When entering into a rental contract in Japan, many foreign residents feel anxious about the contents of the contract. Understanding legal documents written in Japanese is not easy, even for those proficient in the language. Here we explain 10 key points that are essential to understand in rental contracts.
Point 1: Contract Period and Renewal
Japanese rental contracts typically use a "standard lease" (futsu shakuya keiyaku) with a 2-year contract period. At the end of the contract period, renewal is possible, and a renewal fee of approximately one month's rent may be required. Conversely, "fixed-term tenancies" have a set period and cannot generally be renewed. Be sure to confirm which type your contract is.
Point 2: Rent and Payment Method
Rent is typically paid in advance, with the following month's rent due by the end of the current month. Payment is usually made by bank transfer, though automatic account transfer may be specified. Late payment penalties may be charged if you miss the payment date.
Point 3: Maintenance and Common Area Fees
Separate from rent, "maintenance fees" or "common area fees" are required to maintain shared facilities in the building. These cover elevator maintenance, shared hallway cleaning, garbage area management, and similar services. When comparing properties, compare the total of rent plus maintenance fees.
Point 4: Deposit Return Conditions
Deposits are returned when you move out, but deductions may be made for repair costs. Importantly, "normal wear and tear from regular use" (deterioration from age and natural wear) should not be borne by the tenant. Based on the Ministry of Land, Infrastructure, Transport and Tourism's "Guidelines for Disputes over Restoration to Original Condition," fading of wallpaper from sunlight and natural wear of tatami mats are the landlord's responsibility. We strongly recommend taking photos of the room's condition when moving in.
Point 5: Prohibited Activities
Prohibited activities are specified in the contract. Common examples include pet ownership prohibition, restrictions on musical instrument playing, prohibition of oil heaters, and adding roommates without permission. Violations can result in contract termination, so be sure to confirm these restrictions before moving in.
Point 6: Notice Period for Moving Out
If you plan to move out, you typically need to provide written notice 1 to 2 months in advance. Even if you decide to move suddenly, you are still responsible for paying rent for the notice period. If you have plans to return home, plan your schedule accordingly.
Point 7: Obligation to Restore to Original Condition
When moving out, you must restore the unit to its original condition, but you don't need to restore everything. Tenants only bear the cost of damage caused by intent or negligence. For example, if you make a large hole in the wall, you pay for repairs. However, discoloration of wallpaper from sunlight is the landlord's responsibility.
Point 8: Early Termination Penalty
Some properties have "penalty fees" for early termination during the contract period. These are especially common in properties with zero down payment or free rent periods. If you plan to move out in the short term, pay special attention to this clause.
Point 9: Important Matter Explanation
Before signing, a licensed real estate agent will provide "important matter explanation" (jūyō jikō setsumei). This is a procedure required by law and covers building structure, equipment, surrounding environment, hazard map information, and more. Don't hesitate to ask questions if you don't understand something. Recently, online important matter explanations (IT setsumeikai) have become more common.
Point 10: Fire Insurance
Most rental contracts require tenants to purchase fire insurance (tenant's liability insurance). This covers damages to the landlord caused by fires or water leaks. Insurance premiums are typically 10,000 to 20,000 yen per year. While real estate agents may specify an insurance company, you can also choose your own.
With an understanding of these points, you can significantly reduce the risk of future problems. If you have concerns about contract terms, we recommend consulting with a multilingual real estate agent or using free legal consultation services.