- From A to Z
Class L is a Leopalace21 property owners' member organization. It deals seriously with events at owner's each life stage, and provide total support for the lives of not only the owner himself/herself but also his/her family members of the next generation.
Class L offers a wide range of services to help the property owners enjoy a prosperous life.
Construction defects problem
From April 2018 to May 2019, construction defects were revealed in some of the properties that the Company constructed such as improper parting walls and non-compliance with the specifications stipulated in the Building Standards Act, use of non-compliant filler in parting walls, non-compliance of exterior walls with Minister's certification, and non-compliance of ceilings with specifications.
We largely completed the investigation of all buildings at the end of October 2019, and we have been working to prevent recurrence of the problem and repairing the defects since then. We announced a plan to eliminate all obvious defects by the end of 2024 while implementing measures to prevent recurrence and will carry on repairing construction defects.
LEONET is the Internet environment and contents service provided by Leopalace21.
LEONET provides a variety of contents such as online shopping, tenant-dedicated applications, and websites to support the tenant's single life. Internet connection is unlimited.
Master lease system for apartment en bloc for 30 years
Leopalace21's 30-year master leasing is a system whereby a landlord builds a rental apartment and we lease the entire building, paying monthly rent for up to 30 years regardless of whether there are vacancies. The rent under master-lease contract is subject to review jointly by Leopalace21 and the apartment owners every two years.
During the master lease period, we provide the integrated service of supporting all aspects of apartment leasing business, from tenant recruitment, to contract conclusion, to tenant management, to building management, and to building maintenance, without bothering apartment owners.
This is a contract plan of renting a room where people can decide the period of use in units of a day for as short as 30 days. The plan is recommended for those who already have a fixed idea on the length of their stay, such as business trips to reduce unnecessary expenses, moving alone with their family left behind, or commuting to school; those who find it troublesome to purchase furniture and home appliances; and those who wish to save efforts in the procedures for utilities.
Provision for apartment vacancy loss
It is a provision for vacancy loss on apartment units which is calculated according to the projected loss that could incur during a reasonably estimable period in order to prepare for the risk of increasing vacancies.
It is calculated based on the actual rent revenue and expenditure for individual rental property, and is periodically recalculated. When profitability improves due to an increased occupancy rates, the recording of ancillary revenue, or cost reductions, etc., reversal of the provision (reduction in cost of sales) is recorded, which has the effect of boosting profits in the Leasing Business segment.
Provision for losses related to repairs
A reasonably estimated amount of provision is recorded based on the defect rate, unit repair cost and the like in order to reserve for the losses related to repairs and incidental costs pertaining to the construction defects which were disclosed in 2018 and 2019,
For repair work costs and incidental costs, we have been constantly looking at the method of estimation so that the estimate becomes more reasonable and accurate.
We take into consideration following elements: change in the estimated unit price from the one calculated by our architectural engineering division to the one provided by the outside contractors; reduction in estimated unit price due to placing bulk orders with the outside contractors, change in repairing methods, and impact of partially insourcing the repair works utilizing in-house manpower resources; and changes in repair schedule.
If the conditions or assumptions on which these estimates are based change, the amount of the provision may change.
Leopalace21 is working to solve a wide variety of social issues with the aim of creating a sustainable society under the sustainability vision of "We go on creating new value for society today and in the future."