Your tenant of four years hands back the keys and a bill arrives for 218,000 JPY. The instinctive reaction is that the tenant should pay it, because the unit was spotless when they moved in and it is not spotless now. In Japan that is rarely how the bill lands. Restoration is treated as a shared cost, split by a logic that most overseas owners have never had explained to them, and the tenant’s share is often a fraction of the total.
This guide walks through how that split is decided, using a clearly hypothetical Fukuoka studio. You will see which questions determine each line, why a long tenancy shifts cost toward you rather than away, and where assessed liability and actually recovered money part company.
Restoration is a shared bill, not a tenant bill
The starting point in Japan is that a tenant returns the property in the condition ordinary living would have left it in, not in the condition it was in on day one. Deterioration caused by living in a home normally sits with the owner. It is a cost of holding the asset, in the same category as the repair reserve.
The Ministry of Land, Infrastructure, Transport and Tourism publishes guidance on this, along with move-in and move-out condition checklists, as part of its multilingual support materials for renting. The guidance exists precisely because restoration is one of the most disputed points in Japanese renting. Its whole purpose is to separate what ordinary occupation does to a property from what a particular tenant did to it.
For you as an owner, the practical consequence is simple. Budget for a restoration cost at every turnover, treat any recovery from the tenant as a reduction of that cost rather than as income, and never model a turnover on the assumption that the deposit covers it.
The three questions that decide every line
Every line on a move-out invoice is settled by the same three questions, asked in the same order.
Was it ordinary wear, or was it damage?
Sun fading on flooring, indentations where furniture legs stood, screw holes from a curtain rail the tenant was entitled to fit, general dulling of surfaces: these are what four years of living looks like. A burn, a deep gouge, a pet-scratched door, a wall damaged by something dropped: these are attributable to the tenant.
The line between them is not always obvious, which is exactly why the dated move-in record matters more than any argument made later.
How long did the tenant live there?
This is the part that surprises owners most, and it is the reason a long tenancy can cost you more at the end than a short one. Interior finishes are treated as losing value across the years they are in use. A tenant leaving after four years is not asked to fund a brand new surface at full price, because the surface they damaged already had several years of its life behind it. Their share reflects the remaining value they destroyed, not the replacement cost.
So the same gouge in the same floor produces a very different tenant share at year one and at year eight. Confirm with your manager how the depreciation is being applied on your specific invoice, and against which guidance.
What does the contract actually say?
Japanese tenancy agreements frequently carry special clauses that move a cost from the default position. The most common is a cleaning clause making the tenant responsible for a fixed professional clean on departure, regardless of how well they kept the place. Where such a clause was properly agreed and disclosed at signing, it generally governs.
This is why two identical units in the same block can produce different bills. The invoice follows the contract, not the general principle.
A worked example: a hypothetical Fukuoka studio after four years
Every figure below is invented for illustration. It is not a quoted price, an NTI fee schedule or a client’s real invoice.
Property: one studio unit, Fukuoka. Rent 62,000 JPY per month. Deposit held: one month, 62,000 JPY. Tenant: single occupant, four years, no arrears.
| Item | Full cost (JPY) | Tenant share | Owner share |
|---|---|---|---|
| Professional clean, fixed contract clause | 33,000 | 33,000 | 0 |
| Wall covering, whole unit, replaced | 68,000 | 8,000 | 60,000 |
| Flooring, one deep gouge near the entrance | 25,000 | 20,000 | 5,000 |
| Kitchen unit door, hinge failed with age | 14,000 | 0 | 14,000 |
| Air conditioner replaced, 11 years old | 78,000 | 0 | 78,000 |
| Totals | 218,000 | 61,000 | 157,000 |
Read the pattern rather than the numbers. The tenant carries the clause-based clean in full, a small depreciated share of the wall covering, and most of one identifiable gouge. Everything driven by age carries across to you. Out of a 218,000 JPY invoice, roughly 28% is assessed to the tenant.
The air conditioner is worth pausing on. An eleven year old unit reaching the end of its life during a tenancy is not a tenant matter at all. It is a capital decision you were always going to face, and it happened to surface at turnover.
Assessed liability and what you actually recover
These are two different numbers, and only the first one appears on the assessment.
