In Japanese residential leasing, the move-out restoration process — known as genjō-kaifuku (原状回復, literally “restoration to original condition”) — is one of the most common flashpoints between landlords and departing tenants. This is a distinctly Japanese framework: unlike many Western rental markets, where a security deposit is simply kept, refunded, or docked for a lump-sum “cleaning fee,” Japan operates under detailed government guidelines that assign specific wear-and-tear items to either the owner or the tenant, item by item. Having been involved in managing a large number of rental properties in Japan, I have seen that most emotional disputes over move-out settlements trace back to one root cause: insufficient documentation at move-in, not disagreement over the rules themselves. Understanding the Ministry of Land, Infrastructure, Transport and Tourism (国土交通省, MLIT) guidelines correctly, and putting the right safeguards in place from move-in, lets both owners and tenants reach a settlement they can each accept as fair.
This article walks through genjō-kaifuku from the ground up: what it means in practice, how the cost-sharing line between owner and tenant is drawn, how depreciation schedules affect the final bill, when a special clause (特約, tokuyaku) can shift normal-wear costs onto the tenant, and the concrete steps that prevent disputes. For an owner coming from a lease market with fixed security-deposit deductions and no move-out inspection culture, this is a genuinely Japan-specific system worth understanding before you buy or manage a rental property here.
What Is Genjō-kaifuku? The Basics of the MLIT Guidelines
Genjō-kaifuku (原状回復) refers to a departing tenant’s obligation to return a rented room to “the condition it was in at move-in.” It does not mean returning the unit to brand-new condition — and this is precisely where many disputes begin, when owner and tenant walk into the final settlement with different assumptions about what “restoration” means.
MLIT’s official guidance, the Guidelines on Disputes over Restoration to Original Condition (原状回復をめぐるトラブルとガイドライン), defines genjō-kaifuku as “restoring the decline in a building’s value caused by the tenant’s intentional acts, negligence, breach of the duty of care, or use exceeding ordinary use” — not simply reversing the passage of time. In practice, the cost-sharing line falls into two categories:
- Normal wear and depreciation (通常損耗・経年劣化): deterioration that naturally occurs through everyday living is the owner’s responsibility
- Damage from intent or negligence: harm caused by the tenant’s carelessness or a deliberate act is the tenant’s responsibility
The logic behind this split is that the cost of restoring normal wear is already priced into the monthly rent. That is why, as a rule, a tenant cannot be billed for deterioration that occurred through ordinary, reasonable use — a cost-allocation principle with no direct equivalent in security-deposit markets where a landlord can deduct broadly for “condition.” For an international owner, this means budgeting normal wear as a built-in cost of rental yield, not something recoverable from the tenant at turnover.
Concrete Examples of the Cost-Sharing Line
The abstract definition alone leaves plenty of room for disagreement, so it helps to work from concrete examples. In practice, a table like the one below, used as shared vocabulary with a tenant, makes the explanation far smoother and far less adversarial.
| Item | Owner’s Responsibility (Normal Wear) | Tenant’s Responsibility (Breach of Duty of Care, etc.) |
|---|---|---|
| Wallpaper | Discoloration from sunlight, small pinholes from tacks | Nicotine staining from smoking, pet scratches, graffiti |
| Flooring | Dents from furniture, sun fading | Stains from spilled drinks, caster-wheel scratches, rot from a neglected water leak |
| Tatami | Discoloration from sunlight | Staining from food and drink, mold from inadequate ventilation |
| Fixtures and equipment | Failure from age, use beyond the useful life | Damage from improper use, soiling from neglected cleaning |
| Fittings and locks | Loosening of fit from age | Lost keys, damaged doors |
The key point is that the very same defect can fall on either side depending on its cause. Discoloration on wallpaper caused by sunlight is the owner’s cost; the same discoloration caused by nicotine residue from smoking is the tenant’s. Whether the cause can be shown objectively is what decides the settlement — exactly why the documentation covered later in this article matters so much.
How the 2020 Civil Code Reform Clarified Restoration Rules
Japan’s Civil Code (民法, Minpō), as revised and enacted in April 2020, took rules that had previously existed only in case law and the MLIT guidelines and wrote them directly into statute. For a foreign investor from a common-law jurisdiction, where landlord-tenant obligations are often set by contract and precedent alone, it is worth noting how deliberately Japan chose to codify these protections — a clearer statutory floor for an international owner to underwrite against.
The Scope of the Restoration Obligation
Revised Civil Code Article 621 provides that a tenant bears the restoration obligation “excluding wear and tear of the leased property arising from ordinary use and profit-earning use, as well as the leased property’s deterioration over time.” This placed the MLIT guideline’s owner/tenant distinction directly into the statute: normal wear and age-related deterioration are, by law, outside what a tenant can be charged for.
