The Move-Out Process in Japan: Damage Assessment and Security Deposit Rules
The move-out and security deposit settlement process (taishaku seisei) is the part of Japanese property management that generates the most conflict between landlords and tenants. This is also the area where Japanese law is most clearly on the tenant’s side u2014 and rightfully so, because historically some landlords abused deposit deductions. Understanding the rules and following them scrupulously protects you legally and preserves your reputation as a fair landlord.
Understanding the MLIT Guidelines on Restoration Costs
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The Ministry of Land, Infrastructure, Transport and Tourism (kokutsoushou) published guidelines (garuidorain) on restoration responsibilities that have become the practical standard across Japan. While not law in themselves, courts routinely reference them, and any landlord who deviates significantly from them without justification is likely to lose a tribunal dispute.
The core principle: restoration costs (gentsuten kaifuku) are split between what the tenant is responsible for and what the landlord must absorb as natural depreciation. Key rules include:
- Wall repainting due to normal aging, minor scuffs, and general discoloration caused by sunlight is the landlord’s responsibility
- Carpet replacement due to normal foot traffic is the landlord’s responsibility
- Damage from cigarette smoking u2014 yellowing of walls and ceilings, odor u2014 is the tenant’s responsibility (which is why I now prohibit smoking in all units)
- Pet damage u2014 scratches to flooring, staining, odor treatment u2014 is the tenant’s responsibility
- Damage caused by tenant negligence, such as water damage from an unreported leak, is the tenant’s responsibility
Depreciation also applies. A carpet installed ten years ago has likely been fully depreciated, so even if a tenant damages it, you can only charge for a portion of replacement cost, not the full amount.
The Deposit Settlement Statement: How I Calculate and Present It
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Within two to four weeks of move-out, I provide the tenant with an itemized settlement statement (seisan sho). This document lists:
- Every repair or cleaning item I’m charging for
- The full cost of each item
- The tenant’s share of that cost (after applying depreciation and the normal wear-and-tear exemption)
- The deposit amount minus the total tenant-responsible charges
- The refund amount (or, rarely, the amount owed if damage exceeds the deposit)
I attach contractor invoices and photographs for every charged item. This level of documentation makes disputes rare u2014 the tenant can see exactly what was damaged, what it cost to fix, and how I calculated their share.
Two weeks is fast enough to keep tenants satisfied and slow enough for me to get proper quotes from contractors rather than inflated emergency estimates.
Common Disputes and How to Handle Them
Despite thorough documentation, some tenants push back on deposit deductions. The most common disputes I’ve encountered:
- Full room repainting charge: Some landlords try to charge the full cost of repainting an entire room when only one wall was damaged. Under MLIT guidelines, you generally can only charge for the portion of wall that was actually damaged. I charge per wall panel (men), not per room.
- Professional cleaning disputes: Unless the contract specifically states that the tenant must pay for professional cleaning regardless of condition, this cannot be automatically deducted. I include a clause in my leases requiring professional cleaning, with a standard quoted price the tenant sees at signing u2014 this removes the surprise at move-out.
- Normal wear claimed as damage: A tenant who disagrees with my characterization of something as damage may contact the local consumer affairs center (shouhi seikatsu center) or use the small claims court (kantan saiban) process. I keep all documentation organized so I can respond to any formal inquiry quickly and confidently.
Returning the Deposit Promptly and Professionally
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Japanese tenants expect their deposit returned promptly. A landlord who sits on the deposit for two months, then returns a fraction with a vague explanation, is asking for a complaint. My standard process:
- Move-out inspection within 48 hours of vacancy
- Get contractor quotes within one week
- Issue settlement statement within two weeks
- Transfer refund within three weeks, or immediately upon the tenant accepting the statement
If the tenant disputes a line item, I respond in writing, explain my calculation method, and offer to share the MLIT guidelines. In most cases, a calm, document-supported explanation resolves the issue. In the rare case where I genuinely cannot agree with the tenant’s position and they escalate, I engage the local real estate association mediation service rather than letting it go to court.
Being fair and transparent at move-out isn’t just ethical u2014 it’s practical. Word of mouth in local rental communities travels, especially online. A reputation for clean, honest dealings makes tenant screening easier and reduces vacancy time. I’d rather return a slightly larger deposit than I think I strictly have to than have an unhappy tenant leave a review that costs me the next tenant.
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