate companies, "almost everyone is required to obtain a certification after joining the company," and if you already have a certification, you are likely to be given preferential treatment in hiring and promotions. Also in industries other than real estate, such as finance, construction, and insurance, knowledge of real estate is highly valued, and holders of real estate construction certificates tend to have an advantage in employment. Qualification holders are highly valued in a wide variety of industries as proof of knowledge and trust.
Career advancement and increased income: Many companies offer a "qualification allowance" to employees who have a certified real estate agent license, which in some cases adds several tens of thousands of yen to their salary each month. Also, a certified real estate agent may be considered a candidate for a future managerial position, and may be a condition for promotion to a sales manager or store manager position in the office. Even if you aim to start your own business, a real estate license is essential to obtain a real estate license, which opens the door to starting your own real estate company.
Acquisition of a wide range of knowledge: The knowledge of real estate-related laws and regulations, the tax system, and buildings and land that you acquire through studying for the certification will be useful in your daily life. When purchasing, selling, or renting real estate, you can use this knowledge to negotiate favorably and avoid problems. In addition, the knowledge of a real estate licensed real estate agent can be used when dealing with financial products (real estate investment trusts, reverse mortgages, etc.), expanding your field of activity in areas that have a high affinity with real estate.
Expanding career paths: With a real estate licensed real estate agent as a starting point, obtaining a double license with other certifications is also popular. For example, if you obtain a license as a registered real estate transaction consultant and a chief administrator, or a registered real estate rental property manager, you will be valued as a person who can handle everything from real estate transactions to rental management and condominium management. In addition, there are also examples of people who combine their qualifications with those of financial planners (FP) and real estate appraisers to create their own careers as consultants. By enhancing your expertise based on your certification, you will have a foundation for a long career in the future.
As described above, the Realtor certification is a "proof of trust" and a "key to expanding opportunities "* for both companies and individuals. For companies, the presence of qualified individuals will enable them to gain the trust of customers and clients and grow their business, while for individuals, certification will increase their job options and enable them to build a stable career. In fact, major real estate companies are eager to recruit qualified real estate contractors, and they give preferential treatment to those who hold the certification. This is one of the reasons why many people are interested in becoming a certified real estate contractor.
By utilizing certified real estate contractors in real estate management, it is possible to enhance the overall business (providing advanced services). In particular, there are three major benefits: compliance (legal observance), customer responsiveness, and contract risk reduction.
Thorough compliance: As legal experts, building contractors are knowledgeable about various laws and regulations related to real estate management (e.g., Land and Building Lease Law, Housing Quality Assurance Law, Consumer Contract Law, Personal Information Protection Law, etc.). This allows us to closely examine the contents of lease agreements and management consignment agreements to check for any illegal covenants or deficiencies. Having a licensed real estate agent in-house allows us to take precautionary measures against legal violations and to quickly formulate appropriate countermeasures in the unlikely event of a problem. In addition, having a licensed real estate agent on staff allows the company to quickly catch up with increasingly complex and frequent legal changes (e.g., changes in contract practice due to the invoice system or Civil Code amendments), and to raise the level of compliance throughout the organization through in-house training. It has been pointed out that the assignment of licensed real estate agents is an effective means of reducing compliance risks, and conversely, the absence of a licensed real estate agent can lead to inadequate legal compliance management and increased risks.
Improved customer service: In rental management operations, the quality of service to both owners as landlords and tenants as tenants is important. When a real estate agent applies his or her knowledge to the customer service, the ability to respond to the customer is greatly improved. For example, when a prospective tenant has a question about the property or the terms of the contract, a licensed real estate agent can explain it in an easy-to-understand manner, taking into account the legal background and the basis of the contract terms. By providing advice to the owner regarding negotiations on rent revisions and exit settlements (security deposit settlements), while showing legal standards of appropriateness, we are able to maintain a relationship of trust and reach an agreement. When handling complaints, a "qualified person in charge" can explain in good faith, which will greatly increase the customer's sense of security and satisfaction, leading to the maintenance of corporate credibility. In short, the knowledge and qualifications of a licensed real estate agent become a weapon in customer service and raise the level of service quality itself.
