Why Japan is so strict on leasing apartments?
We’ve all thought about it and complained about it when searching for an apartment; why are Japanese property managers so strict before renting an apartment and why do they seem to be reluctant to rent to foreign people?
To address the first issue, why they are so strict, we have to look back to the end of World War II. Japan was in ruins and living space was in short demand. The remaining buildings that were livable were capitalized heavily by landlords by charging 礼金 (key money and if you can read kanji, basically means “thanks” money) to prospective tenants. The Japanese people at the time too thought it was garbage but since the choice was either pay or live on the street, there were no shortage of people willing to pay.
However, once in the apartment, the next thing tenants needed to do was find jobs to provide income. It’s tough to find a job in the midst of someplace that has been bombed to the stone ages so therefore many tenants found it difficult to pay their rent on time.
Landlords, seeing the opportunity to make another couple months of Key Money with a new tenant gave no patience to existing tenants late with their rent and thus evicted them immediately. This cycle was extremely profitable for the landlords but horrible for tenants.
As Japan rebuilt itself, the government realized that a thriving economy can’t be rebuilt without the common man having stable living arrangements. Hence the government stepped in to stop this exploitation by creating tenant laws that very much favor the occupants rather than the landlord.
This put tenants in a very strong position. Hypothetically, once a tenant signed a lease agreement and then decided to not pay rent, it now would take a landlord anywhere between 4 – 6 months to legally evict a non-paying tenant. Landlords now had to obtain government permission to serve a first warning to a non-paying tenant, wait a month, go back to the government to serve a second notice, wait another month, then go back to the government for a third notice, wait another month, then finally receive permission to formally evict the non paying tenant. During this whole process, the non paying tenant is living on the premises for free.
In response to these new laws, landlords and property managers had no choice but to do everything they could to make sure the person applying to rent their apartment is as risk free as possible. This is why landlords and property managers want to see income details, letters of employment, need a guarantor, etc… Once you’re in the apartment, then you’re in.
In the case of reluctant rental to foreign people, many times the cry “racism” is thrown about and it is debatable whether this is true or not. The reason it is still debatable is because we foreign people have one option open to us that Japanese citizens don’t have. If everything goes wrong for us here financially, given the closed nature of the Japanese financial and credit systems, we can simply leave the country without a word to anyone and the Japanese landlords can do nothing to our credit ratings like they can with Japanese citizens.
What I do believe is that when a foreign person has their apartment application rejected, the lack of their agent’s English language ability prevents clear communication as to why. Therefore the Japanese English speaking agent relies on what they know how to say which is “No Foreigners”.
If you can’t speak Japanese then simply walking in to the local real estate agent can elicit the same response as soon as you walk in the door, “No Foreigners”. Again, by and large what this means is the particular agent you are trying to speak to can’t understand English at all and since he is bound by laws to make sure you understand everything about the apartment you’re renting, he simply rejects service right then and there.
For example, if your apartment is a non renewable 1 year contract and your non-English speaking agent doesn’t make this point clear before you sign the lease, you theoretically can sue and win, thereby destroying his real estate license and killing his livelihood.
Whether you agree with it or not, this is the system here in Japan. Certainly there are things that need to change as times have changed but unfortunately that is beyond your power when looking to rent an apartment. Knowing the existing system and how it works can make your process smoother and then once you secure your living space, then you can set about getting on your soap box voicing your opinion…just make sure you have your keys in hand first though.