The kagi kōkan-dai (鍵交換代, the “key replacement fee” charged when a new tenant moves in) is a distinctively Japanese line item that has no exact equivalent in most Western leasing markets — and it is one of the most common sources of friction between tenants and landlords or management companies in Japan. The Ministry of Land, Infrastructure, Transport and Tourism (国土交通省, MLIT) has published guidelines stating that, in principle, the landlord should bear this cost. Yet in day-to-day practice, the custom of billing it to the incoming tenant remains deeply entrenched. At INA&Associates, we have managed a large number of leasing transactions, and our experience is consistent: when this cost is left ambiguous at the time of signing, it quietly erodes tenant trust and often resurfaces as a dispute at move-out. This guide sets out, from the perspective of a rental property owner — including international investors who hold or are considering Japanese residential assets — how the key-replacement cost is allocated in practice, and how to handle it correctly.
Why a Key Replacement Is Needed When a New Tenant Moves In
Even when a departing tenant returns every key issued to them, there is no way to be fully certain that a spare was never cut during their tenancy. If a spare key remains in someone else's hands after they move out, the unit carries a real risk of unauthorized entry or burglary. This is why replacing the lock at move-in functions as a core security measure protecting the incoming tenant — not a bureaucratic formality bolted onto the leasing process.
Key replacement is an investment in tenant safety and in the property's asset value, not merely an administrative fee. For an owner, a security failure that traces back to a skipped lock change can damage a property's reputation and occupancy rate for years. Replacing the lock is not a legal obligation in Japan — it is technically optional — but unless the tenant specifically declines it, we believe it should be standard operating practice for every unit turnover.
For investors used to US, UK, or Australian rental norms, this may look like an unfamiliar layer of ceremony around something as small as a lock. In many Western markets, lock changes are left to the tenant's discretion or bundled loosely into general maintenance. In Japan, by contrast, the key-replacement fee is treated as its own distinct cost category, itemized separately in the move-in paperwork — a difference worth understanding before you underwrite a Japanese rental asset's initial cost structure.
Why Tenants Should Never Rekey the Unit on Their Own
To save money, some tenants change the lock themselves without notifying the management company or landlord. This can constitute an unauthorized alteration of the property and a breach of the lease agreement. The lock cylinder is part of the building's fixtures, and modifying it without permission complicates both the genjō kaifuku (原状回復, restoration-of-original-condition) assessment and the final move-out settlement. If a tenant raises this idea, always instruct them to obtain approval first. Unauthorized work can leave the owner with no choice but to bill the tenant for a contractual penalty or restoration costs.
Who Should Actually Pay for Key Replacement?
In practice, tenants end up paying in a large share of cases, but this is not because the law clearly assigns the cost to them — no statute settles the question either way. Understanding this gap between custom and legal principle is the starting point for handling the issue honestly as an owner.
MLIT Guidelines State the Landlord Should Pay
MLIT's published guidance, the Genjō Kaifuku wo Meguru Toraburu to Gaidorain (原状回復をめぐるトラブルとガイドライン, “Guidelines on Disputes Concerning Restoration to Original Condition”), addresses key replacement directly. Because turnover between tenants is a property-management matter, the guideline concludes that the landlord (賃貸人, the lessor) should bear the cost. The logic is straightforward: preparing a unit for its next occupant is fundamentally a management cost that belongs to the owner's side of the ledger, in the same way that repainting a hallway or servicing shared equipment would be. Note, however, that this guideline is not binding law — it carries no legal force — and the cost allocation that ultimately governs a specific tenancy is whatever the lease contract states.
Why Tenant-Paid Key Replacement Became Common in Practice
Despite the guideline's principle, tenant-paid key replacement became the market norm largely because owners and agents wanted to keep advertised rents competitive. Passing the cost to the tenant as one line item among several move-in charges has been standard industry practice for decades. But leaning on this custom without transparency carries a real risk: a tenant who happens to know the MLIT guideline may come away distrustful of the arrangement. Disclosing the basis for the charge and who is paying it, clearly and before the lease is signed, does far more to prevent disputes than simply following the prevailing custom.
