Failure to pay rent is strictly prohibited! Rules you should know about renting in Japan, explained for foreigners.

Very few people would intentionally refuse to pay their rent. You probably also think that paying your rent on time every month is the right thing to do.

However, there are also reasons specific to foreigners that can lead to rent disputes.

Differences in culture and business practices

In Japan, the idea that punctuality is of paramount importance is deeply ingrained in society. You might even be surprised at how consistently trains arrive on time in Japan.

Furthermore, keeping promises (contracts) is also considered extremely important.

Given this cultural background, the basic idea regarding rent payments is that "not even a single day should be missed."

In some countries, there may be a culture where a delay of a few days is overlooked, or where people will understand if you explain the situation. However, in Japan, meeting payment deadlines is absolutely essential. This difference in the sense of "strictness regarding deadlines" can be the first step towards trouble.

Lack of communication due to language barriers

Lease agreements contain a lot of legal jargon, making them difficult even for Japanese people. They are even more so for foreigners.

In particular, tenants may overlook important details such as the rent payment date, payment method, and penalties for late payments (late fees). Furthermore, if a payment is delayed, tenants may not fully understand the phone calls or letters from the management company, unknowingly worsening the situation.

What happens if you're late paying your rent, even if you don't mean any harm?

Here are five risks associated with falling behind on rent payments.

Incurrence of late payment penalties

If you fail to pay your rent on time, an additional fee called a "late payment penalty" will be charged starting the following day. This is a penalty fee for breaking the agreement.

The interest rate is stipulated in the lease agreement, but it is generally set at the legal maximum of "14.6% per annum".

[Calculation example]
If you are 30 days behind on rent of 100,000 yen (annual interest rate of 14.6%)

• 100,000 yen × 0.146 ÷ 365 days × 30 days = approximately 1,200 yen

If you ignore it thinking "it's just a small amount," it's not uncommon for the late fees alone to amount to tens of thousands of yen. Also, as will be explained later, the amount you have to pay as a result of falling behind on rent is not just late payment penalties, so when you add everything up, it can amount to a considerable sum.

Impact on joint guarantors

In Japanese rental agreements, a "joint guarantor" is often required. A joint guarantor is someone who assumes the obligation to pay the rent on your behalf if you are unable to do so.

If you fall behind on your rent payments, your landlord or property management company will immediately contact your guarantor and demand payment. As a result, you will be burdening your family or friends who acted as your guarantor with a significant financial burden and considerable worry. This is a very serious issue in interpersonal relationships in Japan.

For more details about joint guarantors,
Please see " Is it OK without a guarantor? A complete guide to rental property guarantees in Japan for foreigners . "

Impact on credit information

An increasing number of rental properties require the use of a rent guarantee company (explained below) when signing a lease agreement. Some of these guarantee companies are credit card companies and other "financial" companies.

If you use a credit-based guarantee company and fall behind on your rent payments, that information may be recorded by a "credit information agency." Credit information refers to an individual's loan and credit card usage history, and if this information is damaged, you may be unable to pass the following types of credit checks in the future.

• I can't get a new credit card.
• I can't get a loan for a smartphone or a car.
• Failing the tenant screening process when renting a different room.

Falling behind on rent payments can ultimately have a long-term negative impact on your overall life plan in Japan.

It could go to court.

If you continue to ignore reminders by phone and letter, and the period of non-payment extends to several months, the landlord or management company will initiate legal proceedings.

Ultimately, you may face a lawsuit for eviction. You will receive a notice from the court and be required to appear in court. If you lose the case, you will be legally required to vacate the premises.

Furthermore, not only will you have to vacate the room, but you will also incur legal fees.

If a tenant is more than three months behind on rent, unless there is a special reason on the tenant's part, the landlord will win in court (meaning the tenant will lose).

Furthermore, in Japanese civil trials, the principle of "the losing party pays" applies. In other words, the party that loses the case must pay the costs incurred in the court proceedings.

Court costs can range from several hundred thousand yen to over one million yen in some cases, and you, who are behind on your rent payments, will have to bear those costs.

Therefore, in addition to the unpaid rent and late payment penalties, you will ultimately be obligated to pay the court costs as well.

Forced removal

If you still refuse to vacate your apartment even after losing in court, the last resort is "forced eviction." This is a procedure in which a court bailiff comes to your apartment, removes all your belongings, and forces you to leave.

Imagine this: one day, you suddenly lose your home against your will. This is the most serious consequence of failing to pay rent.

Furthermore, there are additional costs involved. You will have to pay for the cost of moving your belongings, the storage fees for temporarily storing them after they've been moved, and the disposal fees if you decide to get rid of your belongings. Depending on the size of the room and the amount of belongings, it can cost several hundred thousand yen even for a studio apartment, and it's not uncommon for it to exceed one million yen for a family-sized apartment.

From rent arrears to forced eviction, the process generally follows these steps.

1. The day after the payment due date to one week later: You will receive a phone call or letter informing you about unpaid rent. If you simply forgot, paying immediately at this point will not cause any major problems.
2. One month into the arrears: The landlord will contact the guarantor or guarantee company. They will request that you pay the rent because the tenant has not paid it. At this stage, your creditworthiness will begin to be severely damaged.
3. Two to three months after the rent is overdue: A certified letter demanding payment of rent and a notice of contract termination will arrive. A certified letter proves "when, who, and what kind of document was sent," and serves as a final warning before legal proceedings begin.
4. If rent is overdue for more than three months, it can lead to legal action and forced eviction. Generally, if rent is overdue for more than three months, it is more likely to be considered a "destruction of trust" in which the landlord can legally terminate the contract. The landlord will file a lawsuit in court, and if a judgment is issued, the process will proceed to forced eviction.

