Once you have decided on the property you want to move to, you will sign a contract with a real estate agency.
In that case, the contract will always be put in writing.
The contract that is signed at this time is called a lease agreement, and it lists the period for which you will rent the property, the rent, and other rules for the room.
Furthermore, the lease agreement serves to protect you if any problems arise with the property, and if you do not have a lease agreement, the terms of the contract may be changed without your permission, making it unfavorable to you.
Therefore, in this article, we will clearly explain how to correctly read real estate rental agreements and what points you should be careful about so that you do not find yourself at a disadvantage.
We will also introduce some frequently asked questions about rental agreements, so please read to the end.
What is a Lease Agreement?
A lease agreement is a contract that is signed between a tenant and a landlord when renting land, a building, etc.
The information included in the contract includes details such as the rental period, the monthly rent, the rules for use, and who will be responsible if the item is damaged.
When renting a room to live alone, there are also rules regarding how to handle the room's facilities and equipment, how to pay rent, and how to return the room to its original state when you move out.
The Importance of Lease Agreements
The rental agreement serves as evidence of the rules between you and the landlord, and will protect you from any trouble.
Particularly important parts of the document include the rent payment date, who is responsible for any damage caused to the property, the request for moving out (termination of the contract), and restoration of the property to its original state after moving out.
If you do not pay careful attention to these points, you may be held liable for damages if you encounter any problems.
Furthermore, having a lease agreement makes it possible to clearly determine who is responsible, so even if unreasonable liability is imposed, it may be invalid.
Do not lose your rental agreement while you are living in the property, and be sure to keep it in a place where you can easily access it.
Difference from the Explanation of Important Matters
In addition to the rental agreement, you will also receive a document called an Important Information Explanation Document when signing a lease for a rental property.
A rental agreement is a document that exchanges mutual understanding about the rules regarding the property (such as a room), while an important information explanation document is an explanation of the rented property to the landlord.
In other words, the important information explanation document and the rental agreement each have different roles.
In particular, when renting real estate such as a room or land, you cannot enter into a contract unless the important information document is explained by a licensed real estate agent at the real estate company.
After understanding the important details of the rental property, a rental agreement will be signed between the tenant and the landlord.
How to read a rental agreement correctly
A rental contract is basically a document prepared by a real estate agent that you sign and stamp.
The lease agreement format, which is specialized for real estate rentals, includes the object of the lease (contents of the property), contract period, rent, etc.
Reference material: Standard rental housing contract
First, please take a look at the quick reference chart below to understand what items need to be checked in the rental agreement.
| Items to be included in the rental agreement | |
|---|---|
| Object of lease | Name of the building, land ownership, residential area, and attached facilities |
| Contract Period | Room contract period |
| Rent etc. | Monthly rent and maintenance fee, transfer date and transfer details |
| Landlords and management companies | Landlord and management company contact information |
| Tenant and cohabitants | Renter's name and contact details |
| Rent guarantee company or guarantor | Name of guarantor and guarantor company |
| Provisions | Liability for fires and deadlines for notice of termination, etc. |
| Other special provisions | Penalties for short-term cancellations and house cleaning fees, etc. |
Now let us explain each item in the above table in more detail.
Object of lease
The first section of the lease agreement describes the details of the property, and mainly covers:
- Building name and ownership
- Dwelling unit
- Attached facilities
The building name and location includes the name and address of the apartment building, how it was built, its structure, the number of units, and whether construction has been completed.
In particular, with regard to construction and structure, apartments and condominiums are often shared buildings, while in the case of detached houses, single-family homes are circled.
The structure is stated as either wooden or non-wooden, and for non-wooden structures, the type of structure is stated, such as reinforced concrete (RC) or steel-framed (S) construction.
The apartment section lists the room number, layout, and area of the room, as well as whether or not the property has any facilities, the type of gas, water, sewerage, and electricity contract amperes.
The attached facilities include information on whether or not there is a car or bicycle parking area, the number of cars that can be accommodated, and whether or not there is a storage shed, etc.
Contract Period
The contract period for a room will state the start and end dates, and indicate when you can occupy the room.
There are two types of lease contracts: ordinary lease contracts and fixed-term lease contracts. In the case of fixed-term lease contracts, the contract needs to be renewed periodically, so this is an item to confirm when that will happen.
Rent etc.
The third item, Rent etc., lists the monthly rent as well as whether or not there are any maintenance fees or lump sum payments.
