BRI Research Paper


The New Home Warranty System in Japan.

K.Matsumoto*1; March, 1984. 42p.


The consumer protection is a social problem common to the advanced free nations. The home owner's protection against house defects is one of the most important themes in this field. In Japan, a new home warranty scheme has started since 1980.

In the liberalistic economy, the optimal allocation could be realized through the market under certains conditions. The measures to counter economic problems are often proposed from this point of view.

At first, therefore, the author analyzes the physical, technical,economic and social conditions or restrictions put on the house-building in comparison with the ordinal consumption goods, and demonstrate that the hypothesis of "Perfect Competitive Market" does not apply to the trade of building. For this reason, the moral degeneration of the building industry and also the many disputes between consumers and producers are easy to occur in the free market.

The author also analyzes the economic situation of the labor employment, the consumer movement and the traditional legal restrictions of building trade in order to clear up the influencial surrounding to the defect problem.

In the next chapter, the author examines the essential characteristics of the defect of building and the dispute of defect, and propose, as a preventive system, the guarantee system to make the quality information perfect and to support the consumer of poor experience, accompanying with the quality control of supply side responsibility to steadily realize the expected quality, the insurance to diversify the guarantee risk and the arbitration which costs less than the ordinal legal procedures.

Lastly the author introduces the Japanese home new warranty system.

*1 Director, Building Economy Department

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