Risk of liability for construction-related contractual nonconformities, repair costs, and damages
First written in FY2023. 1 of 3 entries say "Worsened", first in FY2024. Latest entry: FY2025.
The whole theme swung hardest in 2026: 7 of 39 companies on the "Worse" side.
10 other companies' latest entry also says "Mitigated".
- FY2025MitigatedAnnual report
「Our group seeks to mitigate the above risks by conducting thorough internal inspections, sharing cases of contractual nonconformity liability that have occurred in the past, and taking measures such as obtaining housing defect liability insurance and construction liability insurance.」
For the risks of contractual nonconformity liability in condominiums for sale, detached houses for sale and custom-built homes, the company identifies internal inspections, case sharing, and enrollment in housing defect liability insurance and construction liability insurance as response measures. - FY2024WorsenedAnnual report
「In the condominium-for-sale and detached-house-for-sale businesses, we bear 10-year liability for nonconformity with contract with respect to the structurally important parts of new homes and parts designed to prevent rainwater intrusion, pursuant to the Act on the Promotion of the Quality Assurance of Housing. In the custom-built-home business, we also bear liability for nonconformity with contract for a certain period after delivery under construction contracts with customers.」
The scope of contractual nonconformity liability has been explicitly expanded beyond custom-built homes to include condominiums and detached houses for sale, with 10-year liability stated for the main structural parts of new homes and other components. - FY2023First statedAnnual report
「In the custom-built-home business, we bear liability for nonconformity with contract for a certain period after delivery under construction contracts with customers. We record a provision for warranties on completed construction based on past experience to cover the resulting repair costs. However, if repair costs or liability for damages exceed the provision, this may affect the group's operating results, financial position and other matters.」
The company has explicitly identified as a new risk item the possibility of contractual nonconformity liability after delivery in the custom-built-home business, repair costs, and costs or damages exceeding the provision for warranties on completed construction.