Right, for direct guarantors it makes sense. But there's also occasionally news from Japan of "Japan Rail [..] charg[ing] families of suicide victims more than US $2 million" e.g. covered in this reddit thread:
https://www.reddit.com/r/todayilearned/comments/1khj2n/til_i...
So I can definitely see how this makes perfect sense when it comes to doing "damage" to apartments (even if only due to reputation / superstition) if there are direct guarantors, but as the news about JR show there must be something deeper going on here.
I dug a bit. The legal ground of charging families of victim is this: When a person dies, his legal heir inherits all the rights and duties associated to his property (NOT his property itself. Civil Code, article 896.) The company asks damages from the deceased's property, which is a duty to be fulfilled by whoever inherited the property. In case the family members declared to abandon inheritance when the victim deceased, however, they are not liable.
Note that I'm not sure what the actual contract terms were in those cases in the article. I suspect it's a guarantor thing. It's very very common to have parents or relatives signed, even if you're an adult.
And I also assume that who actually filed a lawsuit was the property managing company, and some of those companies doesn't care much about reputation. When the issue is between individuals, it's not as common to take it to the court as in US.