Japan's amended Civil Code (law of obligations) provisions on leases took effect on April 1, 2020 — the scope of restoration to original condition and the return of the security deposit (敷金) put into statute, and personal revolving guarantees without a maximum amount void
Source material is a Japanese government announcement (in Japanese); this page is a summary.
The amended Civil Code, in force from April 1, 2020, put into statute that the lessee bears an obligation to restore the property to its original condition for damage arising after receiving the leased object but bears no obligation to restore normal wear and tear or changes due to aging, clarified the definition of the security deposit (敷金) and the rules on its return, and made a revolving guarantee contract concluded by an individual void where no maximum amount is set. It also added provisions that, where the requirements for perfecting the lease against third parties had been met and the leased immovable property is transferred, the position of lessor passes in principle to the transferee, and that the transferee needs registration of the transfer of ownership in order to claim rent. As a transitional measure, the Civil Code before amendment applies in principle to contracts concluded before the date of entry into force and the amended Civil Code to contracts concluded after that date, and where the parties renew a lease contract or a guarantee contract by agreement after the date of entry into force, the amended Civil Code applies. However, where a guarantee contract concluded before the date of entry into force is worded so as to guarantee obligations arising after renewal as well and the guarantee itself has not been renewed by agreement, the Civil Code before amendment applies to that guarantee contract even after the date of entry into force.
Key facts
| Legal basis and entry into force | 「民法の一部を改正する法律」 (平成29年法律第44号 / Act No. 44 of 2017). Enacted on May 26, 2017 and promulgated on June 2 of the same year. In force from April 1, 2020, apart from some provisions |
|---|---|
| Repairs by the lessee | The Civil Code before amendment had no provision setting out in which cases a lessee could carry out repairs itself. The amended Civil Code provides that a lessee may repair the leased object ① when the lessee has notified the lessor that repairs are necessary, or the lessor knew of this, and the lessor does not carry out the necessary repairs within a reasonable period, or ② when there are urgent circumstances |
| Where the leased property is transferred | The amended Civil Code added a provision that, where the requirements for perfecting the lease against third parties had been met and the leased immovable property is transferred, the position of lessor passes in principle to the transferee (the new owner). It also added a provision that the transferee needs registration of the transfer of ownership of the leased immovable property in order to claim rent from the lessee. While the transferee has not completed registration, the lessee may continue to pay rent to the former lessor, and may also deposit the rent in an official depository |
| Restoration to original condition — the principle and the exclusions | The amended Civil Code makes explicit that, while the lessee bears an obligation to restore the property to its original condition for damage arising after receiving the leased object, it bears no obligation to restore normal wear and tear (wear arising from ordinary use and enjoyment of the leased object) or changes due to aging. As examples falling under normal wear and tear or changes due to aging, the pamphlet lists dents and marks on floors or carpets from placing furniture, the wall behind a television, refrigerator or the like turning black (so-called 電気ヤケ), glass broken by an earthquake, and replacement of keys (where there is no breakage or loss of the key); as examples not falling under them, it lists scratches caused by moving work, damage to equipment and the like from inappropriate everyday care or use in breach of the agreed method, tar and odour from cigarettes, and scratches on pillars and odour from pets kept in the property |
| Security deposit (敷金) | The Civil Code before amendment had no provision on the definition of the security deposit or on when the right to claim its return arises. The amended Civil Code defines the security deposit as 'money delivered by the lessee to the lessor, whatever name it goes by, for the purpose of securing obligations of the lessee to the lessor for the payment of money arising from the lease, including rent obligations', and, following case law, clarifies the rule that the obligation to return the security deposit arises at the point when the lease contract has ended and the leased object has been returned, and that its amount is the balance of the security deposit received after deducting the amount of monetary obligations that have arisen up to that point |
| Maximum amount for a personal revolving guarantee | For a revolving guarantee contract in which an individual (a person other than a corporation such as a company) becomes the guarantor, the guarantee contract is void unless a 'maximum amount' (極度額), the ceiling on the amount for which the guarantor bears payment liability, is set. The maximum amount must be set clearly, for example as '○○ yen', and stated in writing |
| Grounds for fixing the principal | The Ministry of Justice pamphlet summarizes that, in a revolving guarantee contract in which an individual becomes the guarantor, where any of the following circumstances (grounds for fixing the principal) has occurred, the principal obligations arising after that fall outside the guarantee: ① when the creditor has applied for compulsory execution or the exercise of a security interest against the guarantor's assets, ② when the guarantor has received a decision to commence bankruptcy proceedings, and ③ when the principal obligor or the guarantor has died. The pamphlet directs readers to the guarantee pamphlet on the Ministry of Justice website for details of the rules on guarantees |
