Fees and Deposit

Find out about the fees that may apply when renting property in Japan and how to terminate a rental contract...

If renting through an estate agent, an agency fee (chukai tesuryo), amounting to one month's rent is payable when the contract is signed.

A deposit (shikikin) is paid to the owner when the contract is signed; this can be the equivalent of two to six months' rent. This should be refunded if there is no damage to the property (beyond normal wear and tear) when the tenant moves out. However, check the conditions of the contract carefully as some owners only partially refund the deposit. In Kansai (western Japan), the deposit system is slightly different and is called hoshokin. The amount ranges from three to ten months' rent and is paid when the contract is signed. It is usually refunded at the end of the contract, but the amount depends on the condition a property is left in by a vacating tenant.

Key money (reikin) is also due when the contract is signed and is not refundable. This is essentially a gift to the landlord to express thanks in advance for any services that the landlord may provide to the tenant during the term of the lease. The reikin can be between one and three months' rent and can rarely be avoided. If a lease is extended, the landlord may request another month's reikin.

Advance rent (yachin) is paid when the rental contract is signed and is one month's rent. Rent is then paid at the beginning of each month, usually by bank transfer.

A management fee (kanrihi) is charged for the management of a building, maintaining its interior and exterior, and any common areas. Tenants may also be expected to participate in maintenance projects on a monthly basis.

Tenants must have insurance against fire and other natural disasters. Insurance costs 15,000 to 30,000 yen for a two year contract, and is paid when the contract is signed. The insurance is renewed when the contract is renewed.

Terminating a Contract

One to three months before the contract expires, the tenant receives a letter from the landlord (or agency) asking whether the tenant intends to renew or terminate their contract. If the tenant wants to end the contract, they complete the termination form (which is enclosed with the letter) by the designated date and the contract is terminated. If the lease is to be renewed, the tenant can negotiate any rent increases. A renewal fee may also be payable, approximately one month's rent.

Notice periods can vary and are stipulated in the contract, as are the contract's termination procedures for both the tenant and the landlord. Notice periods are generally one to two months. Leaving a rental property before the end of the lease may incur a penalty fee or losing part of the security deposit.

If the owner or landlord does not want to renew the contract with an existing tenant, then the owner should give the tenant at least six months' notice before the contract expires.

Conflicts

In the event of a conflict with a landlord, the Foreign Residents Advisory Centre can provide services in English. Local authorities can provide details of the nearest centre.