In Japan, when a tenant moves out of a rental unit, the landlord does not simply repaint the walls and move on. The work is governed by a distinctly Japanese framework called genjō-kaifuku (原状回復, literally “restoration to original condition,” though the practical meaning is closer to “restoring a unit to a re-leasable condition”). There is no single equivalent term in US, UK, or Australian residential law — those markets rely on a patchwork of state or local “normal wear and tear” statutes and security-deposit rules, whereas Japan operates on a national Ministry guideline plus a Civil Code article that together define, almost like an accounting standard, which damage belongs to the tenant and which belongs to the owner. For a foreign investor buying or already holding a Japanese rental asset, understanding genjō-kaifuku is not academic: it directly determines how much of the turnover cost you absorb as the owner between tenancies, and how a security-deposit dispute is likely to be resolved if it ever reaches a Japanese court.
Genjō-kaifuku work is the repair, cleaning, and replacement work carried out after a tenant vacates so the unit can be handed to the next tenant. But it is not — and this is the first misconception every owner and every overseas investor needs to unlearn — work that returns the room to the exact condition it was in on move-in day. What matters for an owner is separating two very different categories of work: the renovation you need in order to re-lease the unit at all, and the specific portion of that cost you are legally entitled to bill back to the outgoing tenant. Blur that line when you write the estimate, and you are almost guaranteed a dispute over the returned security deposit.
Looking at a vacated unit and concluding “it’s dirty, so the tenant pays” is the single most common way Japanese landlords — and inexperienced overseas owners advised by a local agent — get this wrong, and it is the fastest route to an emotional standoff over the shikikin (敷金, the refundable security deposit collected at move-in, conceptually similar to a US or UK tenancy deposit but governed by different depreciation and disclosure rules). What an owner actually has to manage is not the construction work in isolation. It is an evidentiary chain: move-in photographs, the explanation given at signing, a joint record from the move-out inspection, an itemized quotation, and a final settlement statement — all connected so that every yen charged to the tenant can be explained in a logical sequence, not asserted after the fact. This guide walks through the scope of genjō-kaifuku work, its costs, and the decisions an owner has to make, from the perspective of day-to-day Japanese rental-property management — and, at each step, what it means for an English-speaking owner comparing it with the lease norms of their home market.
Key Takeaways
- Genjō-kaifuku separates two questions: what work is needed to re-lease the unit, and what portion of that cost can legally be billed to the outgoing tenant.
- Ordinary wear and tear (tsūjō-sonmō) and natural aging (keinen-rekka) are, in principle, the owner’s cost; damage from the tenant’s intent, negligence, or breach of the statutory duty of care is the starting point for tenant liability.
- Even when a tenant is liable, Japan’s useful-life depreciation approach reduces the tenant’s share the longer they lived there — an older finish means a smaller bill, not a bigger one.
- Never accept a lump-sum invoice. Confirm cost by location, quantity, unit price, and who is responsible for each line — that is the estimate structure that survives scrutiny.
- When the evidence chain runs unbroken from move-in photos to the final settlement statement, move-out settlements rarely turn into disputes.
What Is Genjō-Kaifuku Work? The First Line Every Owner Has to Draw
Genjō-kaifuku work is the set of repairs carried out after move-out to put the unit into a condition where the next tenant can live there with confidence. Concretely, that includes re-papering the walls (wallpaper in Japan is almost universally a vinyl cross-cloth, replaced sheet by sheet rather than painted), floor repair or replacement, fixture replacement, professional cleaning, and re-keying the locks. For an owner, this is, in part, simply the cost of turning a vacancy back into a sellable product.
Where owners — Japanese and foreign alike — go wrong is treating this work as “restoring the unit to the exact state it was in when the tenant moved in.” That framing leads directly to billing errors. The Ministry of Land, Infrastructure, Transport and Tourism (国土交通省, commonly abbreviated MLIT) publishes a guideline titled “Trouble and Guidelines Concerning Restoration to Original Condition,” which defines genjō-kaifuku as: restoring the diminution in a building’s value caused by the tenant’s residence and use, specifically the wear and damage arising from the tenant’s intent, negligence, breach of the duty of care as a good manager, or other use exceeding ordinary use. In other words, deterioration caused simply by the passage of time, or by an ordinary standard of daily living, falls outside the scope of what a tenant can be charged for.
