[Must-See for Foreigners] Don't Panic About Rent Increases in Japan! A Complete Guide from Negotiation Techniques to Where to Get Advice

In January of this year, immediately after the ownership of a rental apartment in Tokyo changed to a Chinese company, all residents received a notice stating that "the rent will be increased by approximately 2.6 times (from 72,500 yen to 190,000 yen)."

Following media coverage and strong criticism from residents, the new Chinese-owned owner has indicated his intention to reverse his price increase plan.

Many Japanese people were surprised that something like this could happen in Japan, and since it was covered on ANN (All Nippon Radio), you might already know about it.

While a 2.6-fold increase is highly improbable, it's not uncommon to be suddenly notified of a rent increase.

Basics of the Land Lease and House Lease Law

In Japan, building rents are determined by agreement between the landlord and tenant, and changes to these rents also generally require mutual agreement, as stipulated by law. Therefore, landlords cannot unilaterally raise rents (Land and House Lease Act).

In some countries outside of Japan, landlords are free to raise the rent when the lease is renewed. If the tenant does not agree, they have no choice but to move out.

However, in Japan, tenants' rights are strongly guaranteed, so landlords cannot arbitrarily raise rent. However, exceptions may be made if there is a legitimate reason.

What are some "legitimate reasons" for a landlord to raise the rent?

In Japan, landlords cannot arbitrarily raise rents for rental properties. However, if there are objectively recognized "legitimate reasons" such as those listed below, a rent increase may be deemed justified.

1. Rising property maintenance costs and taxes: When costs associated with maintaining and managing a property increase, such as property taxes, building repair costs, management fees, personnel costs, and utility costs.
2. Increased value of land and buildings: When a new train station is built nearby or the area becomes more popular, the value of the land and buildings increases.
3. Balance with surrounding market rates: When the rent is clearly lower than the market rate. For example, if a similar property nearby has a rent of 100,000 yen, but your current rent is 70,000 yen, a rent increase of 30,000 yen may be permitted.

If such objective facts are the basis for the request, a rent increase may be demanded.

When and how will I receive the notice of a rent increase?

However, you won't suddenly be notified one day that "your rent will be going up starting next month."

According to Japanese law, when raising rent, landlords must give tenants sufficient notice. Generally, this means providing written notice at least one month in advance.

The notice typically includes specific details such as the reason for the rent increase, the new rent amount, and when the increase will take effect. Clearly communicating this information allows tenants time to prepare and consider their options, preventing them from being caught off guard by a sudden increase in their financial burden.

If you have any questions or concerns about the notice, you can contact your landlord directly or consult a professional. Legally, rent increases without a valid reason are not permitted, so try to remain calm.

Rent increase notification process

1. Receiving notification: You will receive a written or mailed notice from your landlord stating that the rent will be increased. This notice is usually sent at least one month in advance.
2. Check the notification: The notification will include the reason for the rent increase, the new rent amount, and the date and time the increase will take effect. First, read the contents carefully.
3. If you have any questions or concerns, seek advice: If you don't understand the reason or are not satisfied, ask your landlord directly, or consult with a real estate company or expert.

So, what should you do if you actually receive a notice of rent increase?

First, check your lease agreement.

First, check your lease agreement. In particular, look for any clauses regarding rent revisions or special provisions such as "no rent increases."

If the contract contains a special clause stating that the rent will not be increased, then, in principle, the rent cannot be increased, even if there is a "legitimate reason" for doing so. This is because the agreement made at the time of the contract takes legal precedence.

How to verify the "justification" of a price increase yourself

Are the reasons for the rent increase stated in the notice truly justified?

