Renewal vs. Non-Renewal: Managing Lease Expirations in Japan
In Japan, most standard residential leases run for two years and then either renew or terminate. As a landlord, how you handle the approach to lease expiration u2014 and what you communicate to the tenant u2014 has significant legal and practical consequences. The law is structured strongly in the tenant’s favor for ordinary leases, while fixed-term leases give landlords more options. Understanding both is essential for managing your portfolio sensibly.
How Ordinary Lease Renewals Work
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Under an ordinary lease (futsuu chinshaku keiyaku), the tenancy renews automatically every two years unless one or both parties give proper notice of termination. The notice requirements are asymmetric:
- For a tenant who wants to vacate at the end of a two-year term, one month’s notice is typically sufficient under standard lease terms (though some leases specify two months).
- For a landlord who wants to not renew u2014 to reclaim the property u2014 the legal standard is far more demanding. You must give at least six months’ notice, and you must have “just cause” (seitoujiyuu). Simply wanting the property back, wanting to sell it, or wanting a different tenant does not constitute just cause. The courts have repeatedly held that just cause requires significant need u2014 such as requiring the property for your own residence or that of a close family member u2014 and even then, landlords are sometimes required to pay substantial compensation to displaced tenants.
This asymmetry means that once a tenant is in under an ordinary lease and they want to stay, removing them is genuinely difficult. This reality should inform your initial tenant selection more than anything else.
The Renewal Process in Practice
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For ordinary lease renewals where both parties are happy to continue, the process is relatively straightforward. I contact tenants approximately three months before their lease expiration date u2014 both to give them adequate time to consider and to stay ahead of the formal notice period.
My renewal communication covers:
- An offer to renew on the same terms (or, if I’m requesting a rent adjustment, the proposed new amount with explanation)
- The renewal contract document for their review
- A request for confirmation of their intention within a stated timeframe (typically four to six weeks)
Renewal contracts in Japan typically involve a renewal fee (koushin ryou) of one month’s rent, paid by the tenant to the landlord, and a guarantee company renewal fee paid by the tenant to the guarantee company. Some landlords waive the landlord-side renewal fee as an incentive for good tenants to stay u2014 I’ve done this selectively when I have a tenant I particularly value and the market would make re-renting at the same price challenging.
Fixed-Term Lease Non-Renewal: The Cleaner Exit
If you’ve used a fixed-term lease (teiki chinshaku keiyaku), non-renewal is significantly more straightforward u2014 but there are still procedural requirements. For leases over one year, you must notify the tenant of the upcoming termination between six months and one year before the contract end date. If you miss this window, the tenancy may continue for a transitional period.
The notification must be in writing and should specifically state that the tenancy will end on the contract expiration date and will not be renewed. Even under a fixed-term lease, I prepare this notice carefully and often send it via a method that creates a delivery record (registered mail, or a signed receipt from the tenant).
If you want to offer continued occupancy after a fixed-term lease ends, you may enter a completely new fixed-term lease. This is not a “renewal” in the legal sense u2014 it’s a new contract. This distinction matters procedurally.
When a Tenant Won’t Leave After Non-Renewal
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A tenant who remains in the unit after a properly terminated lease u2014 whether a fixed-term lease that reached its end date or an ordinary lease terminated for just cause u2014 becomes an unauthorized occupant (fuho senkyo sha). In this situation:
- Send an immediate written demand for vacating with a firm deadline
- Contact a judicial scrivener (shiho shoshi) or attorney about formal eviction proceedings if the demand is ignored
- Document everything u2014 access to the unit, attempts at communication, all written notices
- Do not attempt to physically remove the tenant or their belongings, change locks, or cut utilities u2014 these are illegal self-help eviction tactics in Japan, regardless of how clearly the tenancy has ended
Lease expiration management, done properly, is one of the more powerful tools a landlord has. Fixed-term leases in particular give you genuine flexibility to manage your property’s future. Understanding and using these tools correctly u2014 while respecting the legal protections that exist for tenants u2014 keeps you on the right side of both the law and the landlord-tenant relationship.
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