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The security deposit system is one of the most common systems in the Japanese rental market. Under this system, tenants deposit a certain amount of money to the landlord when they sign a rental contract. This security deposit is intended to cover future non-payment of rent or damage to the property. When the tenant moves out, the remaining amount is refunded after deducting damage and cleaning costs. No interest is charged on the refund!

So, it is normal that only a portion of the security deposit is refunded! Moreover, the refund of the security deposit is usually made by transfer to the tenant's account about one month after the management company staff checks the condition of the property at the time of moving out in the presence of the tenant after the move-out is completed and the tenant signs a written agreement regarding restoration to its original condition.

If you leave Japan soon after moving out and do not have a Japanese bank account, it may happen that you cannot receive the refund of the security deposit. In such cases, it is a good idea to consult with the agency that took care of you when you moved in. In such cases, an agency specializing in foreign residents should be able to provide a good solution.

In addition, it is not uncommon for the tenant and the landlord to have trouble over the cost of restoring the apartment to its original condition when moving out. As a tip to avoid problems, we recommend that you always describe in detail any scratches or stains that were already there when you moved in on the property condition check sheet at the time of moving in, and take pictures and keep them in a safe place! Furthermore, in Tokyo, the Tokyo Metropolitan Government has established rules regarding the restoration of properties to their original condition by ordinance. This is called the "Tokyo Rules," and the lessor cannot require the tenant to restore the property to its original condition in violation of the "Tokyo Rules! You should always be given a written document describing the "Tokyo Rules" when you sign a contract to move in, so be sure to keep it with you until you move out!

A security deposit is paid at the time of contract, and is usually equivalent to one to two months' rent. However, there are some properties that do not require a security deposit, so tenants who wish to keep initial costs low should try to find a property that does not require a security deposit. However, it should be noted that properties that require a security deposit are more common, so if you only look for properties that do not require a security deposit, your options will be greatly reduced.

Although the above explanation may give you a bad impression of a security deposit, please keep in mind that a security deposit is a way for a tenant to demonstrate his/her financial credibility to the landlord and the rent guarantee company! In the Japanese rental housing market, credit screening of tenants is strictly enforced. The higher the amount of the security deposit in a lease agreement, the less likely the rent guarantee company will be able to check the tenant's creditworthiness.

We hope you can see that the security deposit system has a certain rationale for both the landlord and the tenant. We will continue to provide useful information for people living outside of Japan who are looking for a rental property in Japan.

please check our blog if you are looking for a rental property in Japan!


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