The Premise Is Not “Return It to Move-In Condition”
Article 621 of Japan’s Civil Code (Minpō, 民法) excludes from a tenant’s restoration obligation “wear of the leased property arising from ordinary use and profit-taking, and deterioration of the leased property due to the passage of time.” This provision was written into the statute when the revised Civil Code took effect in April 2020, codifying an interpretation that Japanese case law had already been building for decades. As a result, discoloration of a wall from sunlight, or a dent in flooring left by furniture, is, as a rule, treated as something a tenant cannot be billed for.
This is where the comparison with typical US or UK residential leases is instructive. Many US states also recognize an “ordinary wear and tear” exclusion, and UK tenancy deposit schemes apply a similar “fair wear and tear” standard — the underlying legal idea is not unique to Japan. What is unique is that Japan pairs that legal principle with a nationally published, quantified depreciation table (covered in the next section) that assigns a specific useful life to specific building components. A US landlord and a departing tenant typically negotiate wear-and-tear deductions with no shared numerical reference point beyond “reasonable”; a Japanese owner and tenant can, in principle, both open the same MLIT guideline and check the same depreciation curve. That difference matters enormously for a foreign investor: it means Japanese move-out disputes are more often resolved by reference to a shared published standard than by ad hoc negotiation.
Get this distinction wrong, and you end up trying to pass on work that any responsible owner would do anyway to re-lease the unit, which is exactly what turns a settlement into a dispute. Genjō-kaifuku work is simultaneously a construction-management task and an explanation-management task around the move-out settlement. The precise distinctions among genjō-kaifuku, genjō-fukki, and genjō-kaifuku (three near-synonymous Japanese terms with subtly different legal weight) and the underlying legal framework itself are covered in more depth in companion articles. If you want to confirm the precise meaning of the terminology, see our glossary explainer on the difference between genjō-kaifuku and genjō-fukki; if you want to understand the legal relationship between the security deposit and restoration obligations in more depth, see our explainer on how the Civil Code revision changed security deposits and restoration. This article focuses specifically on the scope of the work, its cost, and the owner’s decisions.
Don’t Conflate Four Different Concepts: Ordinary Wear, Natural Aging, Tenant Fault, and Special Clauses
Most move-out disputes trace back to lumping together four concepts that are legally distinct. Tsūjō-sonmō (通常損耗, ordinary wear and tear from everyday living), keinen-rekka (経年劣化, deterioration from the simple passage of time), damage caused by the tenant’s intent or negligence, and tokuyaku (特約, a special contractual clause layered on top of the standard lease) each carry a different cost-allocation logic. Separating these four is the starting point for any sound judgment.
| Category | Example | Default cost allocation | How to judge it |
|---|---|---|---|
| Ordinary wear and tear (tsūjō-sonmō) | Minor dents from furniture placement, electronics-heat discoloration behind a TV, soiling within the range of normal use | Owner | Unavoidable with ordinary living; the thinking is that it is already priced into the rent |
| Natural aging (keinen-rekka) | Wallpaper discoloration from sunlight, fixture failure from age, natural wear on tatami mats | Owner | Progresses with the passage of time regardless of how the tenant actually lived there |
| Tenant intent, negligence, etc. | Tobacco tar staining, pet scratches or odor, mold from inadequate cleaning, graffiti, breakage | Tenant, as the starting point | Caused by the tenant’s use or neglect; includes breach of the statutory duty of care (zenkan-chūi-gimu, 善管注意義務) |
| Special clause (tokuyaku) | Professional cleaning fee, lock-replacement fee, additional charges for keeping a pet | Follows the terms of the clause | Must be written into the lease, and the tenant must have recognized and agreed to it |
What matters in this table is the order of reasoning. First ask why the wear occurred; if it falls under ordinary wear or natural aging, the owner pays; if the cause lies in the tenant’s behavior or neglect, tenant liability becomes the question to examine. The rule is not “is it dirty,” but “what caused it.” The statutory duty of care is covered in more depth, from the standpoint of preventing tenant disputes, in our What Is a Tenant's Duty of Care? Violations, Restoration Obligations, and How Property Managers Should Respond.