Reduction of Contract Risk: Many of the risks that can arise in property management stem from contracts. In many cases, problems are caused by inadequate contracts or omissions in the explanation of important matters. With the involvement of a real estate agent, risk factors can be identified and appropriate measures can be taken before the contract is signed. For example, if there is a hidden defect in the property, it is possible to prevent disputes at a later date by informing the tenant in advance of the defect in the explanation of important matters or by specifying it as a special clause in the lease contract. A real estate contractor can propose a mutually agreeable compromise within the scope of the law, so that the contract can be adjusted to a reasonable content. Furthermore, if the real estate contractor is also familiar with the management business, he or she can deal with unexpected situations without hesitation based on the contract by making the contract content anticipate practical risks such as the risk of rent delinquency and the demarcation point of responsibility in the event of equipment failure. As a risk management leader, the real estate agent is involved from the contract stage, contributing to the prevention of disputes and minimization of damage when problems occur.
Improved reliability and added value of services: The presence of a licensed real estate contractor in the company enhances the credibility of the service itself by appealing to clients that "our company is handled by professionally qualified personnel. This can be said to be the advancement of real estate management itself. In addition, when introducing new methods, such as the recently popular "IT explanation of important matters" (online explanation of important matters), the realtors will play a central role, providing a sense of security in the operation of the system. By building a system that utilizes technology while at the same time having a licensed real estate agent check and follow up at key points, we can provide next-generation management services that are both efficient and reliable. As a result, you will be able to provide your clients with added value that other companies do not have, and this will lead to a competitive advantage in the market.
As described above, it is no exaggeration to say that properly utilizing a licensed real estate contractor will raise the quality of real estate management services one rank higher. Takkenken-shi has the driving force to evolve from conventional empirical management to scientific and strategic management backed by legal knowledge. Property management companies should incorporate the knowledge of licensed real estate professionals into their operations to realize sound, compliance-oriented management and provide services with a high level of customer satisfaction.
There are several managerial perspectives from which a company like INA&Associates, a real estate tech company, should utilize 宅建士 as human assets.
Specifically, the following measures and perspectives can be considered.
Planned assignment and training of building contractors: Management should systematically assign the required number of building contractors according to the company's business volume and service expansion plans. For example, if a new location is to be established as a result of business expansion, the company should hire and train people to become 宅建建士 beforehand so that a full-time 宅建士 can be assigned smoothly at the time of opening.
Design work that maximizes the skills of the building contractor: Employees with building contractor qualifications should be given work that allows them to fully demonstrate their expertise. For example, a licensed real estate agent could be appointed as the leader of a project to review the flow of contract-related work and use his/her knowledge to standardize contract forms and promote the use of IT, or he/she could serve as an instructor for in-house compliance training to help raise the level of all employees. From a managerial perspective, giving the real estate agent the authority and responsibility to perform important tasks will increase his/her motivation and prevent turnover.
Integration with technology: INA&Associates considers itself a "tech-driven human capital investment company" that leverages technology to develop next-generation real estate services. Leveraging this strength, the company's strategy could be to integrate the knowledge of home builders with technology. For example, building contractors could be involved in the development of an AI-based contract checking system and reflect their practical knowledge in the algorithm, a system could be created in which building contractors can provide chat consultations on an online customer service system, and qualified staff could be involved in the latest services such as VR previews and electronic contracting to ease user concerns. This is an initiative. From a management perspective, by combining the expertise of real estate agents with technology, we can create a unique quality of service that cannot be imitated by other companies. Innovation through the fusion of people and technology can only be realized through the use of qualified in-house personnel.
Knowledge sharing and multi-skilling within the organization: Rather than having a licensed real estate agent focus exclusively on one part of the business, there must also be a way to spread knowledge throughout the entire organization. For example, in a company like INA&Associates, which has a wide range of business areas such as rental brokerage, rental management, and sales brokerage, it is important to share know-how between departments to create synergy. For example, a study session led by a licensed real estate agent could be held to provide cross-skills training for all employees, with the staff of the rental management division learning the key points of the Real Estate Business Law while the staff of the brokerage division learns about management practices. From a management perspective, it is possible to create a flexible and strong organization by creating a group of multi-skilled workers while ensuring that knowledge does not belong only to specific individuals.