Codifying the Duty to Return the Security Deposit
Article 622-2 establishes that once a lease ends and the property is returned, the owner must refund the tenant’s security deposit (敷金, shikikin) minus any unpaid rent or other debts owed. Unlike a US security deposit, which serves a similar collateral function but is often handled with a simple itemized deduction list, shikikin in Japan had historically been treated with less transparency in practice; this article confirms in law that a deposit is collateral, not money an owner is entitled to keep by default. Since this reform, an owner’s duty to explain and itemize a deposit settlement has become considerably heavier.
Five Measures to Prevent Restoration Disputes
The single biggest lever for preventing a dispute is not what happens at move-out — it is what happens at move-in. However precise your calculations are later, if you cannot prove the unit’s condition beforehand, any argument over cost allocation quickly turns into one party’s word against the other’s. I recommend building the following five habits into every tenancy from day one.
- Document the unit’s condition at move-in: record the room in detail with dated photos and video, and share the record with the tenant
- Use a condition checklist: log the state of walls, floors, and fixtures item by item, and have both parties sign it
- Spell out special clauses clearly: state any house-cleaning or air-conditioner cleaning charges as specific yen amounts in the lease itself
- Inspect fixtures periodically: track the condition of equipment during the tenancy and keep those records
- Hold a move-out walkthrough: always inspect the unit together at move-out, and have both sides confirm and sign off on any wear or damage
At INA&Associates, we do not treat this documentation as mere paperwork. Accurate records protect the tenant at move-out, and they protect the owner in equal measure — that is the whole point. A record that works equally well for both sides is the single best dispute-prevention tool available, and for an owner abroad it also means fewer stalled handovers and less legal cost eating into net yield.
Practical Tips for Move-In Documentation
What matters in a record is not volume, but whether it can be verified later. Keep both wide shots that show the whole room and close-up shots of any scuff or stain in detail. Pay special attention to the four corners of each wall, floor seams, plumbing fixtures, and any pre-existing damage. A continuous video walkthrough with the shooting date and time embedded in the file meaningfully strengthens its credibility as evidence.
Running a Move-Out Walkthrough and What to Check on the Day
The move-out walkthrough (退去立会い, taikyo-tachiai) is the critical opportunity to confirm the owner/tenant cost split in person — a step many Western lease markets do not build into standard practice, where a deposit is often settled by mail or a one-line notice. Points that are hard to convey on paper tend to land better when both sides look at the unit together.
The Basic Flow of the Walkthrough Day
- The tenant and the owner (or property manager) walk through the unit together, room by room
- Each area of wear is checked against the move-in records to confirm its cause and which party is responsible
- For any item charged to the tenant, the reasoning is explained carefully and in detail
- The findings are put in writing and signed by both parties
- Keys are returned, and a rough outline of the final settlement is shared
The Attitude That Matters in the Explanation
Conflict during a walkthrough is more often caused by a tenant’s sense that “this was decided unilaterally” than by the amount of money itself. Explaining carefully, step by step, why a cost falls on the tenant — grounded in the MLIT guidelines rather than the owner’s own judgment — does more to prevent an emotional standoff than any other practice. In my experience, being honest even about information that works against you as the owner is what ultimately produces a settlement both sides can accept.
How Far Does a Special Clause Actually Reach?
Some leases include a special clause (特約, tokuyaku) that shifts costs for normal wear onto the tenant, but such a clause is only enforceable if it meets specific requirements. Writing a clause into the contract does not give an owner license to charge a tenant for anything at all.
- The clause must be necessary, and its content must be specific and clear — for example, stating a flat house-cleaning fee as an explicit yen amount, such as ¥30,000 (approx. $195 at ¥155/USD), rather than a vague reference to “cleaning costs”
- The tenant must recognize that the clause requires them to pay for normal wear, and must clearly agree to it
- The clause must not unilaterally harm the consumer’s interests, under the Consumer Contract Act (消費者契約法, Shōhisha Keiyaku Hō) Article 10
Japanese case law has repeatedly held that a vague clause failing to meet these requirements, or one excessively unfavorable to the tenant, can be ruled invalid. A special clause should be understood not as a tool for pushing a burden onto the tenant, but as an agreement that clarifies each side’s responsibility in advance to prevent a later dispute — for an owner, a well-built tokuyaku turns an unpredictable turnover cost into a known, contracted figure.
How to Think About the House-Cleaning Clause
A clause assigning the move-out house-cleaning fee to the tenant is common, but it too is only enforceable if the amount and scope were disclosed at signing and agreed to. Conflating “routine cleaning” with “cleanup of exceptional soiling” and billing for both is a practice to avoid; keeping the scope explicit is simply the honest way to run this clause.
How Is the Depreciation Schedule for Ordinary Wear Calculated?
