Buyers of Olympic village condos left out in the cold after delayed Games

Mitsui Fudosan Co

10/03/2021 01:19

By Takashi Umekawa and Yuki Nitta
    TOKYO, March 10 (Reuters) - When Tokyo won the right to host
the Olympic Games, enthusiastic buyers flocked to purchase
luxury condominiums planned for the sprawling development that
will house athletes during the event.
    But with the Olympics delayed for a year because of the
global pandemic, and with uncertainty still clouding the Games,
buyers' excitement has turned into frustration. Even as move-in
dates have been pushed back by a year, they say they have heard
little from the property companies.
    Two dozen buyers of units in Harumi Flag, the
5,600-condominium complex on the Tokyo waterfront, are seeking
compensation for the delay from developers.
    "Any change in the move-in day is an extremely important
factor in a real-estate sales contract," said Hironobu Todoroki,
a lawyer representing the buyers in civil mediation, which aims
to resolve disputes through discussion.
    The property companies should have met with the buyers to
explain the situation, he said, adding that he would consider a
lawsuit if mediation failed.
    A spokeswoman for Mitsui Fudosan Residential, the lead
developer among the 10 property companies involved, said it has
responded to inquiries and would continue to do so. 
    She said the company would continue to set up opportunities
to explain the situation to buyers and respond as needed to
civil mediation or other legal action.
    Buyers have been told they can back out of contracts because
of the delay. Mitsui Fudosan Residential declined to say whether
any contracts had been cancelled.
    One 45-year-old woman is among those seeking compensation.
She and her husband have had to push back the sale of their home
because of the delay. 
    They bought a 95-square-metre (1,020 square feet)
condominium in Harumi Flag for 85 million yen ($784,000). But
she was "shocked" that the only contact about the delay was a
brief letter from the developers. That was in sharp contrast to
the many in-person meetings required when buying, she said. 
    "After all that, I thought, 'What? That's it?'," said the
woman. She and other buyers spoke on condition of anonymity
because of the sensitivity of the situation.
    
    RECLAIMED LAND
    Built on reclaimed land, Harumi Flag is designed to house
about 12,000 people in 23 buildings. It includes shops, a park
and a school. Tenants were supposed to move in starting in 2023.
Mitsui Fudosan Residential declined to say how many units have
been sold. 
    A 37-year-old medical researcher said he bought a spacious
110-square-metre condominium because he plans to live with his
fiancee and parents. But the unexpected delay means they are
sharing his two-bedroom current home until the new condominium
is ready. 
    At 65 square metres, his current home is too cramped for
four adults, he said.
    The project cost the Tokyo government 54 billion yen ($500
million), including road work and infrastructure. On top of
that, the government paid 4.2 billion yen to the developers to
lease the complex for a year, using it as the Olympic village
for about 10,000 athletes. 
    Because of the delay, the lease was extended for another
year, for 4.2 billion yen.
    Todoroki, the lawyer, said he would raise the legitimacy of
the lease extension in the civil mediation, given that the
condominiums were already sold.
    The Tokyo government and Mitsui Fudosan Residential both
said they saw no issue with extending the lease. 
    Another buyer, a man in his 30s, said developers should use
some of the 4.2 billion from the lease extension to pay
compensation. 
    Mitsui Fudosan Residential declined to comment on his
situation.
    The delay had disrupted his plan to move a year before his
daughter starts elementary school in 2024, he said. 
    She will attend school in Harumi, he said. Now, he worries,
she won't be able to make friends and get settled before
starting school.
($1 = 108.4700 yen)

 (Reporting by Takashi Umekawa and Yuki Nitta; Editing by David
Dolan and Gerry Doyle)
 ((Takashi.Umekawa@thomsonreuters.com;))