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Renter’s non-payment in Japan

Assumed that you own a real estate in Japan and receive rental fee from your renter.

However your renter may fail to pay rental fee for you. In that case it may be better to know about legal matters relating to non payment of rental fee.

If your renter (Mr. R) does not pay rental fee for you, you may demand for terminate lease contract and/or payment of back rent and damages and surrender from your real estate.

Even if Mr. R does not pay rental fee for one months, you can not terminate lease contract. Once you and Mr. R have concluded lease contract, it binds both parties.

Even if lease contract stipulates that you can terminate lease contract if Mr. R does not pay rental fee for one month, such agreement is void.

Lease contract is based on fiduciary relationship. So, in order to terminate lease contract, existence of incident that can break such relationship, trust.

Generally if Mr. R does not pay rental fee for three months, it may be reason to terminate lease contract.

However if there are other reasons that can break fiduciary relationship, trust from owner, you may terminate lease contract without non payment of 3 months rental fee.
( for example, Mr. R rents out your real estate to other person  without your approval )

Court house process conducted by Shihoshoshi lawyer.

Shihoshoshi lawyer is different from Attorney. So, generally Shihoshoshi lawyer can not be agent of process in court house. Shihoshoshi lawyer can not participate in lawsuit on your behalf. However Shihoshoshi lawyer can engage in following activity.
1  Making legal document to be submitted to court house.
So, Shihoshoshi lawyer can make legal complaint (Sojou etc)
2  Being an agent of process performed in minor court as far as the amount of object of suit (sued amount) is 1.4 million yen or less.

In the case you make lawsuit and demand for surrender of renter from your real estate, 50% of appraised value of your building is sued amount (amount in controversy). Appraised value of real estate and market price is totally different. Even if market price of a specific real estate is 15 million yen, appraised value may be 1.5 million yen.

In the case you make lawsuit and demand for payment of back rent, the amount of back rent will be sued amount.

If you are not fluent in Japanese language and hire a bilingual attorney, his/her fee will be higher than ordinary case. You may pay fee of 1 million yen to demand for 300,000 yen. In that case you may want to make lawsuit without hiring such attorney.

In the case Shihoshoshi lawyer can not be your agent, you are required to come to court house and proceed the process. However your Shihoshoshi lawyer will provide necessary support for you at court house.

Flow of procedure

Assumed that your rent (Mr.R) does not have any intention to pay you rental fee. Mr. R has not paid rental fee for 5 months. So, you have decided to make lawsuit without hiring an attorney, but hire an Shihoshoshi lawyer.
In this case, you will pay your Shihoshoshi lawyer retainer fee. Shihoshoshi lawyer will send a content certified letter to your renter within one month. This letter says that if Mr.R does not pay back rent within 2 weeks, you will revoke lease contract. This letter is one of proof for lawsuit. If it was possible , you and Shihoshoshi lawyer will meet  with Mr.R. Then if he has changed his mind and paid non payment, you will pay contingency fee. The amount will be some 100,000 yen. If Mr. R does not pay back rent, Shihoshoshi lawyer will prepare necessary documents and file lawsuit. After about one months from filing, trial date will be designated by court house. Then, if you win a lawsuit (about within 3 months from filing of lawsuit), you will pay incentive fee. If Mr. R does not surrender from your real estate even after your win, you need to apply for compulsory execution. Then a person from court house visits (within two weeks from your winning) your real estate and orders Mr. R to leave the real estate within one month. In this case you will be requested to pay fee for application for compulsory execution, too. If Mr.R does not surrender from your real estate within one month, compulsory executor removes all belongings from your real estate and keep it at warehouse.
And if you can receive back rent from Mr. R, you will pay your Shihoshoshi Lawyer a part of back rent. It may be 20% of money received.

Other than these fees, you are required to pay government fee, fee for compulsory executors ( their fee may be more than Shihoshoshi lawyer‘s fee), fee for warehouse. However in most of cases, if you win the lawsuit, Mr.R will surrender from your apartment before compulsory execution.

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