JAPAN INVESTMENT PROPERTY GUIDE
Provident Investment has prepared a guide to provide investors with some useful information when considering to purchase property in Japan
RENTAL DEPOSIT
When renting a room, landlords often require the tenant to pay a rental deposit or in Japanese "Shikikin" (敷金) at the time of contracting.
The rental deposit is paid by the tenant to the owner, and the owner holds the rental deposit in trust during the term of the lease.
The purpose for the rental deposit is to offset any monies owed to the landlord as a result of any potential tenant breach of their lease obligations either during or at the end of the lease term.
Monies owed primarily include: any late rents, restoration fees due to damages caused by the tenant, and any other fees or costs owed related to the lease.
For example:
(A) if the rental deposit is JPY50,000 and the tenant owes JPY30,000 in damages to the room:
The landlord will then refund to the tenant: JPY30,000 - JPY50,000 = JPY20,000 (Refund)
(B) if the rental deposit is JPY50,000 and the tenant owes JPY80,000 in late rent and damages to the room:
The landlord will keep the deposit in full and will request the tenant to pay the balance of: JPY80,000 - JPY50,000 = JPY30,000 (Shortfall)
(C) if the rental deposit is JPY50,000 and the tenant does not owe anything at the time of move out.
The landlord will then refund to the tenant the full deposit: JPY50,000 (Refund)
(D) if the rental deposit is JPY50,000 and the tenant owes JPY50,000 at the time of move out.
The landlord will then deduct the JPY50,000 owed from the deposit of JPY50,000, in such a case there will be no refund and no shortfall.
The rental deposit is paid by the tenant to the owner, and the owner holds the rental deposit in trust during the term of the lease.
The purpose for the rental deposit is to offset any monies owed to the landlord as a result of any potential tenant breach of their lease obligations either during or at the end of the lease term.
Monies owed primarily include: any late rents, restoration fees due to damages caused by the tenant, and any other fees or costs owed related to the lease.
For example:
(A) if the rental deposit is JPY50,000 and the tenant owes JPY30,000 in damages to the room:
The landlord will then refund to the tenant: JPY30,000 - JPY50,000 = JPY20,000 (Refund)
(B) if the rental deposit is JPY50,000 and the tenant owes JPY80,000 in late rent and damages to the room:
The landlord will keep the deposit in full and will request the tenant to pay the balance of: JPY80,000 - JPY50,000 = JPY30,000 (Shortfall)
(C) if the rental deposit is JPY50,000 and the tenant does not owe anything at the time of move out.
The landlord will then refund to the tenant the full deposit: JPY50,000 (Refund)
(D) if the rental deposit is JPY50,000 and the tenant owes JPY50,000 at the time of move out.
The landlord will then deduct the JPY50,000 owed from the deposit of JPY50,000, in such a case there will be no refund and no shortfall.