Unlike a typical US or Australian lease, where a landlord and tenant argue primarily over whether an item is damage versus wear, the Japanese framework asks owners to run through this four-way classification before any cost conversation starts. For an overseas investor delegating property management to a local firm, the practical implication is this: ask your management company which of the four categories they applied to each line item, not just what the total invoice comes to.
Useful-Life Depreciation: Even When the Tenant Is Liable, It Isn’t the Full Bill
Even for damage you can properly classify as tenant-liable, that does not mean you can bill the tenant the full replacement cost. The MLIT guideline applies a useful-life depreciation concept: it assigns an expected useful life to each building component and reduces the tenant’s cost share as time passes. The longer a tenant has lived in the unit, the smaller their financial liability for the same piece of damage.
| Component | Approximate useful life | How liability is calculated |
|---|---|---|
| Wallpaper (cross-cloth) | 6 years, residual value ¥1 (approx. $0.01 USD at 155 JPY/USD) | Tenant’s cost share declines with elapsed time; after 6 years it drops, in principle, to a nominal ¥1 (approx. $0.01 USD) |
| Carpet, cushion flooring | 6 years | Elapsed time is factored in the same way as wallpaper |
| Flooring (wood) | Judged against the building’s own useful life | Partial repairs sometimes do not factor in elapsed time |
| Tatami surface, fusuma paper, shōji paper | Elapsed time is not factored in | Treated as consumable-like items; if there is intent or negligence, the replacement cost is chargeable |
| Fixtures (water heater, air conditioner, etc.) | Each fixture’s own useful life | Failure from age is treated as the owner’s cost; failure from misuse is examined for tenant liability |
These figures are the guideline’s reference points; actual figures are adjusted for the specific property and lease terms. One nuance worth flagging: even after applying depreciation, it is accepted practice to re-cover an entire wall surface — not just the damaged patch — when that is how the work is normally done, since patching a single section of cross-cloth rarely matches seamlessly. For example, if one section of wallpaper has a large tear, re-papering that entire wall at the tenant’s cost, discounted for elapsed time, is not considered an unreasonable charge. Charging the tenant for re-papering an entire room uniformly, however, goes too far.
Few Western lease markets have a government table that assigns wallpaper a six-year useful life curving down to a nominal ¥1 (about one US cent) residual value. The practical implication for a portfolio owner: tenant-liability recoveries in Japan are structurally smaller, and more predictable, than US practice might suggest, since a fixture more than a few years old is worth very little in chargeable terms regardless of appearance.
It should also be noted that the guideline itself carries no legal force. Nonetheless, it is widely cited as the reference standard in Japanese court decisions on restoration disputes, and functions, in practice, as a de facto common rule. An owner who settles accounts consistent with this framework can point to a documented basis for negotiation even where the tenant disagrees. Conversely, a bill that departs sharply from the guideline carries real risk of being overturned later, whether in negotiation or in court.
When Does a Tokuyaku (Special Clause) Actually Hold Up?
Special clauses that shift professional-cleaning or lock-replacement fees to the tenant are widely used in Japanese practice. But writing something into the lease does not automatically make it enforceable. Under the reasoning of a Japanese Supreme Court decision (December 16, 2005), one of the factors determining a special clause’s validity is whether there is an objective, reasonable need for the clause and whether it avoids being one-sidedly disadvantageous to the tenant — the kind of clause that would be considered exploitative. Building on that, the guideline and case law require, for a clause to be treated as valid, that the tenant recognized it as an obligation beyond ordinary restoration duties and agreed to it. Whether the amount and scope were spelled out concretely, and whether the tenant signed with a genuine understanding of that, are the questions that get scrutinized.
In our own conversations with owners, we regularly see cases where a cost the owner assumed was “obviously chargeable because it’s written into the special clause” turns out to be difficult to enforce because the explanation at signing was inadequate. A tokuyaku only carries real practical force once its content and amount were properly explained at contract signing and that explanation was documented. If you want to review your management company’s lease-clause drafting, INA offers a free consultation where we can work through your contract terms together.
