This article is written by a Japanese local.
When moving out of a rental property in Japan, many foreign tenants face troubles such as “the deposit paid is not returned at all” or “being additionally billed for unrecognizable repair costs.” This is caused by a lack of understanding at the time of contracting regarding the legal rules of “restoration to original condition (原状回復, Genjo Kaifuku)” unique to Japanese real estate.
This article explains the differences in the legal nature of “Security Deposit, Key Money, and Guarantee Deposit” and the strict refund rules applied upon moving out. To state the conclusion first: By using the Ministry of Land, Infrastructure, Transport and Tourism’s (MLIT) guidelines—which state that “the owner bears the repair costs for normal wear and tear”—as a shield, and by objectively recording photos of the room’s condition on the first day of moving in, you can completely prevent the unfair confiscation of your security deposit.
1. The Legal Nature of the 3 Fees and “Refundability”
Among the initial costs listed in the contract, the following three are related to “refunds” upon moving out. Please clearly separate their legal natures.
Security Deposit (敷金, Shikikin): “Refunded” in Principle
This is “collateral money” deposited with the owner to prepare for rent arrears or room damage caused by the tenant’s negligence. If there are no unpaid rents and you have not intentionally destroyed the room, the remaining balance after deducting the necessary cleaning costs (house cleaning fee) upon moving out will be refunded to your designated bank account.
Key Money (礼金, Reikin): Absolutely “Not Refunded”
This is a “gift of gratitude” to the owner for renting out the room. Because it is not a legal deposit, not a single yen will be refunded upon moving out, regardless of how cleanly you used the room. Please recognize this as a complete “sunk cost.”
Guarantee Deposit (保証金, Hoshokin): A System Unique to the Kansai Region and High-End Properties
This is a term used instead of “Shikikin” in Western Japan (especially the Kansai region) and in high-end apartments or business offices in the city center. While its nature is almost identical to Shikikin, Hoshokin is often paired with special clauses called “Shikibiki (Deduction)” or “Shokyaku (Amortization).”
For example, if the contract states “Guarantee Deposit: 3 months, Amortization: 1 month,” 1 month’s worth is unconditionally confiscated by the owner from the start, regardless of the room’s cleanliness upon moving out, and the cleaning fee is deducted from the remaining 2 months before the refund. If there is an amortization clause, the amount returned to your hands will be extremely small.
2. The Rules and Boundaries of “Restoration” That Foreigners Always Dispute Over
How much is deducted from the security deposit (or additionally billed) is determined by whether the owner or the tenant holds the responsibility for “restoration to original condition (returning the room to its original state).” The MLIT in Japan strictly defines the locus of this responsibility as follows:
| Bearer of Cost | Content | Specific Examples (Deducted from Deposit?) |
|---|---|---|
| Owner’s Burden (Not deducted from deposit) | Normal Wear & Tear / Aging Scratches and dirt that naturally occur from normal living. | ・Fading of wallpaper/tatami due to sunlight ・Floor dents from placing furniture ・Small holes from thumbtacks (pins) ・Black smudges on the wall behind the fridge |
| Tenant’s Burden (Deducted from deposit) | Intent / Negligence / Violation of Duty of Care Scratches and dirt caused by carelessness or neglect of maintenance. | ・Tobacco tar stains, burn marks ・Floor stains left after spilling drinks ・Large holes in the wall from nails or screws ・Mold in the bathroom caused by neglecting cleaning |
Malicious management companies will attempt to deduct repair costs for “normal wear and tear (such as natural discoloration of wallpaper),” which should originally be borne by the owner, from the tenant’s security deposit. Whether you possess the knowledge of this boundary constitutes your greatest line of defense.
3. “Practical Defense Procedures” to Maximize the Return of Your Deposit
You must implement defense measures based on legal grounds from before signing the contract until the time of moving out.
First Day of Move-in: Take “Photographic Evidence of Scratches” Before Bringing in Furniture
90% of troubles upon moving out are endless disputes of “This scratch was there from the beginning” versus “No, the tenant caused it.” On the first day you receive the keys and enter the room (before moving in your belongings), objectively record all floor scratches, wall stains, and equipment defects by taking photos with your smartphone. If the management company provides a “Condition Check Sheet,” fill in even the smallest scratches, keep a copy for yourself, and then submit it.
Pre-Contract Confirmation: The Trap of “Special Clauses”
While “normal wear and tear” is borne by the owner in principle, there are many cases where this is shifted to the tenant’s burden through “Special Clauses” listed at the end of the contract. Clauses such as “The house cleaning fee upon moving out (approx. 30K – 50K JPY) shall be borne by the tenant” or “Internal AC cleaning fees shall be borne by the tenant” are often legally valid. Therefore, absolutely confirm whether the market rate for these amounts is appropriate before contracting.
Move-out Inspection: Withhold Signing on the Spot
On the day you move out, a “Move-out Inspection” is conducted where you check the room’s scratches together with the management company’s representative. The representative may produce an estimate for repair costs on the spot and ask for your signature. If you feel “I am being billed for scratches that are not my fault,” you must not sign on the spot. Inform them, “I will take this home to confirm it against the MLIT guidelines,” and only receive the document.
4. Practical Q&A Regarding Refund Rules
Q. If the property is “Zero Security Deposit,” does it mean there are absolutely no costs upon moving out?
A. There are costs. “Zero Security Deposit” is merely a system to lower the initial costs at move-in. Upon moving out, you will need to pay at least the house cleaning fee stipulated in the contract (approximately 30K – 80K JPY depending on the layout) as an actual expense via bank transfer. Please note that because there is no deposited money, your out-of-pocket expense at move-out will be heavier.
Q. When will the security deposit that is supposed to be refunded be transferred after moving out?
A. Generally, it is transferred to your designated account “1 to 2 months after” moving out (returning the keys). Because it is not transferred immediately after moving out, you should avoid financial planning that relies on the deposit return from your previous home to cover the initial costs of your next move.
Q. I am being billed for unfair repair costs, and the management company will not respond to negotiations.
A. They may be taking advantage of your status as a foreign national. In that case, consult the “Consumer Affairs Center” established in each prefecture or free legal consultation desks for foreigners. In many cases, simply informing the management company that “I am consulting with a specialized institution” causes them to withdraw unfair claims.