A shock wave hit the real estate industry when the Kyoto District Court ruled July 23 that an apartment tenant did not have to pay a fee to renew his lease, a fee landlords levy on average every two to three years.

This "koshin-ryo" charge demanded by landlords is an old custom in many parts of Japan. Many foreigners are surprised when asked to pay it because this custom does not exist in their home countries.

While real estate agencies try to play down the impact of the ruling because it does not automatically apply to all similar disputes, lawyers believe this will set a precedent for renters to refuse to pay landlords a fee they regard as over the top.