Real estate companies seeking compensation from TEPCO

Representatives submitting the demand for compensation to the head of Tepco’s Ibaraki Office.

Approximately 2000 real estate agents from Ibaraki Prefecture are seeking compensation from Tepco for loss of revenue caused by the various news reports and rumors surrounding radiation levels from the Fukushima Daiichi Nuclear Power Plant in the neighboring prefecture.

On September 13th, the industry group submitted an official letter demanding restitution to Tepco’s Ibaraki Office, in what is believed to be Tepco’s first case where a real estate group has demanded compensation.

While Japan’s mid-term plan to Tohoku includes compensation terms for those in the fishing and agricultural industry, there is no reference to real estate agents. The head of Tepco’s Ibaraki Office said that they have agreed that there is a causal link between the cancellation of real estate contracts and fall in revenues as a result of the power plant disaster.

Ibaraki is next to Fukushima Prefecture, and at one point elevated radiation levels were recorded in one area of Ibaraki. Rental and sale contracts that were drawn up prior to March 11 were suddenly cancelled due to fear of radioactive contamination. There were many reports of foreign residents and foreign students canceling their rental contracts. In Tsukuba City, home to many foreign residents, there were cases where residents moved out in such a hurry that they left most of their household belongings behind. Real estate agents are now having trouble finding new tenants to move in.

Toride City and Moriya City are both within commutable distance to Tokyo yet the news of elevated radiation levels being recorded in the two cities hurt them both financially. A survey by the prefecture’s Real Estate Transaction Association of 86 real estate companies (just 4% of the total) showed an estimated 2.5 billion Yen (33 million USD) in financial damage caused by the nuclear disaster and fear of radiation.

The population of Ibaraki Prefecture on March 1st was approximately 2,966,000. On August 1st it had fallen to 2,955,800 residents – a fall of 10,000 residents over 5 months. Although the prefecture typically has a declining population, the rate of decline following the March 11 disaster was much more severe than normal. Approximately 30% of the residents who left Ibaraki were foreigners.

Sources:
The Sankei Shimbun, September 14, 2011.
The Tokyo Shimbun, September 14, 2011.
The Yomiuri Shimbun, September 16, 2011.