“Tokyo Reader” on odd rental contracts for apartments: “lease” vs. “loan for use”? Plus Kyoutaku escrow for disputes
Posted by debito on April 27th, 2009
Hi Blog. Turning the keyboard over to “Tokyo Reader”, who tells an interesting tale about how people are playing with contracts regarding residences for NJ, and how rents can be renegotiated if the asking price for new entrants in your building (or area) is lower than the current rent you’re paying. His redacted housing contract at the very bottom. But first, a KTO article from Michael Fox regarding Kyoutaku, the government escrow system which can hold your rent while a dispute with your landlord is in progress. Arudou Debito in Sapporo
Rent Adjustment Problems
by Michael Fox, courtesy of the author
Published in Kansai Time Out March 2009
Can anything be done if your rent is increased unfairly? Or what if people moving into your building are paying less? Good news, there is a designated process for alleviating overcharges.
First, you should negotiate face to face with your landlord. Both parties should bargain in good faith. If your rent is reduced sufficiently, then the problem is solved.
If negotiation fails, the next step is to deposit the money into escrow (kyoutaku 供託）with the local government. The papers for such procedure can be obtained from the Legal Affairs Department (Houmukyoku法務局) of your city/town office.
If you start kyoutaku, you may once again negotiate with your landlord face to face. If no conciliation is reached, the next step is civil arbitration (minji-choutei). The arbitrator is an ordinary citizen who listens to both sides and encourgages a conciliation. You need not employ a lawyer, and you may bring a translator to help with language concerns. In the unlikely event that a conciliation is not reached, the issue may be continued in open court.
Depositing rent into escrow is also recommended for the following situations:
1) Several different people request the rent and you cannot decide whom to pay.
2) Your landlord dies, and you do not know whom to pay.
3) You want to pay the rent but it is refused by the party designated to receive it.
It is important to pay your rent every month. As it is extremely difficult to evict tenants in Japan, the rent may be refused because the landlord is looking for a way to boot you out. Even if your building is sold, and the new owner wants it demolished, you are entitled to a consolation payment, which may very well be equivalent to one or more year’s rent.
For more information, contact your local Legal Affairs Bureau. Many locales offer assistance in foreign languages.
Michael H. Fox
Dear Debito.org. Here is one for the blog community.
For over a year now, I have rented an apartment in Tokyo through a management company I will call “HT”.
The building I rent in has eight different 1K apartments. For many months last year, a number of the rooms remained vacant. This was easy to tell based off things like lighting, the level of refuse in the garbage area, and even electric meters whose dial seldom moved. Plus, it was rare to see or hear anyone enter or leave the building, in which all apartments exit to the outside.
For what I know, these may be rented out on a monthly mansion basis, in the style of a Leopalace 21. This is the method where a tenant pays a lump-sum amount to secure the apartment for a specific time period. There are usually no additional fees, even for utilities. It is an “all-in” pricing, and often with a discount for signing up a larger number of months.
I am fairly confident that at least one other resident has a lease-style arrangement. This would be the standard one in Japan, where an original lease is contracted for a term of many months, where a security deposit is given, and the rent paid on a monthly basis. Sometimes a “key deposit” is involved. The key deposit is said to be additional rent paid at the beginning to help the landlord secure a profitable leasing in the event the tenancy ends early. But it’s not required to make a housing arrangement a lease in Japan.
Utilities appear to be included in the rent. The apartments are furnished.
I am currently in a dialogue with company HT. Over the winter, HT looks to have lowered rents on the 1K apartments. What used to be advertised as 150,000 yen a month is now 135,000 yen. (I say “used to be advertised” because there is some evidence that different parties are paying different rents, having nothing to do with a discount system.)
Since I had been paying the higher rent, I proposed paying the new advertised price. According to the Land & House Lease Law (“LHLL”), Article 32, a tenant can propose a rent reduction when there is evidence that rents in a given neighborhood have declined. The landlord may disagree and then a mandatory arbitration panel is supposed to decide the matter.
Company HT insists that my 1K is somehow special that it requires the higher price (150,000 yen). Funny is that when I moved into the building, there was no such tiered pricing.
Further, Company HT claims that my lease is not covered by the Land & House Lease Law, but rather is a “Loan for use” under Civil Code, Article 593.
I read that LHLL Article 28 stipulates that a lease over a period of time (several months) but less than a year, will be considered a lease with an indefinite period. Additionally, the LHLL requires six-months’ notice for a landlord to end the lease.
Apparently, a rental relationship that fits a “Loan for use” is governed by different terms. My suspicion is that a hotel room would fit this type of contract. And maybe the Leopalace system, since the entire rental arrangement seems to be made to fit.
But I don’t think that any landlord who decides to post a “Monthly Mansions” sign on the side of the building, and gets the occasional tenant, becomes one who can write a standard lease contract and then decide whether or not the Land & House Lease Law applies.
My original lease contract looks like, well, a lease. The initial term was for three months, and there was a one-month security deposit required. There is no mention of “Loan for Use”, Civil Code article 593, or anything else that would suggest that my lease is anything other than a lease. I have simply been paying rent monthly along the way.
There is one term that references a one-day eviction notice, but I think all landlord leases include this type of language regardless of what the actual law says.
And if for some reason Company HT were correct on “Loan for Use”, if I am paying the advertised price I fail to see where I should have to pay more. Is my 1K simply more valuable because I would have to move from it?