legal contract_terms ai_generated true

AI tells a renter in Japan that upfront costs are just first month + deposit, like in the US/UK

ID: legal/key-money-shikikin-reikin

Also available as: JSON · Markdown
85%Fix Rate
85%Confidence
3Evidence
2024-01-01First Seen

Version Compatibility

VersionStatusIntroducedDeprecatedNotes
any active — — —

Root Cause

Japanese rental upfront costs typically total 4–6 months of rent: 敷金 (shikikin, security deposit, 1–2 months, returned minus damages), 礼金 (reikin, 'key money' gift to landlord, 1–2 months, NON-REFUNDABLE), first month rent, brokerage fee (1 month + tax), guarantor-company fee (0.5–1 month), fire insurance (~20,000 JPY/2 years), lock change (~15,000 JPY). Some foreigner-friendly agencies (Leopalace, Sakura House, GaijinPot) waive reikin and guarantor.

generic

Workarounds

  1. 92% success Budget 5–6 months of rent for move-in. Use foreigner-specific agencies (Sakura House, Metro Residence, GaijinPot Apartments) or no-reikin/no-shikikin 'zero-zero' listings (ゼロゼロ物件) — often slightly higher monthly rent but vastly lower upfront.

    Sources: https://www.mlit.go.jp/en/

  2. 90% success Use a guarantor company (保証会社) — many agencies bundle this automatically. Fee is one-time ~50-100% of monthly rent. Alternatively, monthly serviced apartments (Monthly Mansion) skip the system entirely but cost 2-3× a normal lease for equivalent space.

    Sources: https://www.mlit.go.jp/en/

  3. 75% success Move-out: request an itemized damage assessment (原状回復). Natural wear (wall discoloration from sun, faint marks) should be landlord-covered per MLIT guidelines. Scuffs, burns, stains deducted from shikikin. Disputes can go to the local consumer center (国民生活センター).

    Sources: https://www.kokusen.go.jp/ https://www.mlit.go.jp/en/

Dead Ends

Common approaches that don't work:

  1. Plan a Tokyo 100,000 JPY/month rental with a 200,000 JPY budget (first + deposit) 82% fail

    Actual move-in on a 100,000 JPY/month apartment: ~500,000–700,000 JPY (5–7 months rent-equivalent). Components: shikikin 100-200k (refundable), reikin 100-200k (gift), first month 100k, brokerage 100k+tax, guarantor fee 50-100k, insurance 20k, lock 15k. Sudden realization at contract signing is a common expat shock.

  2. Tell a foreigner they just need to fill out a rental application, skipping the guarantor system 80% fail

    Most Japanese rentals require a 保証人 (hoshounin, personal guarantor — Japanese national with stable income) OR a 保証会社 (hoshou-gaisha, guarantor company, ~0.5–1 month rent). Foreigners without a Japanese guarantor must use a guarantor company, and many landlords additionally refuse foreigners even with a company (the 'no foreigners' 外国人お断り clause is legal and common in older buildings).

  3. Expect to break the lease without penalty after 3–6 months like in the US 70% fail

    Japanese leases are typically 2-year renewable. Early termination often triggers: 1–2 month penalty fee + forfeit of shikikin for 'damages' assessed at move-out + possible cleaning fee. Mid-contract breakage with full refund requires documented landlord breach.