In addition, the bank details for transferring rent, financial institution, and monthly payment date are also listed.
The same goes for the deposit, which will state how many months' rent you have deposited, so be sure to check this just like the contract period and rent.
Landlords and management companies
At the bottom of the rent slip is the contact information for the landlord or management company, which serves as the emergency contact information in case something happens in the room.
If a management company is listed as the contact point, the name and address of the property owner will be listed.
If the contact information for a management company is listed, it is generally the management company that manages the room, and if anything happens, the management company will be the contact point.
Tenant and cohabitants
The fifth section lists the names of the tenant and any roommates, but mainly contains the tenant's contact information.
Your mobile phone number is often listed so that the landlord can contact you easily, but if your phone number changes for any reason, you should be sure to inform the landlord of your new phone number.
If you have any roommates, their names must also be listed, and it will be a breach of contract if it is discovered that anyone other than the tenant is living in the property.
Remember that the tenant and roommate are listed so that the landlord can verify that the tenant and roommate are actually residing in the property.
Rent guarantee company or guarantor
The sixth item lists the name of the guarantor and the guarantor company to be used, and depending on the form, there may be a form for the guarantor and a form for the guarantor company.
In the case of a joint guarantor, the name of a relative or someone close to the borrower will be listed, and if a guarantor company is used, the name of the guarantor company and contact information will be listed.
In the unlikely event that the tenant fails to pay rent or causes damage to the property and fails to take responsibility for compensation, the guarantor or guarantor company will be held liable for compensation.
Provisions
The clauses contain important information such as details regarding unpaid rent, room fixtures, and responsibility in the event of a fire.
This article specifically covers the deadline for notice of termination and the renewal period.
There will be some legal terms that you may not understand, such as A and B, but if there is anything you don't understand, be sure to ask the person in charge at the real estate company.
Other special provisions
Although it varies depending on the property, there are often special terms listed at the end of the lease agreement.
The special terms and conditions section often includes information about assumed rent, special provisions regarding house cleaning upon moving out, and penalties for short-term termination.
Although they are written in an inconspicuous place on the document, special terms and conditions may contain important information.
The special terms and conditions contain important and essential information just like the clauses, so be sure to understand them well.
Reference material: Example sentences regarding special provisions in sales contracts and lease contracts
Points to note about rental agreements
We have explained how to read a lease agreement correctly, but there are some points you should be sure to check before receiving the explanation and signing.
In particular, it contains detailed information about etiquette regarding use of the property and moving out.
Here are some points to note about rental agreements:
First, please take a look at the quick reference chart below to understand the important points to note about the rental agreement.
| Points to note about rental agreements | |
|---|---|
| Payments other than rent | Deposit, key money, common area fee, guarantee fee, renewal fee, parking fee, etc. |
| Termination notice deadline | Deadline to notify the owner of contract termination when moving out |
| Is there a penalty? | Are there any penalties for moving out before the specified period of residence is met? |
| Prohibited items at the property | Keeping pets, nuisance behavior, subleasing without permission, etc. |
| Responsibility for restoration to original condition | Who is responsible for damage to facilities? |
Now let us explain each item in the above table in more detail.
Payments other than rent
When renting a property, in addition to the rent, there are other costs such as maintenance fees to be paid every month.
The rent section lists common charges and parking fees, so be sure to check the amount, payment due date, and payment method.
In addition, the deposit (security deposit), key money, and renewal fees required to sign a contract for the property will also be listed, so be sure to check it.
Termination notice deadline
The terms of your lease agreement also state the deadline for giving notice to terminate the lease.
A notice of termination means informing the landlord of your intention to move out, and many properties state that the deadline for notice of termination is one to three months in advance.
If you cancel after the notice period has expired, you will be charged an additional month's rent after you move out.
Before you move out of the property, be sure to give notice of termination by the specified deadline.
Is there a penalty?
Some modern rental properties incur a penalty if you move out before the specified period of residence.
Whether or not there will be a penalty may be stated in the special terms and conditions, so it is important to check.
In particular, when you are forced to move suddenly due to a transfer or other reason, it is easy to forget about the existence of penalty fees, so it is important to fully understand the amount of the penalty and what will be incurred.
Prohibited items at the property
In every rental property, there are prohibited uses in common areas such as rooms and hallways.
