Japanese lease law is tenant-friendly in ways that surprise foreign occupiers — and tenant-costly in others. Understanding four concepts covers most of what matters.
Futsū shakuya: the evergreen lease
The standard lease runs for two years and renews practically automatically: under the Land and Building Lease Act a landlord can refuse renewal only with "just cause", which courts interpret narrowly. In practice a futsū tenant can stay as long as they wish, and rent increases must be negotiated or arbitrated.
Teiki shakuya: the fixed-term lease
A fixed-term lease ends on the agreed date, full stop. Landlords of premium towers and buildings with redevelopment plans increasingly prefer it. Nothing prevents signing a new lease afterwards — but the landlord holds the cards, so ask early about re-contracting policy.
The deposit
The shikikin or hoshōkin of 6–12 months' rent is the single largest cash item in a Japanese office move. It earns no interest and sits with the landlord for the life of the lease. Serviced offices, by contrast, take 1–2 months — one reason they have boomed among foreign entrants.
Restoration (genjō kaifuku)
At exit the tenant returns the office to its original state at the tenant's expense: partitions out, floors and ceilings repaired, sometimes even standard wear repainted. Restoration typically costs the equivalent of 2–4 months' rent and must usually be done by the landlord's designated contractor. Factor it into any comparison between a conventional lease and flexible space.
Always have the Japanese contract reviewed — the Japanese text prevails over any translation, and clauses on early termination (usually 6 months' notice) and rent revision deserve special attention.
