REALWorld Law

Commercial leases

Initial costs

What costs if any, other than rent, are payable by a tenant at the start of a lease?

Japan

Japan

Security deposit

In most cases, a lessee is obliged to pay a security deposit when executing a new lease. The security deposit amount differs depending on the location of the premises and on the nature and type of lease involved (eg residential, office, restaurant or hotel).  In the case of a residential lease, the amount is often equivalent to two to three months' rent.

Key money (residential lease)

For a residential lease, the lessee is sometimes required to pay the lessor key money in an amount often equivalent to one to two months' rent.  Key money differs from the security deposit in that key money will not be returned to the lessee upon expiration of the lease.

Insurance premium

Lessees are often required to purchase home insurance to protect their own personal property in the event of fire damage and/or to protect against claims by third parties.

Stamp duty (land lease)

In the case of a commercial building lease, stamp duty is not payable.  However, in the case of a land lease, stamp duty is payable and the amount levied depends on the amount of the key money paid.