Licensed Real Estate Transaction Professionals in Rental Contracts—Complete Guide to Important Disclosures and Signing

When signing a rental lease, have you ever met someone who introduces themselves as a "Licensed Real Estate Transaction Professional" and conducts an important matter disclosure? These professionals hold a nationally recognized credential under the Real Estate Brokerage Law and have the exclusive authority to perform certain duties in real estate transactions.

The LRTA exam is taken by approximately 200,000 people annually, with a pass rate of 15–17%—making it a highly competitive credential. The exam covers a broad range of topics including the Real Estate Brokerage Law, Civil Law, the Lease and Tenancy Law, the Building Standards Law, and tax regulations, testing comprehensive legal knowledge about real estate transactions. Applicants who pass must register with their prefectural governor and receive an LRTA certificate before they can officially use the title "Licensed Real Estate Transaction Professional."

Real estate agencies and brokerage firms are required by law to employ at least one LRTA for every five employees. In fact, firms cannot operate as real estate brokers without having at least one LRTA on staff.

The Three Exclusive Duties of Licensed Real Estate Transaction Professionals

Licensed Real Estate Transaction Professionals have three legally defined exclusive duties under the Real Estate Brokerage Law. These duties are prohibited by law from being performed by anyone without the credential, and violations result in suspension of operations or license revocation.

1. Important Matter Disclosure (Article 35 Duty): This involves explaining important matters about a property and rental agreement in writing before the contract is executed. The professional must provide and verbally explain an "Important Matter Disclosure Document" covering 33 legally required items (for rental properties), including property location, area, and structure, zoning restrictions under the Urban Planning Law, building equipment and condition, rental terms (security deposit, key money, maintenance fees), and provisions regarding termination and renewal. The LRTA must present their credential certificate during this explanation.

2. Signature on the Important Matter Disclosure Document (Article 35 Document): By signing the Important Matter Disclosure Document, the LRTA takes responsibility for the accuracy of its contents.

3. Signature on the Rental Agreement (Article 37 Document): The LRTA signs the rental agreement (Article 37 document), taking responsibility for confirming that all legally required provisions are accurately stated.

The Important Matter Disclosure Process in Rental Contracts

Important Matter Disclosure by an LRTA occurs after property viewings and applications are completed and tenant screening has passed, but before the contract is executed. Understanding this process precisely helps deepen your grasp of the overall rental agreement process.

1. Advance Delivery of Documents: The Important Matter Disclosure Document and a draft rental agreement are provided either on the day of signing or beforehand. It's advisable to receive them before the signing day if possible, so you can review the contents carefully.

2. Verification of the LRTA Certificate: At the start of the disclosure, the professional is obligated to present their LRTA certificate (a photo ID card). If it's not presented, you may request to see it.

3. Reading Through Important Matters: The LRTA reads and explains the Important Matter Disclosure Document. This covers property registration information, restrictions under the Urban Planning Law and Building Standards Law, the status of utilities (electricity, gas, water), the presence and condition of equipment, rental terms, rules regarding termination, renewal, and move-out procedures.

4. Opportunity for Questions: Always ask about any points you don't understand during the explanation. The LRTA has a duty to answer your questions honestly. Pay particular attention to "the scope of your responsibility for restoration to original condition when moving out," "the notice period for termination," and "whether a renewal fee is charged and in what amount"—these are common sources of disputes later on.

5. Signature (or Electronic Signature): Once you've reviewed and understand the contents of the Important Matter Disclosure Document, you provide your signature (or electronic signature). This establishes the legal fact that you received the disclosure.

Key Points Tenants Should Confirm During Meetings with Licensed Real Estate Professionals

The Important Matter Disclosure meeting is your one official opportunity as a tenant to directly clarify anything unclear. Make sure to confirm matters you cannot claim ignorance about later.

Restoration Costs at Move-Out: The guideline from the Ministry of Land, Infrastructure, Transport and Tourism states that "normal wear and tear is the landlord's responsibility," but special provisions may place these costs on the tenant instead. Confirm the specific details of any special provisions (such as tatami mat replacement or complete wallpaper replacement), and ask whether "the special provisions meet valid requirements."

Notice Period for Termination: When moving out, confirm how many months' notice is required. The standard is 1–2 months, but some properties require 3 months. If you miss the deadline, you may have to pay extra rent.

Equipment Failure Response: Confirm the contact information and procedures for when equipment like air conditioners, water heaters, or ventilation fans break down. The landlord is generally responsible for repairs (if they own the equipment).

Exclusion Clause for Antisocial Forces: This clause is typically included, but understanding it gives you peace of mind.

Pets, Musical Instruments, and SOHO Use: Confirm the specific scope of prohibited activities. For instance, if musical instruments are prohibited, you can ask about electronic pianos at this stage.

The Rise of IT Disclosure (Online Important Matter Disclosure)

The 2021 amendment to the Real Estate Brokerage Law officially permitted Important Matter Disclosure via video call (using Zoom, Teams, and other web conferencing tools) in addition to face-to-face meetings. This IT Disclosure has rapidly become commonplace for properties at a distance, pre-contract arrangements from overseas, and non-contact measures during the pandemic.

Even in IT Disclosure, legal requirements equivalent to face-to-face meetings must be met, including on-screen presentation of the LRTA certificate, advance delivery of documents, and real-time two-way dialogue. Using electronic signature services (such as GMO Sign or CloudSign) allows the entire process—document delivery, signature, and return—to be completed online.

What to Do If You Have Complaints or Encounter Illegal Conduct

If there are problems with an LRTA's disclosure (insufficient explanation, false statements, failure to present the certificate, etc.), you can contact the following:

Prefectural Government Office (Real Estate Brokerage Division): The supervising authority for real estate brokers is the prefectural governor. Serious violations are subject to suspension of operations or license revocation.

Real Estate Brokerage Associations: If the agent belongs to an association, you can file a complaint. These organizations also function as ADR (Alternative Dispute Resolution) bodies.

Consumer Affairs Center (188): Disputes involving LRTA disclosures are also handled by the Consumer Affairs Center.

By accurately understanding the role of Licensed Real Estate Transaction Professionals in rental contracts, you'll be better equipped to ask pointed questions during important matter disclosures. With the spirit of "it's better to ask and feel assured than to ask later and regret it," make the most of your contract meeting.

With IT-based important matter disclosure (leveraging technology for required explanations) and online contracts, rental agreements can now be completed entirely remotely. Real estate professionals explain everything from how these systems work to key usage tips and important precautions.