Every two years, right around the time a tenant’s lease is about to end, I send out a renewal notice with an invoice attached. The number on that invoice is usually one month’s rent, and I still get the occasional confused phone call asking why they have to pay again when they haven’t moved out. If you’re a tenant in Japan or a landlord trying to figure out how much of this money you actually get to keep, the renewal fee system deserves a proper explanation.
I’ve been running this exact process across 9 rental units for over 15 years, and the mechanics haven’t changed much, even as the amounts and negotiating room around them have shifted.
What the renewal fee (koushinryou) actually is
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Koushinryou (u66f4u65b0u6599) is a one-time payment tenants make to extend their lease, typically at the two-year mark. It’s separate from rent, separate from the deposit (shikikin), and separate from key money (reikin) if your contract still has that. In my properties, the standard renewal fee is one month’s rent, though I’ve seen contracts in the Tokyo area ask for anywhere between 0.5 and 2 months depending on the landlord and the building’s age. On one of my older buildings from 1998, I still charge a flat 1.0 month because that’s what the original contract template locked in, and changing it mid-tenancy would require the tenant’s agreement anyway.
Why the fee exists at all
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The honest answer is that it’s a legacy of how Japanese leases were structured decades ago, when landlords needed a mechanism to periodically reset terms without going through a full re-lease process. Today I think of it less as a “renewal” charge and more as compensation for the administrative work and risk of keeping a tenant instead of turning the unit over. Turnover costs me real money u2014 cleaning, minor repairs, sometimes repainting a wall for 45,000 yen u2014 so a renewal fee that keeps a good tenant in place for another 2 years is, frankly, a bargain compared to a vacancy.
How much landlords can legally charge
This is the part that surprises a lot of people, tenants and new landlords alike: courts in Japan have upheld renewal fees as legal as long as three conditions are roughly met.
- The fee is clearly stated in the original lease contract, not sprung on the tenant later
- The amount is not so high that it becomes an unreasonable burden (in practice, courts have generally accepted up to about 2 months’ rent)
- The tenant had a genuine opportunity to review the terms before signing
A 2011 Supreme Court ruling specifically upheld renewal fees against a challenge that called them invalid, as long as those conditions were satisfied. That ruling is why I’ve never bothered fighting tenants who ask about it u2014 the law is on the landlord’s side here, provided your contract language is clean.
Regional differences you should know about
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Renewal fees are far more common in the Kanto region than in Kansai. In my experience managing units in both styles of contract, Kansai-area leases more often skip the renewal fee entirely and instead build slightly higher base rent into the contract from day one, or they auto-renew with no fee at all under a legally-required lease structure. If you’re a tenant comparing two nearly identical units and one has no renewal fee, don’t assume it’s the better deal u2014 run the math over a 4-year stay and compare total cost, not just the sticker rent.
What tenants can actually negotiate
I’ve had maybe a dozen tenants over the years ask if the renewal fee is negotiable, and about half the time I’ve said yes, mostly for long-term tenants with a clean payment record. If a tenant has paid on time every month for 2 straight years and plans to stay another 2, I’ll sometimes drop the fee to half a month’s rent rather than risk a vacancy that could cost me 2-3 months of lost rent while I find someone new. It’s worth asking, but go in with a track record, not just a request.
How I handle the paperwork on my end
About 60 days before a lease expiration, I send a renewal notice by mail along with the updated contract and the invoice. Payment is typically due within 30 days of the renewal date. I keep a simple spreadsheet tracking all 9 properties’ renewal dates so nothing slips through u2014 missing a renewal window has, in the past, left me in a legal gray area about whether the old contract quietly rolled over under statutory protections, which is not a position I want to be in as a landlord.
That’s the system as I run it across all 9 of my properties, and it’s worked well enough that I’ve never had a renewal fee dispute end up anywhere near a lawyer’s office.
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