Where the Line Falls, Room by Room
Building on those four concepts, here is a room-by-room reference for what typically falls to the tenant and what typically falls to the owner. The judgment here, too, turns not on how the damage looks but on whether its cause exceeds the bounds of ordinary use.
| Location | Commonly tenant-liable | Commonly owner-liable |
|---|---|---|
| Walls, wallpaper | Tobacco-tar staining and odor, pet claw marks, graffiti, numerous nail or screw holes | Sunlight discoloration, soiling within ordinary use, small thumbtack-sized holes |
| Flooring | Deep gouges from dragging heavy objects, discoloration or rot from neglected water damage | Light dents from furniture placement, fading from age |
| Water areas (kitchen, bath) | Severe grease buildup or mold from inadequate upkeep, breakage | Fixture end-of-life, mineral scale or soiling removable by ordinary cleaning |
| Fittings (doors, sliding panels) | Holes, cracks, unauthorized modification or removal | Natural wear of the fit from normal opening and closing |
| Fixtures | Failure from tenant misuse, malfunction from inadequate cleaning | Failure or replacement from age reaching the end of its useful life |
Some items sit right on the boundary. Mold inside an air conditioner, for instance, can be argued either way — insufficient day-to-day upkeep, or a fixture-side problem. It is exactly these gray areas where evidence — the condition at move-in, the history of maintenance requests during the tenancy — becomes the deciding factor. When in doubt, the practical first move is to check whether that evidence trail actually exists.
How to Read the Cost — Understanding a Restoration Estimate
The cost of genjō-kaifuku work cannot be judged from a unit price alone. Even for identical “wallpaper replacement” work, the total will vary with the area covered, the grade of material, whether substrate repair is needed, the room’s condition, access and logistics at the site, and the timing of the work. What matters more than whether a number looks high or low against an online average is whether you, as the owner, can explain every line of the estimate in your own words.
Actual price ranges vary by region, building age, and contractor, and reaching for a naive national average is itself a way to misjudge a quote. What an owner should verify is not the absolute number, but the structure: what each line item is actually for, and whose responsibility it falls under.
| Work item | What to confirm on the estimate |
|---|---|
| Wallpaper replacement | Area covered (m²), whether it is a partial patch, single wall, or full-room replacement, and whether substrate repair is included |
| Floor repair or replacement | Whether repair suffices or full replacement is required, the material’s model number, and the scope of work |
| Professional cleaning | Priced per m² or as a flat fee, and whether air-conditioner interior cleaning or extra water-area charges are included |
| Fixture replacement | The stated reason it cannot be repaired, the age of the existing unit, and the warranty on the replacement |
| Lock replacement | Whether a special clause covers it, the security justification, and the lock type and cylinder cost |
Treat an estimate that simply reads “genjō-kaifuku work, lump sum” as a red flag. A single total figure makes it impossible to separate what portion is renovation you need anyway to re-lease the unit from what portion is legitimately billable to the tenant. At minimum, insist on an estimate broken into five elements: location, work item, quantity, unit price, and who is responsible. A granular estimate also doubles directly as the explanatory document you hand to the tenant during settlement.
What to Compare When Getting Multiple Quotes
For expensive work or work covering a large area, getting quotes from several contractors makes it easier to sanity-check the number. But the comparison should never stop at the bottom-line total. Line-item granularity, material grade, warranty coverage, timeline, and the conditions under which extra charges get added — comparing all of these together is what reveals whether a quote is genuinely cheaper or is simply omitting scope. It is not unusual for a cheap quote to have skipped substrate repair, only for it to reappear later as a change order.
