Japan expat rental scene: When your apartment is always defined as a hotel!

Anyone who’s tried to land an apartment in Japan might appreciate this.

It’s been written about for years how Japanese are leery to rent to gaikokujin (foreigners). Usually, the stories go that the landlord makes any excuse, simply becomes unavailable, or flatly says “sorry”.

However, there are groups of landlords who are more than willing to rent to foreigners. This is because something is going on, unexplained, about what they are going to try to say that they are actually doing.

Debito.org, the website for basically any non-Japanese civil right issue in Japan, ran a piece about it in April. One that I am, um, familiar with. “Tokyo Reader” on odd rental contracts for apartments: “lease” vs. “loan for use”? Plus Kyoutaku escrow for disputes (Debito website, April 27, 2009)

To paraphrase, contracts to lease an apartment are governed under a special law called (in English), “Land and House Lease Law” (“LHLL”). The LHLL contains numerous protections for the renter, seeing as how the landlord ordinarily has the disproportionate power. Plus, this being a nation of renters, the renters do have some political pull.

There are protections like notice of eviction, a 6-month grace period before you can be evicted, the ability to challenge the rental price you are paying if you find out that your unit is overpriced compared to the market.

A leasehold is even defined as a contract whose initial term exceeds one month. Where there is no definition, the assumption is that it’s a lease under the law.

Useful protections.

So, going with this week’s theme: a Japan that’s a fair dealer or a Japan that’s sleazy and corrupt, what do you think happens when the situation involves foreigners?

Yes, that’s right. Figure out ways to make a lease sound like it’s not a lease.

The most common way to do this is to assert that what the landlord is actually leasing are “monthly apartments”. LeoPalace 21 is probably the best-known for this.

What the “monthly apartments” or “monthly mansion” meme seeks to do is to turn a leasehold interest into, basically, something like a hotel room. These are governed under an entirely different set of Japanese Law, the Civil Code, Article 593 (“Loan for Use” contracts).

LeoPalace is pretty specific about the contract wording and what they’re trying to do up front. So they look to be able to sell apartments for a three-month or even one-year stretch as if they were prepaid, extended-stay hotel rooms. I don’t know if anyone among the Japanese has poked at those contracts at all yet.

With “loan for use”, usually the prices are substantially higher. And you’re also being charged extra for each and every utility or service that is coming into the unit.

“Loan for use” is also very specific: if you do anything to go outside the rule or do something that puts yourself into LHLL, you are in LHLL.

The Leos and Chintais manage to do everything correctly– or are big enough to get off if they don’t. (I don’t know.) But in the local markets, with smaller landlords and agencies, everything gets very sloppy.

For instance, you may be offered a three-month renewable lease — it says “lease” right on the top of the contract, in English — with a 30-day notice provision, while your neighbor was offered a two-year lease with a 30-day notice provision. (Notice that in each case, the lease ends when you let the landlord know, 30 days ahead of time, that you want out.) The three-month lease is priced much higher (upwards of 50%) than the two-year lease. Why? They are both under LHLL, right?

Well, the reason is simple, isn’t it? This is dealings with foreigners, which is much different than if you are dealing with the Japanese community. For one thing, the foreigner isn’t even supposed to know what the real law is. Then, when things have been nicely confused, well, there are all those Japanese shades of gray that are tried to be worked into every situation for advantage.

And fixing a situation involves, then, a what? A fight. Which makes it look like the gaijin “just can’t fit into Japanese society and always look to make trouble.” See? This is all a big game for them.

“Oh boo hoo! Oh boo hoo! We explained evvvvvvvvvverything in the beginnnnnning! Boo hoo! Why did we havvvvvvvvvvvve to put the contract in English, it would have been better if we could have just used our own native language of Japanese!!!” (which, it’s left out, would never have been signed to begin with!) “Oh no! First, our humiliating defeat in that bad War, and our humiliating occupation by the GHQ . . .

And now . . . this!

(And “this” is simply pointing out that the landlord and/or agent is royally screwing somebody, because they figure people don’t know the rules.)

