Complete Guide to IT-Based Important Matters Explanation — How to Sign a Rental Contract from a Distance or at Home and Key Precautions

What is IT-Based Important Matters Explanation — How Online Important Matters Explanation Works

When renting a property, the Real Estate Brokerage Law (Takkengyoho) requires a Certified Real Estate Transaction Specialist (Takkenshi) to conduct an Important Matters Explanation. Traditionally, in-person implementation was mandatory, but after the 2017 Ministry of Land, Infrastructure, Transport and Tourism (MLIT) guideline revision (social experiment), the May 2021 amendment to the Real Estate Brokerage Law fully deregulated IT-based Important Matters Explanation (Important Matters Explanation utilizing IT).

Utilizing IT-based Important Matters Explanation is particularly convenient in the following scenarios.

• •When searching for a room from a remote location due to job transfer or school enrollment
• •When work is busy and it's difficult to visit the real estate office during business hours
• •When going out is difficult or you want to avoid visiting due to infectious disease precautions
• •When foreigners or non-native English speakers want to listen while reviewing materials online

Legal Requirements for IT-Based Important Matters Explanation and Scope of Implementation

Types of Transactions Where IT-Based Explanation Can Be Used

IT-based Important Matters Explanation can be used in the following transactions.

• •Rental agreements: Both residential and commercial properties are eligible
• •Important Matters Explanation for sales contracts: Expanded to include sales contracts with the 2022 amendment

However, regarding electronic signatures and document delivery of the Important Matters Explanation, this is linked with the provision of the Important Matters Explanation document through electromagnetic means under Article 35 of the Real Estate Brokerage Law (effective May 2022). Some real estate companies have cases where "IT-based explanation is available, but documents are sent by mail."

Legal Requirements for IT-Based Important Matters Explanation

The requirements for IT-based Important Matters Explanation as defined by the Ministry of Land, Infrastructure, Transport and Tourism are as follows.

1. Environment capable of real-time bidirectional communication: Using a video conference system, both the Certified Real Estate Transaction Specialist and the borrower must be able to send and receive audio and video
2. Advance delivery of the Important Matters Explanation document: The document must be sent by the day before the IT-based explanation so that the borrower can review the content in writing (or by electronic means)
3. Presentation of Certified Real Estate Transaction Specialist license: Before starting the IT-based explanation, the specialist must display their license on screen so the borrower can verify the license number and photograph
4. Ensuring quality of video and audio communication: In case of communication problems, the explanation must be paused and reconnected after confirming the situation

Flow of IT-Based Important Matters Explanation — From Application to Contract Conclusion

Step 1: Express Your Desire for IT-Based Explanation

When applying for a property or after a viewing, inform the real estate company, "I would like an IT-based explanation." Not all real estate companies support IT-based explanations, so advance confirmation is necessary. Some small local real estate companies may not offer this service.

Step 2: Advance Receipt of the Important Matters Explanation Document

By the day before the IT-based explanation date, the Important Matters Explanation document will be sent. Whether it's delivered electronically (PDF) or by mail depends on the company. Be sure to review the content by the day before and make a list of questions. This is extremely important preparation to make effective use of the day's explanation.

Step 3: Prepare Communication Environment and Equipment

Prepare the following equipment and environment.

• •Internet connection (wired LAN or stable Wi-Fi)
• •PC, smartphone, or tablet with camera and microphone
• •Video conference tool specified by the real estate company (Zoom, Teams, Google Meet, LINE, etc.)
• •A quiet place (environment where audio is easy to hear)

If communication is unstable, the explanation may be interrupted, and in the worst case, in-person re-implementation at a later date may be necessary. It is recommended not to rely solely on smartphone mobile networks.

Step 4: Conduct the IT-Based Explanation

After the Certified Real Estate Transaction Specialist enters the video conference, the presentation of their license is presented first. The explanation then proceeds according to the Important Matters Explanation document. The time required is generally 30 to 60 minutes.

Ask questions actively. You have the right to ask questions just as you would in person. For parts you don't understand, feel free to say, "Please explain that again."

Step 5: Sign and Stamp Documents or Use Electronic Signature

After the IT-based explanation, sign and stamp the rental agreement and Important Matters Explanation document (or use electronic signature). If documents are sent by mail, the typical process is to receive them first, sign them, and return them. With companies using electronic contract services (GMO Sign, DocuSign, etc.), the process can be completed entirely online.

Key Points of Important Matters to Confirm in Advance

The Important Matters Explanation document contains many items, but especially pay careful attention to the following points.

Matters Regarding Building and Equipment

• •Presence or absence of inspection completion certificate (proof of compliance with Building Standards Law)
• •Presence or absence of asbestos survey
• •Presence or absence and results of seismic diagnosis
• •Status of equipment (whether air conditioning and hot water heater are to be removed or installed after removal)

Matters Regarding Contract Terms

• •Contract period and advance notice period for termination
• •Presence or absence and amount of renewal fee
• •Scope of restoration to original condition upon move-out and special agreement terms
• •Scope of repairs borne by the borrower

Matters Regarding Costs

• •Amount of security deposit and settlement conditions
• •Purposes of maintenance fee and common service fee
• •Terms and costs for using a guarantor company

Benefits and Precautions of IT-Based Important Matters Explanation

Benefits

• •Savings in transportation costs and travel time: Multiple visits to the real estate company become unnecessary
• •Recording preservation: By keeping a recording of the video conference (with mutual consent), you can later confirm whether the explanation was received
• •Multiple household members can participate from different locations: Future housemates or guardians can participate from their respective locations

Precautions

• •Be sure to obtain and review the Important Matters Explanation documents by the day before (avoid doing it on the day itself)
• •Keep the staff member's phone number on hand in case of communication troubles
• •If unfamiliar with electronic contracts, you can request to use mailed documents for the procedures

Summary — Expanding Rental Options with IT-Based Important Matters Explanation

With the spread of IT-based explanations, searching for a room from a remote location and rental contracts for busy people have become significantly smoother. If you prepare with an understanding of the legal requirements and implementation flow, you can receive an explanation of the same quality as in-person.

When relocating or transferring from a distant location, or when a newcomer from abroad rents for the first time in Japan, choosing a real estate company that offers IT-based explanations can significantly reduce the burden of contract procedures. When contacting a real estate company, it is recommended to confirm first by asking, "Do you offer IT-based Important Matters Explanation?"

A guide for foreign nationals, returnees, and non-Japanese citizens unfamiliar with Japanese, covering how to find English-friendly real estate companies, how to use multilingual rental portals, and key terminology and precautions when signing contracts.