The Owner’s Workflow From Move-Out to Re-Leasing
Whether the vacancy period stays short and the settlement stays dispute-free comes down to whether the owner has designed the process from the moment move-out is confirmed through to re-leasing. Every day a renovation decision is delayed, the vacancy stretches and rent-roll opportunity cost compounds. Compared with, say, a US landlord clearing a unit for the next tenant in a matter of days, a Japanese genjō-kaifuku process is deliberately slower and more document-heavy — which is precisely the trade-off that keeps disputes rare. Here is the owner’s practical workflow from before move-in through final settlement, alongside the records that should be kept at each stage.
| Stage | Owner / management-company task | Records to retain |
|---|---|---|
| Before move-in | Photograph the unit’s condition before the new tenant moves in and list any pre-existing scuffs or soiling | Pre-move-in photographs, a property-condition checklist |
| At lease signing | Explain the restoration cost-allocation rules and the content and amount of any special clauses, and obtain the tenant’s agreement | The lease agreement, a record of the special-clause explanation, the pre-signing disclosure statement (jūyō jikō setsumei-sho, 重要事項説明書) |
| During the tenancy | Log every report of a leak or fixture malfunction and the response taken, as it happens | Contact history, records of repair responses |
| Move-out inspection (taikyo-tachiai) | Confirm damaged areas together with the tenant present, and keep photographs and the tenant’s own acknowledgment | Move-out inspection record, interior photographs |
| Obtaining quotes | Get an estimate broken out by work item and cost responsibility | The quotation, contractor comments |
| Settlement statement | Prepare and explain a statement that clearly shows the deposit, unpaid amounts, and the tenant’s liable amount | The settlement statement, a record of the explanation given |
| Renovation and re-leasing | Schedule the work to be ready by the intended re-listing date and refresh the leasing photographs | A work schedule, purchase orders, leasing floor plans |
The starting point of this chain is not move-out — it is before move-in. Without pre-move-in photographs, there is no way to prove whether a scratch discovered at move-out already existed before the tenant arrived or arose during the tenancy. One owner we worked with had never taken move-in photographs, and as a result could not prove who was responsible for a scratch on the flooring, and ultimately gave up trying to bill the tenant for it. Evidence is not something you gather after move-out; it is something you build up starting before the lease is even signed.
The move-out inspection, the taikyo-tachiai (退去立会い, a joint walkthrough where the landlord or manager and the departing tenant inspect the unit together before move-out is finalized), is the centerpiece of building that evidence. The trick here is to confirm damaged areas together with the tenant, photograph them on the spot, and keep a record that the tenant acknowledged them. Skip the joint inspection and bill the tenant unilaterally afterward, and the tenant is far more likely to dispute that the damage even exists in the first place. If the damage is confirmed together at the inspection, the settlement conversation can start from agreed facts rather than from an argument, which is what keeps things from turning emotional. Wherever time allows, we recommend always holding a joint move-out inspection with the tenant present — a step that has no exact equivalent in a typical US or UK move-out process, where the deposit deduction is often communicated by letter after the tenant has already left.
Connecting the Chain From Move-In Photos to the Final Settlement
In practice, what determines how persuasive a settlement is comes down to whether the pre-move-in photographs, the explanation given at signing, the move-out inspection record, the quotation, and the settlement statement all connect along a single, unbroken line. If an owner can show: this was the condition at move-in, this is what we agreed to at signing, this damage arose by move-out, and this is what it costs to repair — the tenant is far more likely to accept the charge. Conversely, if even one link in that chain is missing, that particular item becomes very hard to argue as tenant-liable.
Building a Settlement Statement That Doesn’t Spark Disputes
Whether a move-out settlement turns into a dispute is determined less by the dollar amount itself than by how it is presented. Showing, in order, how much is being deducted from the deposit and why the number comes out the way it does, is what matters. Treat the settlement statement not as a bare list of figures, but as a document constructed specifically to explain the charges to the tenant.
| Line item | What it shows |
|---|---|
| Deposit held (shikikin) | The total security deposit collected at signing |
| Unpaid rent and charges | Any outstanding rent or common-area fees remaining as of move-out |
| Tenant-liable restoration cost | Cost by location, with the tenant’s share after applying useful-life depreciation |
| Special-clause charges | Professional-cleaning fees, lock-replacement fees, and other costs already agreed to |
| Net deduction / refund | The amount refunded after deducting liabilities from the deposit, or any additional amount owed |
A clear explanatory order runs: confirm the total deposit collected, then walk through each tenant-liable item and its basis one by one, and finally present the net refund after deductions. Attaching the reason each item is tenant-liable — the damage confirmed at the inspection, the relevant special clause — to each line makes an emotional standoff far less likely. For any item where the evidence is thin and you cannot point to a clear basis, treating it as an owner cost rather than forcing a tenant charge is, in some situations, the choice that better protects the long-term tenant relationship — and, for a foreign owner managing remotely, the choice that avoids an expensive cross-border dispute over a comparatively small sum.
