Summer is a wonderful time to enjoy Japan. The mountains, the ocean, the beautiful “inaka” or countryside where time seems to have stopped. It’s a good time also to thank God for the simple things that make life in Japan so special — telephones that work, trains that run on time and people that bring your lost bag back before you even realized you had lost it . . .
We have a question this week from reader Mark, who asks: “Do you have any information on apartment rental renewals fees (“koshinryo”)?
“The real estate agent that I rent my apartment through wants me to pay a renewal fee every two years (70,000 yen as an agent fee, 21,000 yen for insurance, 20,000 yen guarantor fee; making a total of 111,000 yen).
“I have spoken to the Japanese Tenants’ Association and Matsudo City Hall Ward Office, who both say that if the renewal fee is stipulated in my original contract then I should pay it.
“I thought my ward office would be able to direct me to the correct department of government to get the truth but they could only tell me they didn’t know.
“I have been in my apartment for four years. I paid the fee two years ago but since then I have read in The Japan Times an article titled “Daylight Robbery — and we take it” by Philip Brasor, which states that even if the original contract stipulates a renewal fee I don’t have to pay it.
“The Kyoto court sided with a tenant who refused to pay it and the Tokyo municipal government has also adopted a policy to discourage it. I want to know if, by law, I have to pay the renewal fee. If I don’t pay it, I want to be sure I have all the facts if I have to go to court. I’ve spent three months on this.”
Attorney Watanabe tells us the important thing remains whatever your contract says. If your contract says you must pay a fee every two years to renew your contract, then you are legally bound to do so.
If you go to court, you will likely be held to the agreement you have signed.
Another view comes from a real estate agent, Mr. Yamaguchi, who said the renewal system is a very market-based situation. When the economy is tough, people can often negotiate contracts without a renewal fee. When things get better the fee grows.
If you are in a contract and you do not want to pay the renewal fee, you can talk with the owner and, in many cases, can negotiate to have it reduced, paid over time or, in some cases, removed, he says.
When you are beginning a rental contract you can include the fact that you do not want to pay a renewal fee. Once you have agreed to pay the fee, though, you are bound by it.
There is no law that requires that you pay a renewal fee, but if you have previously agreed to pay the fee, you are bound to do so. If you have not agreed to do so and reference to the fee is not included in your contract or lease, you are not legally bound to pay.