Unlike, for example, a typical US lease — where a refundable security deposit of roughly one month's rent is expected to cover most move-in preparation costs, including any lock change — Japanese leases separate this out as a distinct, often non-refundable charge alongside other one-time move-in fees such as reikin (礼金, “key money,” a non-refundable gift payment to the landlord) and shikikin (敷金, a refundable deposit). An international investor evaluating a Japanese rental's true acquisition and turnover economics needs to model these itemized fees separately rather than assume they net out the way a Western security deposit would.
What Determines Who Pays: A Case-by-Case Breakdown
Who ultimately pays depends on the cause of the replacement and on what the lease contract specifies. The table below sets out the typical scenarios.
| Scenario | Party responsible in principle | Basis / reasoning |
|---|---|---|
| Routine replacement triggered by tenant turnover | Landlord (the guideline's default position) | Preparing for the next tenant is a landlord-side management cost |
| Contract explicitly assigns the cost to the tenant | Tenant (valid if properly agreed) | Governed by a tokuyaku (特約, special contract clause); requires clear disclosure beforehand |
| Replacement due to the tenant losing a key or tenant negligence | Tenant | Breach of the zenkan chūi gimu (善管注意義務, the tenant's statutory duty of care), triggering restoration liability |
| Replacement due to ordinary wear or mechanical failure over time | Landlord | Maintaining building equipment is the landlord's responsibility |
Even when the contract assigns the cost to the tenant, it is essential to carefully explain the cost breakdown and the reasoning behind it at the jūyō jikō setsumei (重要事項説明, the statutory pre-contract explanation of important matters) stage. Being upfront, including about the parts of the arrangement that are less favorable to the tenant, is what builds a durable, long-term relationship of trust — a principle that matters just as much to an owner managing a single Tokyo unit remotely from abroad as it does to a local landlord.
Typical Replacement Costs by Key Type
Security performance and cost vary substantially by lock type. As an owner choosing equipment specifications, you need to weigh not just the up-front cost but also the fit with your target tenant profile and the building's overall grade. The figures below are general benchmarks only; actual pricing varies by region, vendor, and scope of work.
| Key type | Characteristics | Typical replacement cost |
|---|---|---|
| Standard cylinder key (pin- or disc-tumbler) | Low cost, widely used; standard security level | Roughly ¥10,000–13,000 (approx. $65–84 at 155 JPY/USD) |
| Card key | Difficult to duplicate; higher security | Roughly ¥10,000–19,000 (approx. $65–123) |
| Dimple key | Pick-resistant; high security | Roughly ¥20,000 (approx. $129) |
| Electronic lock / auto-lock integrated system | Cost includes installation work | Roughly ¥20,000–40,000 (approx. $129–258) |
For a US or UK investor, these figures will look modest in absolute terms, but they are worth benchmarking against your target rent band: a ¥20,000–40,000 (approx. $129–258) electronic-lock upgrade on a compact central-Tokyo studio can be a meaningful percentage of a single month's rent, and should be underwritten as part of your unit-turnover cost model rather than treated as a rounding error.
Always Confirm the Cost Breakdown
The key-replacement fee is made up of parts cost (the lock cylinder and key itself) and labor cost (the work fee and any call-out charge). When you receive a quote, check that the breakdown is itemized and that no vaguely labeled charges have been added on top. This matters even more when the tenant is the one being asked to pay — a transparent breakdown is what makes the charge feel legitimate rather than arbitrary.
Balancing Security and Cost
A more secure lock costs more up front, but it also increases tenant peace of mind and the property's marketing appeal. The right security level differs depending on your target demographic — a single-woman-oriented unit and a family-oriented unit call for different standards. From a leasing and vacancy-prevention standpoint, we place real weight on choosing a specification that is neither excessive nor insufficient for the unit's positioning.
What to Do When a Key Is Lost or Damaged
When a key-related problem arises after move-in, getting the initial response and the cost-allocation decision right matters. If the cause is tenant negligence, the tenant pays; if the cause is age-related wear or a mechanical failure, the landlord pays as a matter of principle.
The Practical Workflow When a Key Is Lost
- Have the tenant contact the management company immediately
- Given the security risk involved, replace the entire lock cylinder as a rule — not just the missing key
- Arrange the work through a designated or trusted vendor and keep a record of the work performed
- Retain the replacement key and the work report, and clearly document which party bore the cost
When a key is lost, simply cutting an additional spare does not eliminate the security risk — only replacing the entire cylinder restores real safety. Sharing this reasoning with the tenant up front makes the requirement far easier for them to accept.