Thus, clear policies and measures by top management are necessary to maximize the use of building contractors as human assets. By fostering a corporate culture that appropriately evaluates and promotes qualified employees, a virtuous cycle will be created in which employees work hard to improve themselves and further attract talented building contractors.
As the social environment changes with the declining birthrate, aging population, and the development of AI technology, the role of real estate contractors in the property management market is also expected to change and develop in the future. In conclusion, however, the building contractor is a profession that will continue to be needed well into the future. We summarize its prospects and social significance from several perspectives.
The value of real estate contractors in the age of AI: In recent years, the development of real estate tech has led to the practical application of tools for automatically creating contracts and AI chatbots to respond to inquiries. While some routine tasks may be replaced by AI, tasks such as explaining important matters and building trust with clients, which are the responsibility of real estate agents, are areas that are difficult for AI to replace. The role of making decisions based on the client's situation and providing reassurance in a face-to-face setting, backed by legal knowledge, can only be fulfilled by a human real estate agent. In fact, the use of IT will increase the amount of time that can be devoted to the real work of real estate agents and enable them to provide more attentive customer service. It is expected that property management services will continue to evolve in both efficiency and sophistication through the collaboration of technology and building contractors.
Changes in the legal system and expansion of the responsibilities of building contractors: The Ministry of Land, Infrastructure, Transport, and Tourism is promoting the soundness and sophistication of the real estate industry, and the system surrounding building contractors is changing with the enactment of the Rental Housing Management Business Law (2021) and the lifting of the ban on full-scale IT instruction of property management. In the future, there is a possibility that there will be a clear differentiation in the scope of work between building contractors and rental property business managers and the development of a cooperative system. For example, the division of roles may progress so that the explanation of important matters at the time of a lease contract will continue to be provided by the building contractor, while the explanation of important matters at the time of a management contract will be provided by the rental property manager. Even in such a case, the role of the building contractor as the overall coordinator of the entire real estate transaction will remain unchanged. They will be required to support a safer and more secure real estate distribution market through their consistent involvement as professionals from transaction to management.
Market Needs and Demand for Real Estate Professionals: While real estate demand is expected to shrink due to Japan's declining population, new market needs are emerging, such as addressing the issue of vacant houses, revitalizing the distribution of existing housing, and diversifying needs for two-location living and renting. The importance of property management is rather increasing, and demand for real estate agents is expected to remain firm in proportion to this increase. For example, real estate knowledge is essential for new financial products such as reverse mortgages for the elderly, and there are an increasing number of situations where licensed real estate agents can serve as a bridge to these products. In the property management market as well, the role of real estate licensed real estate agents will become increasingly important in addressing social issues such as the soundness of subleasing and the appropriateness of lease contracts. As the government tightens its guidance and supervision, companies will continue to seek out competent real estate agents.
Social Significance: Guardians of a Safe and Secure Living Environment: Building contractors play a part in the safety net of residential life in society. Real estate transactions are expensive transactions that many people do not experience more than once in their lives, and are an area where there is a large asymmetry of information due to differences in expertise. This is where real estate agents play a social role by acting as intermediaries to protect consumers, who tend to be in a vulnerable position, and to realize fair transactions. In the field of real estate management, real estate agents also function as coordinators between tenants and lessors and enforcers of fair rules, contributing to the stability of residents and the preservation of owners' assets. Proper lease contracts and smooth management are the foundation of a safe and comfortable living environment. Building contractors support the "infrastructure of security and trust" in residential life. This is also in the public interest, and the social significance of the real estate contractor will become even greater in the future.
In general, in the property management market of the future, real estate contractors will be positioned as "professionals who evolve in response to change. Even as the industry undergoes digital transformation (DX), demand for licensed real estate agents is expected to remain steady as the last bastion of security and safety that people demand for their homes. In fact, the application of knowledge to new fields and collaboration with other certifications will broaden the field of activity, and it can be said that the certified real estate contractor will continue to be a promising qualification in the long term.
For companies and people involved in real estate management, licensed real estate agents are indispensable partners. With a sense of social mission in mind, they will contribute to the credibility and development of the real estate industry as a whole as they continue to improve their skills and deepen their expertise. There are high expectations for the future of the real estate management market.