Most landlords in Japan have traditionally required a Japanese citizen to act as a guarantor for any rental agreement. Thus, it can be difficult for foreigners who may not have a Japanese friend or acquaintance who can act as a guarantor.
So what do you do? Do not despair. Below are several options to consider.
Properties That Do Not require a Guarantor
In recent years, however, an increasing number of rental agencies and landlords have started to offer rental agreements that do not require a guarantor.
Such properties are called hoshonin fuyo (保証人不要) in Japanese, which literally translates as “no guarantor required” or “guarantor-free.” Because guarantors play such an important role, even guarantor-free properties often require some other form of guarantee in place.
Use a Guarantor Company
If you’re interested in renting a guarantor-free apartment in Japan, you’ll most likely need to engage with a guarantor company. Guarantor companies act as your backup to pay the landlord in case you miss a rent payment.
The landlord generally specifies which guarantor company to use and it’s not usually your decision as a tenant. Understanding their operations and the scope of their coverage is essential for a seamless renting experience.
Coverage Provided by Guarantor Companies
The scope of what guarantor companies cover can vary depending on your contract, but here are some common points:
- Unpaid Rent: They cover rent if you miss a payment.
- Unpaid Utility and Management Fees: They cover unpaid communal fees.
- Unpaid Renewal Fees: Responsible for unpaid renewal fees.
- Unpaid House Cleaning and Key Replacement Costs: These costs are covered.
- Penalty Fees: They’ll pay any penalties you incur.
- Restoration Costs Upon Leaving: Costs for returning the apartment to its original state are covered.
Fees Associated with Using a Guarantor Company
You should be aware that there are costs involved:
- Initial Fee: Typically “0.5 to 1 month’s rent.”
- Annual Renewal Fee: Usually ranges from “10,000 to 20,000 yen.”
Ask HR for Help
Having your employer sign the lease agreement and subsequently pay the rent on your behalf will often open up many properties that would otherwise need to be crossed off your list of potential dwellings.
The landlord will often feel more comfortable with such an arrangement, although it would certainly bind you closer to your local employer.
This is the exact approach that my firm used for many years to make it possible for my family to live in a single-family home in Naka-Meguro, where the landlord was initially hesitant about renting to a foreigner—regardless of my ability to supply a guarantor.
Thus, we maintained an “arms-length” relationship with our landlord and saved a lot of paperwork in the process. My company supported much of our rent, but I was still responsible for some of it.
Instead of paying the landlord directly, I had HR take out this portion from my monthly paycheck.
Work through a Middleman
If your company is not able to provide that level of support, then it is possible to have your firm’s HR team work with another 3rd party, such as Relocation International, that can act as a middleman by entering into a lease agreement with both the landlord and your local employer in Japan.
Employ Your Own Representative Guarantor
Another possible option would be to use a representative guarantor or hoshonin daiko (保証人代行). Such 3rd party services typically cost approximately one month of rent (including common fees) along with an up-front non-refundable application fee of around 30,000 yen (approximately US $220).
When attempting to rent a property in Japan as a foreigner, it is, no doubt, easier simply not to buck the system and supply one, there are several other options.
Even for Japanese nationals, renting without a traditional guarantor is becoming increasingly common. If you have questions, please give us a call.