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4 comments

  1. chuckers · December 24, 2009

    I am sorry, I don’t see how this is a housing discrimination issue. Not saying there ISN’T a discrimination issue but there are a lot of things that are being left out and there doesn’t seem to be any evidence that Tokyo Reader is getting “shafted” simply because he/she is a foreigner.

    If TR wanted a lease for longer than 3 months, why not ask for one? There is no evidence that has happened.

    The rent is higher now than it was previously. Renegotiating. Good on ya. Is the price higher because the rentor is a foreigner? No idea and no evidence supporting that either way.

    In fact, TR even admits that the rental company is saying that the apt in question is appraised at a higher rate. Why? Dunno. No details are given. But check around at any realtor that have apts. listed in the same building. Rent on rooms of the same size in the SAME building can and do vary. First floor apts are cheaper (not as much privacy and therefore less demand.) Apts in the NW corner of the building are not as expensive as those with a southern “view.” Not enough details to make a decision.

    TR even admits that LeoPalace style places will give discounts on rent for extended periods. After living in the place for over a year (and supposedly renewing the contract at least 4 times WITH NO RENEWAL FEE!) why didn’t TR just ask for a 1 year lease up front and maybe get a discount anyway?

    I am sorry. I just don’t see discrimination in this case. Heck, the contract was even written in English. THAT doesn’t happen very often around here.

  2. hoofin · December 24, 2009

    Sorry Chuckers, you missed the main point of the post.

    The rental company offers one or more people the two-year contract, with the 30-day termination clause. And someone else only gets 3 months renewable—with the same 30-day termination clause. There is no difference. And adding a renewal fee (which a Kyoto court ruled illegal this past summer) would be even worse!

    Why would you do all this? Except if you were looking to squeeze a person simply because they come from a transient group.

    Same terms for everyone. Period. If the rooms are comparable.

    LeoPalace is not comparable to the HT contract. LeoPalace publishes its information ahead of time, and charges the same prices, whether the person is ethnic-Japanese or not. LeoPalace does it right to the rule.

  3. chuckers · December 25, 2009

    Where was it stated anywhere that TR was ONLY able to get a 3 months renewable contract?

    Where was it stated that the 3 month contract was for foreigners only?

    Where was it stated that the two year contract was for Japanese only?

    From the article:

    “I am fairly confident that at least one other resident has a lease-style arrangement.”

    What is the nationality of the other resident?

    None of those questions are answered.

    I appreciate and understand what you are saying. The points you raise are all completely valid and someone *should* be called out for it if that is what is going on.

    However, based on what TR wrote, I can’t find any evidence one way or the other that there are any discrimination based shenanigans going on. The main point of contention appears to be whether the apt in question falls under the Land & House Lease Laws or the Loan of Use laws. That is for someone else to decide. And those points of contention would occur whether the renter was ethnic-Japanese or otherwise.

    The other point of contention appears to be the rent which is being re-negotiated. TR thinks it should be cheaper. The realtor thinks otherwise. Again, I fail to see where there is discrimination going on in that. TR claims there was no tiered pricing when moving in. I claim empirical evidence would show otherwise. Rent prices are falling all over the place as landlords get desperate trying to find tenants.

    I agree “Same terms of everyone. […] If the rooms are comparable.” However, I am claiming that there is not enough info to make a decision in this case. *Are* the rooms comparable? Was the contract ONLY allowed to be 3 months max simply because of TR’s foreignness? Did TR even ask for a longer lease?

    Reading the article, TR obviously is smart enough to know about the Land & House Lease Laws. Why isn’t TR complaining about only being able to rent for 3 months at a time? The only reason I can think of was that TR wanted to be able to move out at a moment’s notice.

  4. hoofin · December 25, 2009

    Chuckers, sorry about the confusion. I have more, and later, information than what appeared in the April 2009 post. (Things TR nailed down later or didn’t include.) Assume the additional information as factual, and then tell me if you would conclude the same way.

    But even with the original fact pattern, you’ll note that the original lease required a 30-day notice period for move-out. This is what makes it a kicker. A two-year lease has a 30-day notice period; the 3-month lease has one, too. So “committing” to two years would be a big of a joke: the commitment is always 30 days in either case.

    And if there were some original fee on the 2-year one, it would probably be amortized within the first three months anyway.

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