Last February, the Tokyo municipal government adopted a policy to discourage key money reikin and lease renewal fees koshinryo in rental agreements. The policy is long overdue since key money and renewal fees are tenant-gouging practices sanctioned by nothing more than habit.
The gratuitousness of these landlordly traditions was exposed in Asahi Shimbun's "Gimon Kaiketsu Monjiro ( Monjiro the Problem Solver)" column recently. A reader asked what was the purpose of the renewal fee, usually equivalent to one month's rent, that he has to pay every two years when he signs a new contract for his apartment. Asahi called a real estate agent for an answer, which turned out to be disarmingly simple: There is no reason, it's just "a custom." A different realtor explained that the custom was established after World War II, when the supply of housing couldn't keep up with the huge demand.
Rental housing is no longer scarce, but the practice remains in place in the Kanto region and Kyoto. Utilizing what can only be called a perverse sense of journalistic fair play, the Asahi column goes out of its way to conjure up a plausible explanation for the custom (something about protecting the landlord's investment), but in the end it's clear that tenants cannot be forced to pay the renewal fee. In May, the Kyoto district court sided with a tenant who refused to pay it, even though it was stipulated in his original rental agreement.