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Cost-cutting suspected as unapproved materials confirmed in Leopalace21 apartments

This screenshot shows the official website of Leopalace21 Corp.

TOKYO -- Suspicions have arisen that rental apartment giant Leopalace21 Corp. attempted to cut costs by using unapproved materials on the outer walls of apartments it built.

The finding that the company used unapproved materials came as the company began asking thousands of residents to move out of hundreds of defective apartment buildings for repair work.

According to the Ministry of Land, Infrastructure, Transport and Tourism and other sources, the Tokyo-based company used materials with poor fire resistance that are not approved under the Building Standards Act in apartment buildings. Some in the industry suspect that the firm's misconduct was organizational.

Although the company had reported to local governments that it would use glass wool on the inside of the external walls of its apartment complexes, the firm actually used urethane foam. While the use of glass wool, which is a good insulator and highly fire-resistant, is permitted under the Building Standards Act, urethane foam is less fireproof and its use on exterior walls is not permitted.

Asked why the company used urethane foam, a representative said, "Even though the material is not cheap, using it raises work efficiency. We were not aware that the use of the material could constitute a legal violation. Our on-site construction management system was insufficient."

A construction industry insider, however, points out that the company should have been aware that the material in question used at the construction sites was different from one specified in blueprints.

"Because the apartment buildings found with faulty work were built over a long period of time and their number is high, it's not something caused by careless mistakes. It is highly likely that the malpractice was carried out systematically," the individual said.

Osamu Nagashima, chairman of real estate consultancy Sakura Jimusho, said, "Urethane foam is cheaper than glass wool. I suspect that the company used the cheap material intentionally to cut costs."

The defective parts in Leopalace21 apartments are concentrated in where it is difficult to check after completion, such as the inner part of walls. Prefectural and private bodies tasked with screening building construction usually check the quality of materials that are not visible from the outside by having builders submit photos taken during construction work. The latest scandal has thus apparently highlighted the blind spots of the system.

According to Leopalace21 officials, the firm stuffed the inside of outer walls with urethane foam in 925 buildings and installed single-layer ceiling insulation in 641 buildings though it was supposed to have been double-layered. Furthermore, the corporation used materials in partition walls between apartments of 771 buildings that were different from those specified under the Building Standards Act, thereby failing to fulfill noise barrier performance standards.

The land ministry has asked the governments of Tokyo and other prefectures where defective apartment complexes have been found to check the status of legal violations and whether the company's refurbishment work will meet the standards. A ministry representative said, "The firm used non-specified materials and the buildings cannot be said to be fire-resistant."

A Chiba Prefectural Government official looking into flawed Leopalace21 apartments in the prefecture, east of Tokyo, said, "The defective buildings lack inspection holes that are normally installed in the ceilings and floors, limiting the parts that can be visually inspected."

Residents and owners of Leopalace21 housing complexes, meanwhile, remain perplexed over the scandal.

"I chose this apartment thinking it was safe as it was built by a major company," said a 21-year-old college student living in Kawasaki, south of Tokyo. "I only feel uneasy and frustrated now." He added that he was busy job hunting, and complained, "I have no time to move out even if I need to."

A 20-year-old college student living in a Leopalace21 apartment in the Tokyo suburban city of Hino said, "I feel anxious watching the news. The company may have thought they could get away with it as long as their misconduct wasn't uncovered, and gave no regard to our safety."

The 69-year-old owner of a Leopalace21 complex in Munakata, Fukuoka Prefecture, in western Japan said cracks appeared in the structure's foundations and corridors right after it was built in 2009. Even though he reported the defects to the company, a representative answered, "We're handling a lot of cases and don't know when we can conduct an investigation."

He explained to the 20 households living in the complex that he would carry out his own inspections. "I became an owner because the company said it wouldn't be any trouble. It's almost fraudulent," he fumed.

(Japanese original by Masahiro Kawaguchi, Business News Department, Norihito Hanamure, Kohei Chiwaki and Tomoyuki Hori, City News Department, and Yuki Yamamoto, Tama General Bureau)

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