Properties facing a private road are a category where major problems can easily arise at the time of sale because of complex rights relationships.It can be difficult to find a buyer, and there is a risk that the price may fall by 20% to 30%It is important to understand this in advance and take appropriate measures.
What is a private road? Understanding the difference from a public road
A private road is a road owned and managed by one person or multiple people. Unlike a public road managed by the national government, a prefecture, or a municipality,use generally requires the owner’s permission.
Two forms of private road ownership
- Shared ownership by interest: A case in which multiple people jointly own a certain percentage of the private road area (the most common type)
- Subdivided ownership by lot: A case in which the private road is subdivided by lot and each person individually owns a specific section (common in older subdivisions)
What are the common types of private road trouble?
Many disputes involving private roads arise every year. Below are the representative cases you should understand before selling.
Trouble involving unauthorized parking
Because private roads are generally outside the scope of public no-parking and no-stopping enforcement,police intervention is difficult, and the owner is often forced to deal with the issue personally.The Garage Act (the Act on Securing Storage Places for Motor Vehicles, etc.) may apply in some cases, but the challenge is that it takes time to determine.
Trouble involving blocked or obstructed access
Even on private roads that had long been used for passage, there have been cases where a change in ownership led to sudden closure or demands for high passage fees.The custom of “a road that people had been able to use until now” has no binding legal force, and there is a risk that access may suddenly become unavailable depending on the owner’s wishes.
Trouble involving private road burden
A private road burden refers to a case in which the land or building being sold includes a portion of a private road provided for road access purposes.Under the Building Standards Act, there is a road access requirement (at least 2m of frontage on a road that is at least 4m wide), so a private road is necessary for land that does not face a public road. When a private road burden exists, maintenance and management costs must be borne by the owner, reducing the property’s value.
Why do private road issues make a sale less favorable?
For buyers, properties involving a private road make the following risks easy to see, so they are often reluctant to purchase.
- Ongoing maintenance and management costs arise
- In shared ownership cases, rebuilding and maintenance require everyone’s agreement
- There is a risk of sudden closure or high passage fees
As a result, the sale price may be 20% to 30% lower than that of a comparable property facing a public roadThis is not unusual.
What prior checks are needed to sell a property facing a private road?
Organizing the rights relationships before sale helps remove buyer concerns and leads to a sale at an appropriate price.
Check whether it is a road on which building is permitted
Check through the registry and cadastral map whether it satisfies the road access requirement (4m×2m) and whether it is a legally recognized private roadIf it does not, residential land use becomes difficult and the value may fall by 20% to 30% compared with market levels.
Clarify the ownership share ratio of the private road
If there is an ownership share, identifying the ratio and clearly stating the maintenance cost burden improves predictability for the buyer.If there is no ownership share, securing passage rights (the right of passage over enclosed land and an easement for passage)is an essential step before sale.
Obtain a consent form for passage and excavation
In the subdivided ownership type, construction work that excavates another person’s section of the private road requires the consent of all owners.Obtaining a consent form for passage and excavation in advance can give buyers greater peace of mind and help restrain price reduction negotiationsThis can help. If even one owner refuses, the sale may become impossible in the worst case.
Related reading
- What is real estate purchase and resale? An expert guide to the differences from brokerage and the pros and cons
- Avoid losses when selling real estate! How to spot self-serving brokerage talk and the trap of dual agency
- Do “off-market properties” really exist? An expert explanation of how real estate information actually works
FAQ: Common questions about private roads and property sales
Q. Does land facing a private road always sell for less?
A. Not necessarily. If the rights relationships are clear, an ownership share exists, and the consent form for passage and excavation is in place, there are cases where the property can be sold at a price close to one facing a public road. Preparation in advance is the key to preserving value.
Q. Is there a way to sell land that has no ownership share in the private road?
A. The most effective approach is to obtain a consent form for passage and excavation from the private road owners before the sale. If that cannot be obtained, the pool of buyers will be limited, and a substantial price reduction may be demanded in negotiations.
Q. Where can a consent form for passage and excavation be prepared?
A. In general, a judicial scrivener or real estate company prepares the form. The signatures and seals of all private road owners are required.
Q. Who bears the paving and maintenance costs for a private road?
A. The private road owners bear them. In shared ownership cases, costs are generally allocated according to each ownership share. Some municipalities may offer subsidy programs, so checking with the local government office where the property is located is recommended.
Q. What are the risks of buying a property with private road problems?
A. Risks include access restrictions, high passage fees, inability to rebuild, and increased maintenance costs. Before purchasing, be sure to confirm the rights relationships, whether consent forms exist, and the current conditions of use.
