What is the so-called “Tokyo Rule” when renting in Tokyo?

Photo by ANTONI SHKRABA productionIn Tokyo’s bustling real estate market, disputes between landlords and tenants have historically been a concern, particularly regarding responsibilities for property repairs and restoration.  

To address these issues, the Tokyo Metropolitan Government implemented the “Tokyo Residential Tenancy Dispute Prevention Ordinance” (often referred to as the “Tokyo Rule”) in October 2004.  

This ordinance aims to prevent conflicts by clearly defining the obligations of both parties in rental agreements. 

Understanding the Ordinance

An actual “Tokyo Rule” form

The ordinance mandates that real estate agents must provide tenants with a document entitled “Explanation Based on the Tokyo Residential Tenancy Dispute Prevention Ordinance” during the leasing process. This document outlines: 

• Restoration Responsibilities at Move-Out: Clarifies which party is responsible for restoring the property to its original condition; distinguishing between natural wear and tear (typically the landlord’s responsibility) and damages caused by the tenant. 

• Repair Duties During Tenancy: Specifies maintenance obligations, ensuring both parties understand their roles in property upkeep. 

• Contact Information for Repairs and Maintenance: Provides clear points of contact for addressing repair and maintenance issues, facilitating prompt communication. 

Scope of Application 

The ordinance applies to: 

1. Residential Rental Properties within Tokyo: Commercial properties are excluded. 
2. New Lease Agreements Initiated on or After October 1, 2004: Renewal contracts are not covered. 
3. Transactions Mediated or Represented by Licensed Real Estate Agents: Private agreements without agent involvement are exempt. 

It’s important to note that even if a real estate agent operates outside Tokyo, the ordinance applies when they broker leases for residential properties within Tokyo. 

Obligations of Real Estate Agents 

Agents are legally required to: 

• Provide the Ordinance Explanation Document: Ensure tenants receive and understand the document during the leasing process. 

• Offer Clear Explanations: Discuss the contents of the document with both landlords and tenants to prevent misunderstandings. 

Impact of the Ordinance 

Since its implementation, the ordinance has: 

• Reduced Disputes: By clearly defining responsibilities, it has minimized conflicts over repair and restoration costs. 

• Promoted Transparency: Both landlords and tenants have a better understanding of their obligations, leading to more harmonious rental relationships. 

Adoption Beyond Tokyo 

While the ordinance is specific to Tokyo, its effectiveness has led to increased adoption of similar practices in neighboring prefectures. Real estate agents in areas like Kanagawa, Chiba, and Saitama may voluntarily provide similar explanatory documents to promote transparency and prevent disputes, even though they are not legally mandated to do so. 

The Tokyo Residential Tenancy Dispute Prevention Ordinance serves as a valuable framework for fostering clear communication and understanding between landlords and tenants. By outlining responsibilities and expectations, it helps prevent disputes and contributes to a more stable and transparent rental market in Tokyo. 

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