Thus, being late with rent payments does not automatically mean you will be sued or forcibly evicted.

However, knowing the process that leads up to that point will strengthen your resolve to avoid falling behind on your rent payments.

Even if you are late paying your rent, you can avoid the worst-case scenario by taking appropriate action.

This explains what you should do if you fall behind on your rent payments for any reason.

Contact your landlord or property management company immediately.

When you're late paying your rent, the two things you absolutely must not do are ignore it and lie.

If you are late on a payment, or realize you will be late, contact your landlord or property management company as soon as possible. It's important to be honest and explain the situation yourself, rather than waiting for them to contact you. Being sincere is the best way to convey to them that you intend to pay.

Especially if this is your first time missing a payment, contacting them yourself will likely help them understand your situation.

Clearly communicate the payment due date.

When you contact them, don't just say "I can't pay." Briefly explain the reason why you are late and promise a specific date when you will be able to pay.

If you are unable to make the payment by the agreed-upon date, it is essential to contact us again before that date to discuss the matter; this is key to maintaining trust.

List of resources to contact if you are unable to make a payment.

If you absolutely cannot solve the problem on your own, please don't suffer alone. In Japan, there are official offices and organizations that can support foreigners.

• Local government consultation services for foreigners
• Support organizations such as NPOs
• Embassies and Consulates

These organizations won't pay your rent for you, but they can provide the necessary support, such as referrals to specialists, depending on your situation.

So, to what extent are rent arrears actually occurring in Japan?

Let's look at the actual data.

Rent delinquency rate across Japan

According to a survey by the Japan Rental Housing Management Association , the national average rate of rent arrears for one month in 2022 was 0.8%, and the rate of rent arrears for two months or more was 0.3% (this data is for all of Japan, not limited to foreigners).

This means that if there are 1,000 tenants, 8 of them will be one month behind on rent, and 3 will be seriously behind on rent for two months or more. While these numbers are not particularly high, it shows that this is a risk that can occur on a daily basis for landlords and property management companies.

Does non-payment of rent automatically mean immediate eviction?

The percentage of people who are more than two months behind on their rent is 0.3%, which corresponds to approximately 71,000 rental properties.

Of these, 5,609 cases, or about 8%, progressed to lawsuits and forced evictions.

As these figures show, being one month behind on rent doesn't automatically mean you'll be forcibly evicted. Legal procedures are time-consuming and expensive, so landlords generally prefer to resolve matters through negotiation.

In other words, what's important is how you handle the situation after you've fallen behind on payments.

If you communicate honestly and demonstrate your intention to pay, you can maintain a trusting relationship with your landlord and significantly reduce the chances of avoiding the worst-case scenario of eviction. Conversely, if you continue to ignore their communications, the trust will be completely destroyed, and you will likely be forced to proceed with legal action.

Now that you have a good understanding of the risks associated with rent arrears, here are some practical ways to avoid unexpected rent arrears.

Understanding "guarantee companies" correctly

In Japanese rental agreements, a co-signer is required. However, for people like foreigners who have just arrived in Japan and do not have family or relatives in Japan who can act as guarantors, a guarantee company can be used instead.

A guarantee company is a company that will temporarily pay your rent to your landlord on your behalf if you fall behind on your rent payments.

However, don't misunderstand. The guarantee company only covers the rent on your behalf; you are still ultimately responsible for paying the rent yourself.

In fact, since guarantee companies specialize in billing and collecting debts from borrowers, their collection methods are generally more stringent.

Therefore, remember that a guarantee company is a kind of "insurance" in case of rent arrears, and you are still obligated to pay the rent.

Utilize bank transfer or credit card payments.

The most practical and effective way to avoid unnecessary rent arrears is to set up automatic bank transfers or credit card payments.

With bank transfer or credit card payments, your rent will be automatically deducted from your designated account or credit card at a fixed time each month.

These days, when signing a rental agreement, you'll almost always be required to pay by bank transfer or credit card, so be sure to have a Japanese bank account or a credit card that can be used in Japan ready before signing the contract.

For information on how to open a Japanese bank account, please also refer to "Successfully Secure a Rental Agreement in Japan! A Guide to Real Estate Screening Criteria for Foreigners."

Carefully check the contract.

Before signing a contract, carefully reviewing its contents is fundamental to preventing problems. In particular, be sure to check the following items.

• Amount of rent and common area maintenance fee
• Payment due date: A certain day each month
• Payment methods: Bank transfer, direct debit, etc.
• Who will bear the bank transfer fees?
• Late payment interest rate

If possible, get an English version of the contract, ask the real estate agent for an explanation, or have a friend or support group that speaks Japanese accompany you so that you can fully understand the contents before signing.

Choose a property with a reasonable rent.

First of all, if you choose a property with rent that is too high and doesn't match your income, the risk of falling behind on payments increases.

In Japan, it is generally said that a reasonable amount of rent to pay without difficulty is "no more than one-third of your net monthly income."

For example, if your net monthly income after taxes and other deductions is 240,000 yen, then a reasonable rent would be 80,000 yen or less.

When searching for a property, keep these criteria in mind and make your decision after considering the balance between your income and living expenses.