You can verify whether the landlord's claims are truly objectively correct in the following ways:

• Research the surrounding rental market: Check the rents of nearby properties with similar conditions to your current property using real estate information websites and compare them. If your current rent is significantly higher than the surrounding market rate, or if the rent after the increase will be considerably higher than the market rate, this will be a strong basis for negotiation.
• Check the trends in price increases and taxes: Are they raising your rent simply because you're a foreigner? To see if prices and taxes in Japan are really rising, check the Consumer Price Index (CPI) onthe Ministry of Internal Affairs and Communications Statistics Bureau's English website, for example.
• Check the condition of the property: If the property is old, the facilities are outdated, or the common areas are poorly maintained, and the living environment has deteriorated since you moved in, this can also be used as leverage in negotiations. If there are any specific problems or areas for improvement, it's a good idea to document them with photos or other means.

Negotiation techniques with landlords and property management companies

If you don't agree with your landlord's reasons for raising the rent, you can try negotiating.

Please prepare the following points before starting negotiations.

• Data Collection: We will organize information such as surrounding rental rates and property defects, and prepare to present specific figures and facts.
• Self-evaluation: Be sure to highlight your track record as a good tenant, such as whether you have ever been late on rent payments or caused noise problems. Landlords value "good tenants" who do not default on rent and do not cause trouble with neighbors. Since vacancies represent a significant loss for landlords, retaining good tenants can sometimes be more beneficial than a small rent reduction. Recognize your "value as a tenant" and use it as leverage in negotiations.
• Consider alternatives: If you are willing to accept a price increase, it will be helpful to have alternatives in mind, such as how much you are willing to accept, or whether you can negotiate concessions on other conditions, such as a reduction in renewal fees, equipment repairs, or a grace period before the price increase.

However, Japanese people are not good at negotiating. If you, as a foreigner, suddenly present this information and start negotiating, the other party may be surprised. Therefore, first, tell them by phone or email that you would like to discuss a rent increase.

And when negotiating, don't just push your own demands; express your gratitude for being able to live in a comfortable room, and convey that you really like the property and would like to continue living there if possible.

In the end, it's not objective "numbers" but your "feelings" that will move your landlord's heart.

Options when negotiations are difficult: Consult a specialist.

If you find it difficult to negotiate on your own, consider consulting a professional.

For example, there are the following resources available to you, even if you are a foreigner:

• Legal Support Center (Houterasu) : A consultation service for legal troubles. Consultations are free, and the website is available in multiple languages.
• Foreign Residents Support Center (FRESC) : A support center that accepts consultations regarding the lives of foreign residents.
• Consumer Hotline : A consultation service for unfair billing, contract disputes, and other issues. Partially multilingual support available.

Legal options if negotiations break down: What is rent deposit?

If negotiations break down, there is a system called "rent deposit" as a last resort.

Rent deposit is a system where, in cases of disputes such as disagreements over rent increases, rent can be deposited with the court.

This isn't about "not paying rent," but rather a method of "wanting to pay properly but having trouble, so depositing the money with a neutral place (the court)." By making a deposit, you can gain time to resolve the issue while continuing your lease agreement.

Procedures for depositing rent

1. Preparation of documents explaining the reason for the deposit: You will need to explain in Japanese why you are making the deposit.
2. Procedure at the nearest deposit office (located within the Legal Affairs Bureau): Bring the rent in cash and deposit it.
3. Send a deposit notification to your landlord: You need to inform them yourself that you have made a deposit.

Points to note

• Rent deposits must be made every month on an ongoing basis; it's not a one-time thing.
• Procedures and documents in Japanese are required.
• Since this could potentially worsen the problem, it's safer to consult with a legal professional or other expert before proceeding.

While foreigners can also deposit rent with a third party, the entire procedure is conducted in Japanese, so be sure to consult with a specialist.

Is the rent for your apartment actually high or low compared to the market rate?

Let's make sure we're keeping up with the latest nationwide trends.

Trends and current status of average rents nationwide

Following the COVID-19 pandemic, prices have been on an upward trend since the latter half of 2021. Many cities have seen price increases to record levels.

Therefore, it may be necessary to consider a certain degree of rent increase as unavoidable.

Comparison of average rent prices by region and type

Rent in Japan varies greatly depending on the region. Rent is particularly high within Tokyo's 23 wards, and it continues to rise.