The Owner’s Judgment Call: How Far Should the Renovation Go?
Deciding cost allocation is not the end of the genjō-kaifuku process. An owner still faces an investment decision: how far to renovate ahead of the next leasing round. Bringing everything as close to “like new” as possible will look better, but in rental-property economics, cost-effectiveness cannot be ignored either. Building age, achievable rent, the target tenant profile, and competing units nearby all factor into deciding the scope of the work.
When the decision is unclear, ordering the priorities in the following sequence makes it easier to reason through:
- Fix anything affecting safety — fixtures or damage that pose a real hazard
- Confirm the water areas and climate-control equipment that directly affect a tenant’s daily life
- Tidy the walls, floors, and lighting that shape a prospective tenant’s first impression during a viewing
- Add investment only for improvements that translate into a higher achievable rent
- Don’t force items that could wait for the next renovation cycle into this one
The other decision an owner faces is whether to process a cost as tenant-liable or owner-liable. If the evidence is in place and, even after applying useful-life depreciation, a tenant charge is still reasonable, pursuing it is worth considering. On the other hand, where records are thin, or where the collection effort and the risk of damaging the relationship outweigh the amount at stake, treating it as an owner cost and prioritizing getting the next tenant in sooner is also a legitimate call. Genjō-kaifuku work is not merely post-move-out cleanup — it is a business decision about how you shape the terms of your next leasing round. For owners weighing vacancy strategy or renovation priorities, INA’s rental-management team can work through your specific situation with you.
Frequently Asked Questions
Q1. Can all genjō-kaifuku costs be billed to the tenant?
A. No. Ordinary wear and tear and natural aging are, in principle, the owner’s cost. What can be billed to the tenant is limited to damage from intent, negligence, use exceeding ordinary use, breach of the duty of care, or a valid special clause — and even then, the amount reflects useful-life depreciation rather than the full replacement cost.
Q2. Is it fine to start the renovation right after move-out?
A. If there is damage that will factor into the settlement, keep photographs, the move-out inspection record, and the quotation first, before proceeding. Start work without preserving that evidence, and you will no longer be able to demonstrate the basis for any tenant charge afterward. Keep the renovation you need regardless separate, in your own thinking, from the renovation tied to the settlement.
Q3. How many contractors should I get quotes from?
A. For expensive work or work covering a large area, getting multiple quotes makes it easier to confirm you are being charged fairly. But price is not the only axis of comparison — line up the granularity of the work items, material grade, warranty, timeline, and the conditions for extra charges before comparing.
Q4. How can I shorten the vacancy period around genjō-kaifuku work?
A. As soon as you know a tenant is moving out, line up the sequence: inspection, quotation, securing a contractor slot, and updated leasing photographs. If you only start thinking about each step after move-out actually happens, you introduce waiting time at every decision point, and the vacancy stretches out. Starting preparation while the current tenant is still in place is the more effective approach.
Related Reading
- How Did the Civil Code Revision Change Security Deposits and Restoration? A Landlord’s Practical Response
- What Is Genjō-Kaifuku? A Practical Terminology Guide to Avoid Misuse in Rental Management
- What Is a Tenant's Duty of Care? Violations, Restoration Obligations, and How Property Managers Should Respond
Sources and Citations
- e-Gov Japanese Law Search — Civil Code (Minpō, 民法), Articles 621 and 622-2
- Ministry of Land, Infrastructure, Transport and Tourism (国土交通省, MLIT) — “Trouble and Guidelines Concerning Restoration to Original Condition” (revised edition)
- Ministry of Justice (法務省) — “The Civil Code Rules on Lease Agreements Are Changing”