In the example above, the assessed tenant share of 61,000 JPY sits just inside the 62,000 JPY deposit, so the deposit settles it and 1,000 JPY goes back. That is the comfortable case.
Change one variable. Suppose the assessment comes to 140,000 JPY because of a burn and a damaged door. The deposit covers 62,000 JPY. The remaining 78,000 JPY now has to be collected from someone who has already moved out. What happens next depends on arrangements that were made at the start of the tenancy, not at the end:
- Whether a rent guarantee company is in place, and whether its cover extends to restoration at all or only to unpaid rent
- Whether the tenant accepts the assessment, disputes individual lines, or simply stops responding
- Whether pursuing the balance costs more in time and fees than the balance is worth
Ask your manager to report assessed and recovered as two separate figures. An owner who only sees the assessment believes turnovers cost less than they do.
The costs that are always yours
Some lines never move to the tenant, and knowing them in advance stops you querying an invoice that is already correct:
- Anything at the end of its service life. Water heaters, air conditioners, extractor fans, hinges, seals. Age is not tenant liability.
- Ordinary wear on finishes. Fading, dulling, minor marking consistent with living in a home.
- Upgrades you chose. If a scuffed wall becomes a full redecoration in a better finish to improve the unit’s appeal, the improvement is your investment.
- Vacancy while the work happens. The unit earns nothing for the days it is being restored, and that cost never appears on the restoration invoice at all.
One line is commonly misfiled here. The lock and key change is a real, separate charge and it is easily confused with key money, which is a different thing entirely. In most arrangements the lock change is billed to the incoming tenant rather than to you or the outgoing tenant. Confirm which convention your contract and manager use rather than assuming.
The evidence that decides the argument
Everything above is settled by documentation created at the start, not by how persuasive anyone is at the end.
- A dated, itemised move-in condition record, with photographs, signed or acknowledged by the tenant. Without it, distinguishing a four year old mark from a pre-existing one is guesswork.
- The tenancy agreement itself, including any special clause on cleaning or restoration, and evidence that it was explained at signing.
- Photographs at move-out from the same viewpoints as move-in. Comparable images end disputes that written descriptions prolong.
- Contractor quotations that itemise, so that a share can be calculated per item rather than applied to a single lump sum.
💡 NTI Insight
The turnovers that go badly are almost never the ones with the worst damage. They are the ones where the move-in condition record is thin or missing, because then every single line becomes negotiable and the assessment drifts toward whatever the tenant will accept. If you buy a property with a tenant already in place, ask for the move-in condition record as part of your due diligence, not at move-out. If it does not exist, you have just learned something useful about how the property has been managed, and you should price the next turnover accordingly.
Five questions to ask before the tenant leaves
- Do we hold a dated move-in condition record with photographs for this tenancy?
- Which special clauses in this contract change the default position, and were they properly disclosed?
- How is depreciation being applied to each finish, and against which guidance?
- What is assessed to the tenant, and what do you realistically expect to recover?
- What is the expected vacancy period for the restoration work, and can any of it happen before the keys come back?
For the broader framework on holding your manager to a standard, see our guide on managing your property manager. And if you are buying a property that already has a tenant in it, our article on why a tenant in place does not automatically make a Japanese property safer covers what to check before you inherit the tenancy.
Three things to take away
Restoration is a shared cost by default. Anything driven by age or ordinary living stays with you, and in the hypothetical above that was roughly 72% of the invoice.
Tenancy length works against you at the end. The longer someone lives there, the smaller their share of any given repair, because the surface they damaged had already used up much of its life.
Assessed is not recovered. Track the two figures separately, ask what your guarantee arrangement actually covers, and budget every turnover as a real cost rather than a deposit deduction.
Want a second opinion on a restoration invoice, or on a tenancy you are about to inherit? Book a free 30-minute consultation and bring the paperwork.
This article is for informational purposes only and does not constitute financial, legal or tax advice. All figures shown are hypothetical illustrations, not quoted costs or actual client results. Restoration liability depends on your specific contract, the condition record and the applicable guidance. Consult a qualified Japanese professional about your particular situation.
External source: Ministry of Land, Infrastructure, Transport and Tourism, multilingual rental housing support materials, including move-out restoration guidance and condition checklists.
