[Qualification Acquisition] Financial Planner Level 2: Real Estate Investment Design - Other Legal Restrictions

Before we begin, as you may already know from the news, a magnitude 6+ earthquake occurred yesterday around 11:15 PM off the east coast of Aomori Prefecture. My home in Sapporo experienced a seismic intensity of 4, and the sound of the disaster alert, which I hadn't heard in a while, combined with the side-to-side shaking that lasted longer than I expected, reminded me of the Iburi Eastern Earthquake.
I pray for the earliest possible peace of mind for those in Hachinohe City, where the seismic intensity was particularly high, and for everyone else affected by the disaster.
Additionally, a warning for subsequent earthquakes off the coast of Hokkaido and Sanriku has been issued, indicating a risk of strong earthquakes over the next week. Please ensure your personal safety and check your preparations for any emergencies.

Let's move on to the main topic. Today's subject is Real Estate Investment Design: Other Legal Restrictions.
While these topics do not appear frequently on the FP Level 2 exam, they are considered important points in higher-level qualifications. Solidifying your foundation now will definitely be useful for future career advancement and practical work, so let's study them thoroughly.

1. Farmland Act

The Farmland Act is a law aimed at preventing the disorderly conversion and reckless development of farmland to ensure a stable supply of food. 'Farmland' subject to the Farmland Act refers to land used for cultivation purposes; it is determined by its current state, so the land category in the real estate registry does not matter. For example, even if land is registered as residential land, it is considered farmland if it is actually being cultivated.
In principle, permission is required to buy, sell, or convert farmland for other uses. Specifically, it is divided into: (1) transfer of rights to farmland (Article 3), (2) conversion of farmland (Article 4), and (3) transfer of rights for the purpose of conversion (Article 5). In all cases, permission must be obtained from the Agricultural Commission or the prefectural governor.

2. Land Readjustment Act

The Land Readjustment Act is a law established for the purpose of sound urban development, the improvement of public facilities, and the promotion of residential land use. In land readjustment projects, land is reorganized into a more usable shape while developing public facilities such as roads and parks.

(1) Land Readjustment Project

This refers to a project implemented based on the Land Readjustment Act for land within urban planning areas to improve public facilities and promote residential land use. Specifically, it aims for sound urban development by changing the division and shape of land and newly constructing or modifying public facilities such as roads and parks.
The implementing bodies are individuals, land readjustment associations, or public institutions, all of which carry out projects with the permission of the prefectural governor.

💡Difference between development work and land readjustment projects
Land readjustment projects are highly public-interest land reorganization projects carried out within urban planning areas based on the Land Readjustment Act, and they involve land substitution (kanchi). In contrast, development work is individual development aimed at residential land preparation or construction carried out based on the
City Planning Act, and it does not involve land substitution. The major difference lies in the underlying law and the purpose.

(2) Land Substitution (Kanchi)

The implementer can designate a provisional substitute lot before carrying out the land substitution. Land substitution refers to treating the substitute lot as the original residential land after the completion of the land readjustment project.
Once a provisional substitute lot is designated, the owner of the original land can use and profit from the provisional lot, but can no longer use the original land. However, even if a provisional substitute lot is designated, the original land can still be freely bought and sold until the day the public notice of land substitution is made.

🧐 Let's break it down a bit more
For example, if there is a pentagonal plot of land called A, the work performed for the purpose of improving public facilities and promoting residential land use (such as wanting to straighten roads or organize the land into orderly plots) is called a "land readjustment project." Since the work proceeds by grouping land A and adjacent land together, people using land A need to move temporarily, and the land prepared for that purpose is the "
provisional substitute lot." When the work is completed and the implementer makes a "
land substitution" public notice, the reorganized land is considered the original residential land, even if its shape is different, and the owner can officially use and profit from that land. This is "land substitution."

(3) Reduction of Land (Genbu) / Reserved Land

When previously undeveloped residential land is substituted with land organized through a land readjustment project, the area may become smaller than the original area. This is called "reduction of land (genbu)." Reduction of land is carried out for the purpose of securing land for public facilities and covering project costs, and the implementer will compensate the owner of the original land for the reduction, such as through monetary payment.

Also, for the purpose of covering the construction costs of the land readjustment project, the implementer can designate a portion of the planned land as "reserved land." By disposing of (selling) the reserved land, the implementer can use the proceeds to cover project costs or repay loans, which helps secure funding for the project.

That concludes Real Estate Investment Design: Other Legal Restrictions.
As I mentioned at the beginning, while the frequency of questions is not that high, I have the impression that the Farmland Act is more likely to be covered.
However, these laws are basic knowledge for considering real estate transactions and utilization, and they will definitely be useful when you advance to higher-level qualifications or practical work. Understanding 'why there are restrictions' and 'what kind of permission is required' not only helps with exam preparation but also leads to peace of mind and reliability when dealing with real estate in the future.
Regardless of how often they appear on the exam, grasping the basics is the shortcut to passing and will be a great strength in practical work, so let's organize these points thoroughly.