In Japan-specific residential leasing, shikikin (敷金) is money a tenant deposits with the landlord under a lease agreement. It is applied to unpaid rent or damage caused intentionally or negligently by the tenant.
However, shikikin is not “money the landlord can freely deduct at move-out.” If the lease is vague about deposit returns, genjo kaifuku (原状回復, restoration to the contractually required condition), cleaning clauses, and shikikin shokyaku (敷金償却, a non-refundable deposit deduction), tenants, landlords, and property managers can easily leave with different expectations.
This article explains not only what tenants should check to avoid losing money, but also the practical steps owners and property managers should take in contracts, photo records, and settlement explanations to prevent move-out disputes. Compared with many English-speaking markets, Japan’s system separates refundable deposits, non-refundable key money, statutory restoration concepts, and local customs more explicitly, so investors should read each cost item as a separate risk allocation.
A Security Deposit Is Money Held in Trust and Settled at Move-Out
A security deposit, or shikikin, is money paid to the landlord to secure obligations the tenant owes under the lease. Typical uses include unpaid rent, unpaid common-area charges, and restoration costs that are properly chargeable to the tenant.
The key point is that shikikin is different in nature from reikin (礼金, key money). Reikin is often treated as a non-refundable payment to the landlord, while shikikin is generally refundable after settlement if any balance remains. Key money is unfamiliar in many markets where upfront payments are usually limited to a deposit and advance rent, but in Japan it can appear as a separate non-refundable leasing cost.
| Item | Nature | Treatment at Move-Out | Practical Notes |
|---|---|---|---|
| Security deposit / shikikin | Money held to secure tenant obligations | Unpaid amounts and tenant-borne costs are deducted, and the remaining balance is returned | The basis and amount of each deduction must be explained |
| Key money / reikin | One-time payment to the landlord | Generally not returned | Availability varies by region and property |
| Guarantee deposit | Sometimes used similarly to a security deposit | Settled according to the lease terms | Clause review is especially important for commercial leases and local customs |
| Deposit amortization / shikikin shokyaku and shikibiki | Special clause stating that a certain amount will not be returned | May be deducted according to the lease | Watch the amount, explanation, and potential issues under the Consumer Contract Act |
For tenants, the main question is “how much will come back?” For landlords and property managers, the important question is whether they can explain why a particular amount may be deducted.
Under the Civil Code, Deposit Return Generally Comes After Surrender and Settlement
Under Japan’s Civil Code, a security deposit is treated as money delivered to the landlord to secure monetary obligations the tenant owes under the lease. When the lease ends and the tenant returns the property, the landlord must return the balance after deducting unpaid obligations from the deposit.
In other words, a deposit return is not a full refund made the moment the tenant gives notice. It is settled after surrender of the premises, confirmation of unpaid amounts, and review of restoration costs.
At the same time, landlords cannot deduct anything they want. There must be a reason for the deduction, such as rent arrears, the tenant’s intentional or negligent act, breach of the duty of care of a prudent manager, or wear and damage beyond ordinary use.
Even if the lease contains a special clause, the issue is whether the clause is clear and whether the tenant was able to understand the burden beyond ordinary restoration obligations. In practice, “it is written in the contract” is not enough by itself; keeping records of the explanation and the settlement basis helps prevent disputes.
Restoration Does Not Mean Returning the Unit to Brand-New Condition
The most common source of move-out disputes is misunderstanding what restoration means.
Japan’s Ministry of Land, Infrastructure, Transport and Tourism guideline, “Troubles and Guidelines Concerning Restoration to Original Condition,” explains that restoration does not mean completely returning the property to the condition it was in when the tenant first rented it. Rather, it means repairing wear or damage caused by the tenant’s intentional or negligent acts, breach of duty of care, or use beyond ordinary use.
Therefore, age-related deterioration and ordinary wear from normal daily living are generally considered the landlord’s responsibility. The underlying idea is that deterioration from ordinary use is already reflected in the rent the tenant has paid.
For example, wallpaper discoloration from sunlight, minor floor dents from furniture placement, and equipment deterioration from normal use can be difficult to charge fully to the tenant.
By contrast, mold that spread because condensation was ignored, tobacco stains and odor, pet scratches, stains from spilled drinks or food left untreated, and damage from unauthorized alterations may be chargeable to the tenant.
Cost Allocation Is Judged by Cause, Elapsed Years, and Work Scope
Restoration cost allocation is not determined simply by whether there is a scratch or stain. In practice, at least the following three points should be separated.
The first is cause. Was it ordinary use, or was it caused by the tenant’s intention, negligence, or inadequate maintenance?
The second is elapsed years. Wallpaper, fixtures, and equipment lose value over time. Even where damage is chargeable to the tenant, the landlord cannot always claim the full cost of brand-new replacement.