Prohibited acts vary depending on the property, but be sure to check as you may be forced to move out or be asked to pay damages.
As a concrete example, the following is often mentioned:
- Nuisances within the building (noise, vibrations, bad odors, etc.)
- Subleasing of rooms without permission
- Drilling holes in or damaging wallpaper
- Handling of fire
- Keeping pets
- Unauthorized alterations or modifications
In apartment complexes and condominiums, there are other residents, so you need to behave in a way that does not cause offense to others.
You must adhere to all the prohibitions on the property so as not to cause trouble to other residents.
Responsibility for restoration to original condition
Tenants are obligated to restore the property to its original condition when moving out, and must return the property's equipment, flooring, etc. to the state they were in before they moved in.
In particular, the document details who is responsible for any dirt or damage to room facilities, wallpaper, flooring, etc.
When you move out, if the air conditioner remote control in your room is lost or there are holes in the wallpaper, the property cannot be restored to its original condition and you will have to pay compensation.
The rental agreement contains details about compensation for damages in the event of intentional damage or unexpected accidents, so be sure to understand it clearly.
For more information about the scope of responsibility for restoring damage to its original condition, please also refer to the following article:
Frequently asked questions about rental agreements
Next, we will explain some frequently asked questions regarding rental contracts for single-person apartments.
In particular, if you are living in an apartment owned by a friend, you may wonder whether you should enter into a personal contract.
In addition, we will also cover what happens if you rent a property without a rental agreement, so please read on.
Q1. What should I do if I lose my rental agreement?
If you are organizing your paperwork while you are in the tenancy or are asked to submit a contract, you may lose the original documents.
However, since the lease agreement is an important contractual document, some real estate companies refuse to reissue it.
If you lose your rental agreement, we recommend that you contact the real estate company with which you signed the lease and get a copy of the agreement.
Real estate companies are required to keep contract documents for five years, so there is a very good chance that they will still be there while you are still tenancy.
It is important to keep your contract documents safe so as not to lose them, but if you realize that you have lost them, be sure to consult with the real estate company.
Q2. Is a stamp required for a rental agreement?
In conclusion, no stamp is required for a building lease agreement.
However, if you sign a lease for land separately from the property you have signed, a stamp is required.
For example, if you contract for a car park somewhere separate from the property, you will need to enter into a land lease and stamp duty will be payable on the car park.
If there is a parking lot on the same premises as the property, you can use it as part of the property's facilities, so there is no need to enter into a separate parking contract.
Q3. Can I sign a rental contract once I turn 18?
Due to the revision of the Civil Code in 2022, people over the age of 18 can now enter into rental agreements without parental permission.
In other words, anyone over the age of 18 can independently book a room for living alone.
However, the reality is that many landlords (landlords or management companies) require you to have a guarantor or a guarantor company when renting a property.
In reality, it is often difficult to obtain approval from a guarantor company, so guarantors are limited to those who have a family member or who have an income sufficient to pay the rent.
Q4. What happens if I don't have a rental agreement?
There is no problem with renting a room without a rental agreement, but if you get into any trouble with the property, you may be held liable for unnecessary compensation.
One of the roles of a lease agreement is to state who is responsible for damages and the obligation to restore the property to its original condition.
However, if responsibility is not clearly defined, you may end up having to pay compensation for areas that you do not need to pay for.
It is essential to have a rental agreement in place to protect yourself from liability.
Is a rental agreement necessary for private contracts?
A personal lease agreement is a contract in which you rent or lease a room without going through a real estate company, and in this case there is no need to create a written lease agreement.
For example, if you rent a property owned by a friend, you can keep your initial costs low because you don't have to pay a real estate company.
However, by signing a rental agreement, you can avoid trouble if you cause damage to the room's facilities.
They say that even friends should be polite, so we recommend that you sign a rental agreement to maintain good relations with each other.
summary
For those who are signing a rental contract for a property for the first time, we introduced the role of a rental agreement and how to read it correctly.
When signing a contract for a property, be sure to understand what is written in the contract and what you need to pay attention to, and if there is anything in the contract that you don't understand, be sure to check with the person in charge.
Furthermore, be sure to keep the rental agreement in a safe place even while you are residing in the property.
In addition to the rules regarding the property, the lease agreement also contains rules regarding moving out and renewing the lease.
It is important to be sure to follow all the written instructions and to stay in the property in a way that does not cause discomfort to other tenants or the landlord.
