Rental Lease Renewal: Key Points and Checklist | Renewal Fees, Condition Changes, and Renewal Refusal
We explain the key points to confirm as your rental lease renewal date approaches. This guide covers renewal fee rates, timing for rent negotiations, contract condition changes, and rules on renewal refusal.
The standard contract period for a typical rental lease (standard lease) is 2 years. When the contract period ends, a "renewal" procedure is necessary, but while it may seem like a simple continuation, it often involves additional costs and condition changes. It is important to review your lease contract before renewal and prepare accordingly.
There are two main types of rental leases: "standard (indefinite) leases" and "fixed-term leases," which are handled fundamentally differently when it comes to renewal.
•Standard (indefinite) lease: Landlords cannot refuse renewal without valid reasons. This arrangement favors tenants.
•Fixed-term lease: The contract generally ends when the term expires. Renewal requires landlord consent, and re-contracting on the same terms is not guaranteed.
You can determine which type of lease you have by checking the title or special provisions section of your contract. If "fixed-term building lease agreement" is clearly stated, it is a fixed-term lease. Many people do not receive sufficient explanation when signing, so be sure to confirm this now.
Renewal Notice Timing and the Mechanism of "Statutory Renewal"
In a standard lease, between 1 year and 6 months before the contract expires, the landlord or tenant must notify the other party that they will not renew or will renew with condition changes. If no notice is given by either party within this period, the lease automatically continues under "statutory renewal" with the same conditions as before.
Statutory renewal has the following characteristics:
•The contract term becomes "indefinite" (no longer fixed at 2 years)
•In most cases, no renewal fee payment obligation arises (depending on what is stated in the contract)
•The requirement for valid reasons for landlord termination remains unchanged
Property management companies typically send "renewal notices" 3–4 months before contract expiration. When you receive the notice, promptly confirm the following so you can express your intentions within the deadline:
•Whether the rent or maintenance fee will change after renewal
•The renewal fee amount and payment deadline
•Any changes to contract terms (additions or deletions of special provisions, etc.)
•The deadline for returning renewal documents
If you neglect the renewal notice, you may end up renewing under unfavorable conditions or cause problems. Make it a habit to check the contents immediately when you receive it.
Renewal Fee Rates, Payment Obligations, and Guarantor Company Renewal Costs
Renewal fees vary considerably by region and property; they are not uniform nationwide.
Regions where renewal fees are common: In Tokyo, Kanagawa, Saitama, Aichi, and similar areas, renewal fees of approximately "one month's rent" are often customarily set. Similar customs remain firmly entrenched in Kyoto.
Regions with little or no renewal fees: In Osaka, Hokkaido, the Tohoku region, Kyushu, and similar areas, many properties do not charge renewal fees.
Renewal fee payment obligations are valid only if clearly stated in the lease contract. A 2011 Supreme Court ruling determined that renewal fee clauses themselves do not violate the Consumer Contract Law. However, if the renewal fee is not stated in the contract or the amount is unclear, you may be able to refuse payment. You do not need to comply with fees mentioned for the first time in a renewal notice or requested verbally only; always verify against your original lease contract.
Renewal costs are not limited to renewal fees alone. The following are commonly overlooked costs:
•Renewal administration fee: An administrative fee charged by the management company, typically a few thousand to several tens of thousands of yen
•Guarantor company renewal fee: If you use a rent guarantee company, a renewal fee of approximately ¥10,000–20,000 may be charged annually or every 2 years
•Fire insurance (tenant liability insurance) renewal premium: Usually renewed every 2 years, typically ¥10,000–20,000
Combined, these costs can amount to 2–3 months' rent at the time of renewal. Be prepared financially in advance.
Key Points for Negotiating Rent at Renewal
Renewal timing is one of the few opportunities to review your current rent. Negotiations are more likely to succeed in the following situations:
•Your current rent is higher than similar nearby properties
•You are recognized as a long-term tenant (3+ years) with low vacancy risk
•The building shows notable age or equipment deterioration
•There are many vacancies nearby and the landlord wants to prevent your departure
How to negotiate
Research comparable rents for similar properties in the area using rental portals like SUUMO or HOME'S to prepare specific evidence
Politely request in writing or verbally: "There are similar properties in the neighborhood at around ¥XX,XXX. Would you consider revising the rent as we approach renewal?"
Rather than asking for a steep drop all at once, start negotiations aiming for a 3–5% reduction from your current rent
If a rent reduction is difficult, propose alternative conditions such as reducing the renewal fee or performing maintenance on shared facilities
Rent negotiation is not a right but a "request." Approaching with gratitude for your long tenancy and a respectful attitude increases your chances of success. Conduct negotiations in writing (email is acceptable) as well as verbally and keep records to prevent future disputes.
Checklist to Confirm at Renewal
When you receive the renewal notice, check all of the following items:
Fees and Costs
•[ ] Verify the renewal fee amount and payment deadline against your lease contract
•[ ] Confirm whether a renewal administration fee applies and its amount
•[ ] Verify whether a guarantor company renewal fee applies
•[ ] Confirm the expiration date and renewal process for fire insurance (tenant liability insurance)
Contract Terms
•[ ] Verify that rent and maintenance fees have not changed
•[ ] Compare the old and new contracts to check for any condition changes or new special provisions
•[ ] Confirm that prohibitions and restoration to original condition requirements have not changed
•[ ] Verify whether a change to your joint guarantor is required
Equipment and Room Condition
•[ ] Request in writing any repairs or replacements of aging equipment (water heater, air conditioning, ventilation fan, etc.)
•[ ] Report any concerns (water leaks, condensation, pest issues, etc.) to the management company before renewal
•[ ] Consult if you need additional keys or key changes
Renewal is a valuable window for negotiation with the management company. You can increase the likelihood of getting requests addressed by combining maintenance requests and issue reports as "renewal conditions."
Procedures and Precautions When Choosing Non-Renewal or Moving Out
If you choose not to renew and move out, you must provide notice to cancel within the notice period specified in your lease (typically 1–2 months before). For your protection, submit written notice (a cancellation notice) rather than verbal notice and obtain a receipt. If you miss the notice period, you may be charged rent for the shortened period.
While tenants have relatively freedom to terminate, landlords must have valid reasons to refuse renewal. Under the Bona Fide Lease Law, landlords cannot refuse renewal without one of the following reasons:
•Demolition or rebuilding due to building deterioration
•The owner or their family needs to occupy the property
•Serious tenant breach of contract (such as prolonged non-payment of rent)
"I want to change to a new tenant" or "I want to raise the rent significantly" alone do not count as valid reasons. If your landlord suddenly demands you move out, first verify the legal grounds and consult a lawyer or consumer center if needed.
For fixed-term leases, while the tenant generally must vacate at the end of the term, if the landlord fails to send notice of termination between 1 year and 6 months before expiration, the landlord loses the right to claim termination (Bona Fide Lease Law, Article 38). If you want to continue a fixed-term lease, always verify whether notice was sent and when.
Renewal is an important milestone that occurs every 2 years. Take full advantage of this opportunity to confirm costs, negotiate terms, and request equipment maintenance all at once, ensuring a more comfortable and satisfactory living environment.