The third is work scope. If the damage is limited to one area, repair should generally be limited to the damaged area as much as possible. If the landlord claims full replacement of wallpaper or an entire fixture set, documents explaining the necessity are needed.
| Example | General View | Explanation Point at Settlement |
|---|---|---|
| Wallpaper discoloration from sunlight | Ordinary wear and age-related deterioration | Difficult to charge to the tenant |
| Electrical burn marks behind a refrigerator | Often treated as within ordinary use | Check whether there is unusual staining or damage |
| Oil stains from lack of cleaning | May be chargeable to the tenant | Distinguish whether cleaning is enough or replacement is necessary |
| Mold from ignored condensation | May indicate inadequate tenant maintenance | Confirm ventilation explanations, affected area, and period of neglect |
| Tobacco stains and odor | May be chargeable to the tenant | Record no-smoking clauses, odor, and discoloration area |
| Minor dents from furniture placement | Often treated as ordinary use | Check for heavy objects or unusual use |
| Stains from food or drink left untreated | May be chargeable to the tenant | Show the cause and why cleaning is not possible |
| Brand-new replacement of equipment to attract the next tenant | Landlord responsibility | Upgrade costs are difficult to pass on to the tenant |
This framework helps both tenants and landlords. Tenants can identify excessive claims more easily, while landlords and property managers can separate chargeable and non-chargeable items in advance.
Deposit Amortization and Shikibiki Must Be Checked Separately from Ordinary Deposit Return
Deposit amortization, or shikikin shokyaku (敷金償却), is a contractual arrangement under which part or all of the deposit is not returned at move-out. Depending on the region and lease type, similar arrangements may be called shikibiki (敷引き, fixed deduction from the deposit) or guarantee deposit amortization.
If a lease includes deposit amortization, a tenant who assumes “it is a deposit, so it will naturally come back” may misunderstand the economics. For example, if the lease says two months of deposit with one month amortized, one month may be designed as non-refundable even if there are no unpaid obligations or separate tenant-borne costs.
However, a special clause is not always valid simply because it exists. If the amount is too high, the explanation was insufficient, or the clause imposes an excessive burden on the tenant, it may become disputed.
If a property manager uses deposit amortization, it should be stated prominently in the lease and explained specifically in the important matters explanation and contract explanation as an amount that will not be returned. Tenants should check terms such as “amortization,” “shikibiki,” “cancellation deduction,” and “move-out deduction” before signing.
For more detail on these terms, see The Differences Between Security Deposit, Amortization Fee, Shikibiki, and Guarantee Deposit: Move-Out Settlement Practice.
Zero-Zero Properties Should Be Compared Including Move-Out Costs
A zero-zero property is a rental with no security deposit and no key money. It can reduce upfront costs, which is useful for tenants who also face moving expenses and purchases of furniture and appliances.
However, no deposit does not mean there will be no move-out costs. The lease may specify house-cleaning fees, air-conditioner cleaning fees, early termination penalties, key replacement costs, and other charges.
When comparing zero-zero properties, tenants and investors should look not only at monthly rent but also at total cost, including upfront fees, renewal fees, fixed move-out fees, and early termination penalties. This differs from markets where the quoted rent and a refundable deposit may capture most of the tenant’s economic exposure.
For landlords and property managers, zero-zero properties are also an area where insufficient explanation can easily cause disputes. It is important to state clearly before move-in: “No security deposit is required, but the cleaning fee stated in the lease will be charged at move-out.”
For a broader comparison of upfront costs, see What Are Security Deposit and Key Money in Japanese Rentals? Tips to Reduce Initial Costs and Cautions for Zero-Zero Properties.
Owners and Property Managers Should Specify Deduction Conditions in the Lease
Many deposit disputes appear to arise suddenly at move-out, but in reality they often begin with insufficient explanation at contract signing.
The lease should specify at least the following points.
Deposit amount, timing of return, treatment of bank transfer fees, application to unpaid obligations, relationship with restoration costs, whether there is a house-cleaning special clause, air-conditioner cleaning costs, whether there is deposit amortization or shikibiki, and the relationship with early termination penalties.
In particular, if room-cleaning costs are to be borne by the tenant, the amount or calculation method should be clear. Simply saying “actual cost” can feel unexpectedly expensive at move-out. It is preferable to state the per-square-meter rate, fixed amount, quotation method, and possible additional costs for unusually severe staining in a way the tenant can understand.
A special clause is not sufficiently protected merely because it appears in small print. Important matters explanations, contract explanations, and confirmation fields on electronic contract screens should be operated so the explanation history can be checked later. That improves the landlord’s position if a dispute arises.