When calculating a restoration cost, the standard approach reduces the tenant’s share based on the depreciation schedule (耐用年数, taiyō-nensū, literally “useful-life years”) of the fixture involved. For items whose value naturally declines over time, the tenant’s share is prorated against the remaining value at move-out — a system with no real equivalent in flat-rate Western deposit deductions, where a fixture’s age rarely enters the calculation.
| Item | Approximate Useful Life |
|---|---|
| Wallpaper (vinyl-backed “cloth”) | 6 years |
| Carpet | 6 years |
| Cushion flooring | 6 years |
| Flooring (wood) | Follows the building’s own useful life (partial repairs may not factor in years elapsed) |
| Tatami surface (omote) | Treated close to a consumable item (years elapsed may not be factored in) |
| Air conditioner | 6 years |
| Water heater | Long-term as a general guide (varies by maker and model) |
These figures are only general guidance; the actual determination depends on the guidelines, the lease terms, and the fixture’s condition. The right approach is to examine each case against the underlying principle, not to settle on an assumed fixed amount. For portfolio underwriting, it also means older units, or units let to long-tenured tenants, carry a structurally lower recoverable turnover cost — worth factoring into renovation and capex planning at acquisition.
A Worked Example of the Cost-Sharing Ratio
Here is a concrete illustration of how the depreciation logic plays out. Suppose wallpaper with a six-year useful life is stained through the tenant’s negligence after four years of occupancy. In that case, the remaining value is roughly 33% (two years’ worth remaining), and the tenant’s share is generally around 33% of the re-papering cost. The longer a tenant has occupied the unit, the lower their cost share becomes, and once the useful life has fully elapsed, the tenant is, in principle, not billed for the replacement cost itself.
| Years occupied (wallpaper with a 6-year useful life) | Approximate tenant cost share |
|---|---|
| 1 year | approx. 83% |
| 3 years | approx. 50% |
| 4 years | approx. 33% |
| 6+ years | In principle, no cost share (excluding labor for removal and reinstallation) |
That said, even once the remaining value has fallen to essentially zero, if the tenant damaged the fixture intentionally, they may still be asked to cover part of the labor involved in removal or reinstallation. It is important not to oversimplify this into “zero remaining value means zero cost whatsoever.”
Where to Turn, and How Disputes Get Resolved
Even with careful handling, an owner and tenant sometimes cannot agree on the cost split or the final amount. There is no need to jump straight to legal action — knowing the staged options available lets you respond calmly rather than escalating unnecessarily.
- Start with a written discussion: lay out your reasoning in writing, referencing the relevant part of the guidelines together with your documentation
- Use a public consultation service: local consumer affairs centers (消費生活センター) or real estate industry association help desks are available in most municipalities
- Small-claims litigation or mediation: an option when the amount involved is relatively small and the two parties cannot resolve it directly
What matters most is not scrambling for evidence once a conflict has started, but building the record from move-in. With solid documentation in place, most cases move toward resolution at the discussion stage, well before anything formal or costly becomes necessary — a meaningful risk-reduction factor for an owner who cannot easily be on-site.
The INA&Associates View — Genjō-kaifuku as a Settlement of Trust
We do not think of genjō-kaifuku as merely a cost settlement. We see it as the moment where the trust built with a tenant, from move-in through move-out, finally becomes visible. That is exactly why we insist on explaining the cost split transparently, keeping records that serve both sides, and being honest even about information that is inconvenient for us.
In the short term, billing a tenant more heavily might look like it puts more money in an owner’s pocket. But an unfair charge travels through word of mouth and online reviews, and it erodes rental demand over the long run. A fair settlement is what keeps vacancy risk down and sustains stable rental management — the kind of operational discipline that separates a durable, income-producing asset from one that quietly bleeds value through disputes and vacancy. If you would like to go deeper on restoration practice in Japan, our column archive is a good place to continue.
Frequently Asked Questions
Are There Cases Where Restoration Costs Cannot Be Deducted From the Security Deposit?
Anything classified as normal wear or age-related deterioration cannot be deducted from the security deposit (敷金, shikikin). The 2020 Civil Code reform made both the duty to refund the deposit and the scope of restoration considerably clearer. What can be deducted is limited to the cost of repairing damage caused by the tenant’s intent or negligence, or debts such as unpaid rent.
What Happens to Restoration Costs If the Tenant Kept a Pet?
Scratches or odor caused by a pet do not count as normal wear, so as a rule they are billed to the tenant. For a pet-friendly property, it is worth including a pet-specific restoration clause in the lease and sharing the expected scope of cost with the tenant in advance — this heads off a large share of later disputes.
What Should I Do If a Tenant Refuses to Attend the Move-Out Walkthrough?
A walkthrough is not a legal requirement, but it is strongly recommended as a dispute-prevention measure. If a tenant refuses, the effective approach is to document the unit’s condition in thorough, dated photos and video, then notify the tenant of the settlement in writing and request their confirmation. Proceeding transparently, with your reasoning clearly laid out rather than unilaterally, is what builds trust in this situation.
If a Tenant Breaks a Fixture Past Its Useful Life, Is Their Cost Share Zero?
From a pure remaining-value standpoint, the cost share approaches zero. But if the damage was caused intentionally or through negligence, the tenant may still be asked to cover part of the labor or construction cost involved in removal or replacement. A remaining value of zero does not automatically mean “no cost whatsoever” — that is a common misunderstanding worth correcting.