Next are areas outside of Tokyo's 23 wards in the Kanto region, followed by Osaka. However, rent varies greatly depending on the distance from the station, the age of the building, and the floor plan.

Average rent prices by region (compiled independently from real estate websites)

Knowing this kind of up-to-date information about Japan will help you make a calm decision when you receive a notice of rent increase.

Finally, I will introduce some of the problems related to rent increases that foreigners often encounter, and how to resolve them.

Problems arising from language barriers and cultural differences

If you sign a rental agreement without a sufficient understanding of Japanese, you may miss important notices such as rent adjustments. Many people end up feeling anxious because they don't understand the detailed clauses in the contract or the justification for rent increases.

Furthermore, a lack of courtesy or respect during rent negotiations can further complicate the situation.

solution

• Always prepare translations of contracts and notices in your native language and English, and ensure you understand their contents accurately.
• Check with the rental agency or property management company in advance to see if they have staff who can handle multiple languages.
• Utilize multilingual consultation services and seek advice from experts.
• Approach negotiations with the attitude of "I'm grateful to be allowed to live here," rather than "I'm doing you a favor by renting from you."

Real-life examples of rent increase disputes and lessons learned

Case 1: A lawsuit concerning the refusal to increase rent in Tokyo

In a rental apartment in Tokyo, the landlord announced they wanted to raise the rent from 100,000 yen to 120,000 yen per month. The tenant objected, saying they would be inconvenienced by such a sudden increase. After further discussions failed to reach a resolution, the court ultimately ruled that the rent could be raised to 120,000 yen.

Points of the court's decision

The court considered the average rent for similar rooms in the area and the opinion of a real estate appraiser, and determined that "this amount is reasonable."

Background of the problem

• The landlord only explained, "Rent in the neighborhood is going up, so I want to raise mine too."
• The tenant requested to see "proof (data or documents) of why the rent was increasing," but initially, no specific documents were provided.
• The matter could not be resolved through negotiation, and the court made the final decision.

lesson

• When refusing a rent increase, it's important to request specific figures and documentation.
• Japanese courts place importance on "market rates" and "expert opinions." It's a good idea to gather information on local rents yourself.
• Before resorting to court, try to resolve the issue through discussion by using local government consultation services for foreigners or legal aid services.

If there is a legitimate reason, a rent increase may be approved by the court. It is important to make decisions based on objective figures, not emotions.

Case 2: Rent nearly doubled in an Osaka apartment & troubles with short-term rentals

In a 35-year-old rental apartment building in Minami, Osaka, I suddenly received a notice from the management company stating that the rent would be increased from approximately 100,000 yen to 180,000 yen. At the same time, about two-thirds of the rooms in the building were rented out as short-term rentals without permission, and the situation became unbearable due to loud construction noises at night and unattended water leaks.

The outcome of the trouble

• Most residents moved out: After receiving a unilateral notice of withdrawal from the new owner, more than half of the residents gave up on continuing to pay and moved out.
• Conversion to short-term rentals (Airbnb): The owner began renovating many of the vacant rooms for short-term rentals, and these rooms were actually listed on Airbnb websites. As a result, the building was effectively converted for "Airbnb business use."  
• No legal disputes ensued: Many residents did not seek advice from professional organizations or lawyers due to the "sudden rent increase," and the matter did not escalate to class-action mediation or litigation. Therefore, the legitimacy of the new owner's rent increase notice was not contested.

lesson

• If you are faced with a sudden and significant rent increase, first, try to prevent forced eviction by "continuing to pay the current rent" while also securing time to consult with a specialist.
• Keep a close eye on any activity in vacant rooms, and report any suspicious renovations or short-term rental listings to the authorities.
• Instead of acting alone, we will collaborate with local residents and experts to consider a collective response.

Keeping written records and seeking early consultation with specialized agencies are crucial. Foreign nationals, in particular, should utilize language support services and multilingual consultation agencies, share information, and respond calmly.