Key Replacement at Move-Out: What Owners Need to Watch For
Treating every move-out key replacement as a routine restoration charge to be billed automatically to the departing tenant is a practice that needs care. As covered above, the MLIT guideline treats a routine tenant-turnover replacement as a landlord-side cost. Billing a departing tenant for key replacement when there has been no fault on their part can become the spark for a dispute over the shikikin seisan (敷金精算, the final settlement and return of the refundable deposit).
That said, if the tenant lost a key during the tenancy, or clearly damaged the lock through negligence, there is legitimate room to bill for it separately at move-out. The practical rule of thumb is to base the allocation decision on whether the underlying cause traces back to tenant fault. Keeping the move-in contract terms and the move-out handling consistent with each other makes it far easier to explain the charge later — and for a landlord based overseas managing a Japanese unit through a local property manager, having that consistency documented in English as well as Japanese is worth insisting on.
Contract and Operational Points Every Owner Should Get Right
How key-replacement costs are handled feeds directly into how your listing terms are structured and into the quality of post-move-in management. Here are the practical points that matter most from an owner's perspective.
Spell the Cost Out in the Contract and the Pre-Contract Disclosure
If the tenant is to pay, state the amount, the scope, and the reasoning in the lease contract, and reinforce it verbally at the jūyō jikō setsumei stage. Proceeding with the contract while the arrangement stays vague is precisely what causes a tenant to feel misled once they later learn about the MLIT guideline. The more candidly this is disclosed up front, the more stable the relationship remains after move-in.
Managing Designated Vendors and Fair Pricing
Having the management company designate an approved vendor is a reasonable way to guarantee both workmanship quality and security standards. But pricing that strays far from the market rate breeds tenant resentment. Periodically reviewing quotes and keeping pricing at a fair level is, in the end, what protects the property's reputation.
Key Replacement as a Long-Term Investment
A lock protects a tenant's safety and possessions. Rather than prioritizing short-term cost savings alone, owners should keep sight of how security quality and tenant satisfaction compound into long-term asset value. We believe that putting each individual tenant's peace of mind first is exactly what underpins stable, sustainable rental property management over the long run. For related material, see our guide to rental property management for owners.
Summary
The key-replacement fee sits in a genuinely contested space: the MLIT guideline treats it as a landlord cost, while long-standing market practice keeps pushing it onto the tenant. What matters is not resolving that tension in the abstract, but never leaving the allocation ambiguous — basing the decision instead on the actual cause and on what the contract says. Disclose the basis and the responsible party honestly at move-in, and decide move-out cases based on whether fault lies with the tenant. Holding that consistent standard is what builds tenant trust and, over time, underpins a stable rental-management business — a principle that applies whether the owner is a domestic management company or an overseas investor holding a Japanese asset through a local partner.
Frequently Asked Questions
Can a tenant refuse the key replacement at move-in?
Because key replacement is optional in principle, a tenant can in some cases decline it. That said, some properties designate it as mandatory. If a tenant declines, they should first understand the risk that a spare key from a previous tenant may still exist, and make the decision on that basis. Owners are expected to walk the tenant through the security reasoning carefully before accepting a refusal.
If the contract states the tenant pays, is that clause automatically valid?
A tokuyaku (特約, special clause) assigning the cost to the tenant is generally considered valid as long as the amount and the reasoning were explained in advance and agreed to. However, if the jūyō jikō setsumei disclosure was inadequate, or if the terms are grossly unreasonable, the clause's validity can still be challenged in a later dispute. That is exactly why a clear explanation before signing is non-negotiable.
Can landlords bill tenants for key replacement at move-out?
For an ordinary tenant turnover, the MLIT guideline treats this as a landlord cost, so billing it to every departing tenant as a matter of course should be avoided. However, if the tenant lost a key or damaged the lock through negligence, there is room to charge for it separately. The deciding factor is whether fault lies with the tenant.
Who pays to switch to a smart lock?
A smart-lock upgrade requested by the tenant counts as an alteration of the unit's original condition (genjō henkō, 原状変更), so it first requires the landlord's approval. Who pays depends on what is agreed, and the tenant may be required to restore the original lock at move-out. When the owner installs a smart lock as a building upgrade, by contrast, the landlord typically covers the cost as a matter of course.
