Short-Term Rental and Airbnb Bans Are Surging—The Risks of Unauthorized Subletting in Rental Contracts and How to Use Them Legally
Since the Housing Accommodation Business Law took effect, over 70% of rental properties prohibit short-term rentals. This guide thoroughly explains the real risks of eviction and liability claims from contract violations, and the conditions for legally operating short-term rentals.
The Growing Ban on Short-Term Rentals and Airbnb in Rental Properties
Since the Housing Accommodation Business Law (Minpaku New Law) took effect in 2018, condominium management associations and rental property owners have accelerated their efforts to regulate short-term rentals. According to surveys by the Ministry of Land, Infrastructure, Transport and Tourism since 2024, approximately 70% of condominiums and rental apartments prohibit short-term rentals through their management rules or special contract clauses—a significant increase from the 30% when the law was first implemented in 2018.
What renters need to be aware of is that the term "short-term rental ban" is much broader than one might assume. The prohibition covers not only listing a room on Airbnb or Jalan, but can also apply to lending a room to friends free of charge. Depending on how the contract is worded, you could face eviction.
The Relationship Between "Subletting Prohibition" Clauses in Rental Contracts
Most rental contracts explicitly prohibit "unauthorized subletting." Short-term rentals (charging third parties for accommodation) are legally considered a form of subletting, so doing so without the landlord's permission constitutes a contract violation. The Borrower-Lessor Act requires the landlord's consent for subletting (Article 612), and unauthorized subletting can be grounds for contract termination.
Court precedents hold that a contract can be terminated unless there are "extenuating circumstances that would negate a finding of breach of trust." However, because short-term rentals involve repeated, ongoing, profit-making activity, such "extenuating circumstances" are rarely recognized. There are indeed multiple court decisions that have upheld eviction on these grounds.
Whether the contract explicitly prohibits short-term rentals or contains only a general subletting prohibition clause, paid short-term rentals are almost always interpreted as a contract violation.
Risks of Operating Short-Term Rentals in a Rental Property
①Contract Termination and Eviction
The biggest risk is contract termination. Discovery typically happens when the management company or landlord notices suspicious coming and going, receives complaints from neighbors, or finds the Airbnb listing. Once discovered, there is little grace period, and you may be ordered to vacate immediately.
②Increased Restoration Costs
Rooms used by many different guests experience wall damage, carpet stains, and equipment wear more quickly than normal, resulting in higher restoration to original condition costs at move-out. Any wear beyond normal aging will be the tenant's responsibility.
③Liability Claims
If guests cause problems (noise complaints, theft, property damage), the tenant can be held liable. In case of fire, standard fire insurance often does not cover damage incurred during short-term rental use, creating a risk of substantial liability claims.
④Violation of the Housing Accommodation Business Law
Operating short-term rentals for more than 180 nights per year without registering with the prefecture can result in fines of up to one million yen for violating the Housing Accommodation Business Law.
How to Find Properties Where Short-Term Rentals Are Permitted
If you want to legally operate short-term rentals through a rental property, the following conditions must all be met:
Written consent from the landlord: Verbal agreement is insufficient; you need written documentation such as a special clause or memorandum
If a condominium, approval from the management association: Individual landlord approval is insufficient if the management rules prohibit short-term rentals
Registration with the prefecture under the Housing Accommodation Business Law
Enrollment in appropriate insurance (such as short-term rental-specific insurance)
In practice, obtaining approval from both the management association and the landlord is not easy. If your goal is to operate short-term rentals, it is more practical to look for properties that explicitly allow them, such as single-family homes for rent.
Key Points Tenants Should Know
Even if you don't intend to operate short-term rentals, there are important points to understand.
When a Neighboring Unit Is Being Used for Short-Term Rentals
If a neighboring unit or adjacent floor in your rental property is being operated as a short-term rental, noise, security, and hygiene issues may arise. In such cases, you can notify the management company, and the landlord can ask the short-term rental operator to address the problem.
How to Confirm During Viewings
Asking "Are short-term rentals prohibited in this building?" during your viewing gives you insight into the building's management standards. If a building officially prohibits short-term rentals but residents are operating them anyway, it may indicate lax management and higher risk of problems after you move in.
In Summary: Short-Term Rental Prohibition Is a Basic Rental Rule
Operating unauthorized short-term rentals in a rental property carries three types of risk: legal violations, contract breach, and disputes with neighbors. Starting with a casual desire for extra income can lead to serious consequences including eviction, liability claims, and fines.
Conversely, if you want to engage in short-term rentals with your current home, your only options are to choose a property with legal short-term rental permissions or obtain formal written agreement from your landlord. Short-term rental regulations in the rental market are likely to become even stricter in the future, so it is important for tenants to understand the rules correctly.
For foreign nationals searching for rental properties in Japan. We provide practical guidance on selecting English-speaking real estate agencies and important points to watch for when signing a lease.