Photo Records Should Be Kept at Three Stages: Before Move-In, During Tenancy, and at Move-Out
In deposit return and restoration disputes, the ultimate issue is often when a scratch or stain occurred. Photo records are especially useful here.
Before move-in, photograph floors, walls, ceilings, doors and fittings, equipment, bathroom, kitchen, toilet, balcony, entrance, and inside storage spaces. For existing scratches and stains, it is practical to keep both close-up photos and wider photos showing the location within the room.
If water leaks, equipment defects, condensation, mold, or similar issues occur during the tenancy, the tenant should keep photos and records of the date and time of notice to the property manager. Whether the tenant left the issue unattended or reported it promptly can affect cost allocation.
At move-out, record the items pointed out during inspection, the property manager’s explanation, the rough estimate, and the tenant’s objections. Owners and property managers should not only photograph after move-out, but also keep records in a form that allows comparison with move-in photos.
For a more concrete move-in checklist, see A Rental Owner’s Guide: Pre-Move-In Checklist and Cost Allocation Guidelines to Prevent Restoration Disputes.
Settlement Explanations Should Show the Basis, Not Only the Deduction Amount
A move-out settlement statement should avoid showing only amounts.
Even if it says “wallpaper replacement: JPY 60,000, roughly USD 400” or “cleaning: JPY 55,000, roughly USD 365,” the tenant may not understand why they are responsible for those amounts. That leads to the complaint that “my deposit was not returned.”
A property manager can make the explanation clearer by attaching the following information to the settlement statement.
Location, damage description, cause assessment, reason for tenant responsibility, consideration of elapsed years, work scope, quotation, photos, and lease clause. If the tenant bears only part rather than all of the cost, the reasoning for the percentage should also be stated.
When tenants receive a settlement statement, they should first compare it with the lease, move-in photos, move-out photos, and quotations. If there is an item they do not accept, the discussion is more productive if they ask specifically: “Is this ordinary wear?” “Is the work scope too broad?” or “Have elapsed years been considered?” rather than simply saying “this is too expensive” or “this is wrong.”
If a Deposit Return Dispute Arises, Organize It in Writing Rather Than Emotionally
In deposit return disputes, continuing by phone alone often results in conflicting memories of what was said. First, collect the settlement statement, quotation, photos, lease, and important matters explanation, then organize the disputed points in writing.
The main items a tenant should check are whether there are unpaid obligations, the cause of damage charged to the tenant, distinction from ordinary wear, validity of special clauses, consideration of elapsed years, and reasonableness of the work scope.
For landlords and property managers, forcing through items for which no claim basis can be explained can become disadvantageous if the matter goes to a consultation body or small claims procedure. Conversely, if the explanation is supported by the lease, photos, and guidelines, it is easier to obtain the tenant’s understanding.
If discussion does not resolve the issue, tenants can consider a consumer affairs center, municipal housing consultation, lawyer consultation, or small claims litigation. Landlords should also focus on evidence and contract-based explanations, not emotional demands.
Frequently Asked Questions
Is a security deposit always returned?
If there is no unpaid rent or tenant-borne restoration cost, it is generally subject to return. However, if the lease includes deposit amortization, shikibiki, or cleaning special clauses, deductions may be made according to those terms. First check the deposit clause and move-out cost clauses in the lease.
How much of the restoration cost is the tenant responsible for?
Wear and damage caused by the tenant’s intentional or negligent acts, breach of the duty of care of a prudent manager, or use beyond ordinary use may be the tenant’s responsibility. By contrast, age-related deterioration and ordinary wear are generally considered the landlord’s responsibility. It is important to evaluate cause, elapsed years, and work scope separately.
Are deposit amortization and house-cleaning costs the same?
No. Deposit amortization is the treatment of a contractually specified amount as non-refundable. House-cleaning costs are a special clause on who bears post-move-out cleaning costs. If both are included in the lease, the tenant should confirm the amount and basis to ensure the combined burden is not unfairly duplicative.
What should property managers watch for in move-out settlement?
They should clearly explain cost allocation at contract signing, keep move-in photos, and at move-out connect photos, quotations, and lease clauses in the settlement explanation. In particular, it is important not to confuse ordinary wear with tenant responsibility, to consider elapsed years, and to be able to explain why full replacement is necessary.
Related Links
- What Are Security Deposit and Key Money in Japanese Rentals? Tips to Reduce Initial Costs and Cautions for Zero-Zero Properties
- The Differences Between Security Deposit, Amortization Fee, Shikibiki, and Guarantee Deposit: Move-Out Settlement Practice
- A Rental Owner’s Guide: Pre-Move-In Checklist and Cost Allocation Guidelines to Prevent Restoration Disputes
References