| Transitional measures | For contracts such as leases and guarantees, the Civil Code before amendment applies in principle to contracts concluded before the date of entry into force, and the amended Civil Code applies to contracts concluded after that date. Where the parties renew a lease contract or a guarantee contract by agreement after the date of entry into force, the amended Civil Code applies in the same way as where a contract is newly concluded after that date. On the other hand, where a guarantee contract concluded before the date of entry into force is worded so as to guarantee obligations arising after renewal as well and the guarantee itself has not been renewed by agreement, the Civil Code before amendment applies to that guarantee contract even after the date of entry into force |
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The 「民法の一部を改正する法律」 (平成29年法律第44号 / Act No. 44 of 2017), enacted on May 26, 2017 and promulgated on June 2 of the same year, took effect on April 1, 2020, apart from some provisions. The Ministry of Justice pamphlet 「賃貸借契約に関するルールの見直し」 explains the amendments relating to leases under the headings of rules during the lease, rules at the end of the lease, and rules on guarantees of obligations arising from a lease contract. The amended Civil Code provides that a lessee may repair the leased object when the lessee has notified the lessor that repairs are necessary, or the lessor knew of this, and the lessor does not carry out the necessary repairs within a reasonable period, or when there are urgent circumstances. It also added provisions that, where the requirements for perfecting the lease against third parties had been met and the leased immovable property is transferred, the position of lessor passes in principle to the transferee and the transferee needs registration of the transfer of ownership in order to claim rent; it made explicit that the lessee bears an obligation to restore the property to its original condition for damage arising after receiving the leased object, but bears no obligation to restore normal wear and tear or changes due to aging; and it clarified the definition of the security deposit (敷金) and the time at which the obligation to return it arises. On guarantees, a new rule provides that a revolving guarantee contract concluded by an individual is void if no maximum amount is set. As a transitional measure, for contracts such as leases and guarantees, the Civil Code before amendment applies in principle to contracts concluded before the date of entry into force and the amended Civil Code applies to contracts concluded after that date. However, where the parties renew a lease contract or a guarantee contract by agreement after the date of entry into force, the amended Civil Code applies. On the other hand, where a guarantee contract concluded before the date of entry into force is worded so as to guarantee obligations arising after renewal as well and the guarantee itself has not been renewed by agreement, the Civil Code before amendment applies to that guarantee contract even after the date of entry into force.
Summaries below are factual notes based on government announcements and primary sources — not evaluations or opinions.
Summaries reflect national-level programs. Municipal (city/ward/town) programs may differ — confirm with the official desk before applying.
FAQ
Does the lessee have to pay for wallpaper faded by sunlight as well?
The Ministry of Justice pamphlet explains that the amended Civil Code makes explicit that the lessee bears an obligation to restore the property to its original condition for damage arising after receiving the leased object but bears no obligation to restore normal wear and tear or changes due to aging. The pamphlet uses a situation in which the lessee is asked to bear the cost of replacing faded wallpaper (日焼けしたクロス) as the opening situation for this clarification of restoration to original condition (事例3, Case 3). Examples given as falling under normal wear and tear or changes due to aging are dents and marks on floors or carpets from placing furniture, the wall behind a television, refrigerator or the like turning black (so-called 電気ヤケ), glass broken by an earthquake, and replacement of keys where there is no breakage or loss; examples given as not falling under them are scratches caused by moving work, damage to equipment and the like from inappropriate everyday care or use in breach of the agreed method, tar and odour from cigarettes, and scratches on pillars and odour from pets kept in the property. The basis for judging individual cases goes only as far as the examples set out in the pamphlet, and the pamphlet does not present criteria beyond that.
Do the new rules also apply to a lease contract concluded before April 1, 2020?
According to the pamphlet's explanation of the transitional measures, for contracts such as leases and guarantees the Civil Code before amendment applies in principle to contracts concluded before the date of entry into force, and the amended Civil Code applies to contracts concluded after that date. In the pamphlet's example, where both the lease contract and the guarantee contract were concluded before the date of entry into force, the newly added provisions on the security deposit such as Article 622-2 of the Civil Code do not apply. However, where the parties renew a lease contract or a guarantee contract by agreement after the date of entry into force, the amended Civil Code applies. On the other hand, the pamphlet explains that where a guarantee contract concluded before the date of entry into force is worded so as to guarantee obligations arising after renewal as well and the guarantee itself has not been renewed by agreement, the Civil Code before amendment applies to that guarantee contract even after the date of entry into force.
What happens if no cap on the amount is written for the guarantor?
In a revolving guarantee contract in which an individual becomes the guarantor, the guarantee contract is void unless a 'maximum amount' (極度額), the ceiling on the amount for which the guarantor bears payment liability, is set. The maximum amount must be set clearly, for example as '○○ yen', and stated in writing.