Article 1 (Purpose and Definitions)
These Terms and Conditions set forth the rights and obligations of corporations or individuals (hereinafter referred to as “Company A”) who acquire sectional ownership rights in the traditional house revitalization project (hereinafter referred to as the “Project”) planned and managed by Sun Sun House Co., Ltd. (hereinafter referred to as “Company S”).
The Project is structured among the following three parties.
- Company S (Management Company / Landowner): Owns the land and is responsible for the overall management, maintenance, and rights administration of the property.
- Company C (Operating Company): Leases the building in bulk, operates it as lodging facilities, and carries out renovations.
- Company A: Acquires sectional ownership rights in the building and holds the rights to rental income and accommodation use.
In addition, this Project is based on the sale and purchase of tangible real estate and lease agreements, and does not constitute a financial instrument under the Financial Instruments and Exchange Act.
Article 2 (Ownership Rights and Income Rights)
Based on the acquired sectional ownership rights, Company A shall have the following rights.
- Right to rental income: The right to receive rental income based on the building lease agreement with Company C.
- Right to accommodation use: The right to use the lodging facilities under separately prescribed conditions based on the Project.
- Right to sell: The right to sell the sectional ownership rights to a third party; provided, however, that Company S shall act as the exclusive broker for such sale.
In addition, such rights shall be subject to the operating company’s right of first refusal.
Article 3 (Execution of Lease-Related Agreements)
In operating under the Project, Company A shall execute and comply with the following agreements.
- Land Use Consent Agreement: With respect to the right to use the land necessary for the existence of the building, Company A shall separately enter into a “Land Use Consent Agreement” with Company S, the landowner.
- Building Lease Agreement: With respect to the building portion owned by Company A, Company A shall enter into a “Building Lease Agreement” with Company C, the operating company, and entrust Company C with the operation of the relevant building.
Article 4 (Management, Cost Burden, and Delegation)
- Company A shall entrust Company S with the management of the building.
- The management services shall include the following.
- Building maintenance and management
- Repairs, cleaning, and upkeep
- Rights management and registration management - Company A shall bear the following costs.
- Annual management fee: JPY 33,000 (tax included)
Article 5 (Right of First Refusal)
- The Project includes a priority purchase right in favor of the operating company.
- After 10 years have elapsed, Company C shall have the right to purchase the property on a priority basis based on market price.
- The purchase price shall be determined according to market conditions and is not guaranteed as principal.
- In addition, repurchase by Company S shall be carried out based on the following guidelines.
| Elapsed Years | Repurchase Guideline |
|---|---|
| Year 1 | 10% |
| Year 2 | 20% |
| Year 3 | 30% |
| Year 4 | 40% |
| Year 5 | 50% |
| Year 6 | 60% |
| Year 7 | 70% |
| Year 8 | 80% |
| Year 9 | 90% |
| Year 10 | 100% |
*The above figures are only guidelines and do not guarantee the repurchase price.
Article 6 (Tax Treatment)
- This property shall be treated as a used wooden building, and its useful life shall be 4 years.
- Company A may record depreciation expenses as deductible losses.
- Tax treatment shall be handled under the responsibility of each Company A.
Article 7 (Bankruptcy Remoteness and Business Continuity)
- If Company C becomes unable to operate, Company S shall appoint a new operating company and continue the Project.
- If Company S becomes unable to perform its duties, Company A shall, through consultation, appoint a new management company.
- If Company A is dissolved or liquidated, these rights shall, in principle, be transferred to Company S without compensation.
Article 8 (Prohibited Acts)
Company A shall not engage in any of the following acts.
- Use in violation of laws and regulations
- Any act that damages the value of the facility
- Commercial use without the consent of Company S or Company C
Article 9 (Disclaimer)
- Rent, sale price, and other amounts may fluctuate depending on market conditions.
- This Project does not provide any guarantee of principal or yield.
Article 10 (Jurisdiction)
Any dispute relating to these Terms and Conditions shall be subject to the exclusive jurisdiction of the Tokyo District Court as the court of first instance.