What Happens When Your Tenant Decides to Move Out?

Most tenants in Japan tend to rent housing for a long term to avoid bearing various fees and costs involved in renting a new property as listed below.

  • Deposit to the new landlord: around 0~1 month rent
  • Key money to the new landlord: around 0~-1 month rent
  • Fire insurance
  • Agency fee: 1-month rent + tax
  • Key replacement fee: around JPY20,000
  • Moving cost: around JPY100,000 yen for a single residential unit in Tokyo
  • Moving cost: around JPY100,000 yen for a single residential unit in Tokyo

In addition to the above, tenants sometimes are also asked to pay a deposit to be used for the cleaning fee when they move out, especially in the case when the general tenant deposit is not required.

Next, we are going to briefly introduce the usual process of ending the lease agreement in Japan, and how WealthPark, as a Property Manager, supports overseas property investors throughout the process. Please note that the actual process may vary depending on the lease agreement.


Step 1. Confirmation of the Last Day of Tenancy

The lease agreements usually automatically renew unless there is a termination notice. If the automatic renewal is not stated in the agreement, WeathPark will send a lease renewal notice letter to the tenant on behalf of the landlord about 2 months in advance to confirm whether the tenant wants to continue to rent or not. After receiving the renewal notice letter, if the tenant wants to end the lease, he/she needs to reply to us when the last day of the tenancy will be.

The notice period is at least 1 month before the property is vacated. For example,
if the property is vacated on 4/25, the tenant should send the notice before 3/25. Therefore, the tenant usually still has to pay one month’s rent after giving the notice. Suppose the lease term is until 4/30, if the last tenancy date is confirmed to be 4/25, then the last rent, including asset management fee, will be paid on a pro-rata basis from 4/1 to 4/25.

As a side note, in some parts of Japan, such as the Kanto region, tenants usually pay landlords “lease renewal fees” as an additional income for the landlord. Part of it then becomes our lease renewal service fees.

Step 2. Property Vacating

The tenant needs to vacate the property, clear out all furniture and household appliances before the lease expires.

Step 3. Property Handover

On the last day of tenancy, WealthPark’s property manager will personally visit the property with the tenant to check the condition of the property, take pictures and report to the landlord whether there are any damages. If there are any damages, the responsibility for the damage will be clarified in accordance with the lease agreement. The general principle is that the landlord is responsible for natural damage, and the tenant is responsible for artificial damage.

Tenants who have lived for more than 6 years may argue that things that have been used for many years are naturally damaged for sure. Meanwhile, tenants who have lived for 6 months may claim they have not lived for a long time so they are not responsible for wear and tear and the cleaning should not be costly. We will handle all these negotiations with tenants on behalf of landlords.

Step 4. Cleaning Fee Settlement; Pre-tenancy Touch-up

After the property handover, WealthPark will obtain the cleaning quotation from the cleaning company and send the invoice to the tenant in 1~2 months. Upon tenant’s confirmation, we will deduct the cleaning fee from the deposit and return the remaining amount to the tenant.

Prior to the rental listing, we also provide pre-tenancy touch up service for landlords. Quotations usually take 1~2 weeks and the touch-up work usually takes 2~4 weeks.

For commercial properties, the process might be slightly different. For example, the pre-tenancy touch-up may not be required before leasing a commercial property. Yet after all it is still subject to the lease agreement.

WealthPark is a real estate technology company that provides online and offline asset management services for overseas investors with properties in major cities of Japan, including Tokyo, Osaka, Yokohama, Nagoya, Kyoto, Fukuoka, and Sapporo.
WealthPark partners with real estate brokers and technology companies in order to provide investors with comprehensive asset management and property transaction services.
WealthPark will continue to expand its digital platform to create and improve user experience.

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