Hello! This is Willow Inc., here to provide total support for your new life in Japan.
Has it been almost two years since you moved into your current apartment? Around this time, you might receive a “Contract Renewal Notice” from your property management company or landlord. And perhaps you were shocked to see a mysterious expense called “Koushin-ryou” (更新料) written on it?
“I have to pay *more* money in addition to my rent?”
“What is this fee for? Do I really have to pay it?”
This is one of Japan’s unique rental rules that many foreigners encounter. If you don’t know about it, you could end up losing a significant amount of money. To protect your life in Japan, this article will thoroughly explain what this “renewal fee” is and how to deal with it wisely!
First of all, What IS “Koushin-ryou” (Renewal Fee)?
To put it simply, the “Koushin-ryou” is like a “thank you” fee paid to the landlord (owner) to extend (renew) your apartment contract for another two years.
This is not required by law, but it exists as a regional custom (especially common in the Kanto region, including Tokyo). However, if it is clearly stated in your rental contract that you must pay it, then you are legally obligated to do so.
- When do you pay it? At the time your contract expires (generally every 2 years).
- How much is it? The market rate is typically one month’s rent, but some properties may charge 0.5 months or even 2 months’ rent.
“Renewal Fee” and “Renewal Admin Fee” are Different!
What’s even more confusing is that in some cases, you may be charged a “Renewal Admin Fee” (更新事務手数料 – Koushin Jimu Tesuuryou) *in addition* to the renewal fee.
- Renewal Fee (Koushin-ryou): Money paid to the landlord.
- Renewal Admin Fee (Koushin Jimu Tesuuryou): An administrative fee paid to the real estate company for handling the renewal paperwork.
This means you could be billed for “Renewal Fee (1 month’s rent) + Renewal Admin Fee (0.25 to 0.5 month’s rent)” at the same time, making it a major expense every two years.
[Check Now!] Look at Your Rental Contract
If you’re now worried about whether you have to pay, go and find the “Rental Lease Agreement” (賃貸借契約書 – Chintaishaku Keiyakusho) you signed when you moved in.
In the section about “Contract Renewal,” you should find a clause that states the following:
【Check Points】
- Is there any mention of a “Renewal Fee” (更新料)?
- Does it specify the amount, such as, “The renewal fee shall be equivalent to X month(s) of the new rent”?
- Is there any mention of a “Renewal Admin Fee” (更新事務手数料)?
If there is no mention of a renewal fee in your contract at all, you are, in principle, not obligated to pay it.
I Don’t Want to Pay the Renewal Fee… What Can I Do?
Unfortunately, it is extremely difficult to negotiate “I don’t want to pay” *after* you have already signed the contract. The best time to negotiate was before you signed it.
So, as your renewal timing approaches, what are your options?
Option 1: Pay the renewal fee and continue living in your current home.
Moving to a new place involves initial costs (key money, deposit, etc.) and moving company fees, which can add up to 4-6 months’ rent. Paying the renewal fee (around 1 month’s rent) is almost always cheaper in total.
Option 2: Use the renewal timing as a chance to move to a new home.
“If I have to pay one month’s rent anyway, I’d rather move to a better place!” This is also a valid way of thinking. This is a good opportunity to consider moving, especially if you are dissatisfied with your current room or if the renewal fee is extremely high.
Willow Can Also Introduce “No Renewal Fee” Properties!
This “Koushin-ryou” system is very confusing and a significant burden for foreigners, isn’t it? We at Willow are a company that fully supports your goal of “being glad you came to Japan.”
That’s why when we introduce properties, we honestly explain not only the monthly rent but also all the hidden costs, like how much you’ll have to pay in two years for renewal fees.
We also specialize in properties that do not charge a renewal fee (like UR apartments) or have very low renewal fees. If you are thinking, “I want to move when my contract is up for renewal…” please come and talk to us.
We want to ensure your life in Japan isn’t troubled by unnecessary expenses. As your “big brother or sister in Japan,” we will help you find the best plan.
Feel free to ask us about renewal fees or your next move on LINE!
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