When tenants move out of a rented apartment in Japan, the question on almost everyone's mind is how much of the security deposit will actually come back. Unlike reikin (礼金, the non-refundable “key money” paid to the landlord at move-in) or the agent's brokerage fee, the shikikin (敷金, Japan's residential security deposit) is money the tenant entrusted to the landlord, so in principle all or part of it is returned. In practice, though, the final refund depends heavily on the scope of genjō-kaifuku (原状回復, the legal duty to restore the unit to its original condition) and on how the room was actually used during the tenancy.
In our work managing rental properties day to day, we have seen a great many disputes arise over move-out settlements. Most of them are not caused by bad faith. They start because the lease began without a shared understanding of where the landlord's responsibility ends and the tenant's begins. That is exactly why having both tenants and landlords understand the same standard is the single most reliable way to prevent trouble later.
This is a distinctively Japanese system: unlike a typical US or UK security deposit, which is governed mainly by state or local statute and a fairly simple “damage beyond normal wear” test, Japan's shikikin regime is shaped by a specific 2020 Civil Code reform, a detailed national government guideline on cost-sharing by equipment age, and regional customs such as key money and deposit forfeiture that have no real Western equivalent. This article walks through the legal status of the shikikin, where the line falls on restoration obligations, how the move-out walkthrough works in practice, and what to do about a settlement bill you don't agree with — so that an overseas investor or tenant can navigate the process with the same confidence as a longtime Japanese resident.
What a shikikin is, and how it differs from key money and other deposits
The legal status of the shikikin
The shikikin (敷金) is money a tenant deposits with the landlord to secure obligations arising from the lease, such as unpaid rent or restoration costs the tenant is responsible for. Article 622-2, newly added to the Civil Code (民法) by the reform that took effect on April 1, 2020, defines it as “money delivered, regardless of name, for the purpose of securing any obligation the tenant owes under the lease, including rent.” The article makes explicit what had long been assumed in practice: once the lease ends and the landlord takes back possession of the unit (or once the tenant lawfully transfers the leasehold to someone else), the landlord must return the balance after deducting only the tenant's actual outstanding obligations.
In other words, the shikikin is not the landlord's income — it is held on the tenant's behalf. If there is no legitimate basis for a deduction, the default outcome is a full refund, and the burden falls on the landlord to explain why any amount was withheld. For an overseas investor used to a US-style deposit that a landlord can sometimes withhold with comparatively little documentation, this statutory presumption in favor of the tenant is worth noting as a compliance point when operating rental property in Japan.
How it differs from key money, guarantee deposits, and shikibiki
| Term | Nature | Refundable? |
|---|---|---|
| Shikikin (敷金, security deposit) | Deposit held to secure the tenant's obligations | Refunded after settlement, in principle |
| Reikin (礼金, key money) | A customary “thank-you” payment to the landlord at signing | Not refunded |
| Hoshōkin (保証金, guarantee deposit) | A shikikin-equivalent deposit used mainly in the Kansai and Kyushu regions | Refunded, minus any shikibiki deduction |
| Shikibiki (敷引き, deposit forfeiture) | A pre-agreed fixed amount deducted from the hoshōkin | Not refunded |
| Brokerage fee | Compensation paid to the real estate agent | Not refunded |
Typical market levels and the fine print on “zero deposit” listings
For residential rentals, the shikikin typically runs one to two months' rent. Studio units aimed at single tenants often ask for one month or less, while family-oriented units and pet-friendly properties tend toward around two months. In the Kansai region (Osaka, Kyoto) and Kyushu, landlords still commonly use the term hoshōkin (保証金) instead of shikikin, collect several months' rent up front, and retain a set portion as shikibiki (敷引き) when the tenant moves out — a regional custom with no direct parallel in most Western leasing markets, where deposits are usually a flat one to two months regardless of region. On the enforceability of shikibiki clauses, a Supreme Court decision of March 24, 2011 held that such a clause can be voided under Article 10 of the Consumer Contract Act if the forfeited amount is judged excessive relative to the rent, the likely cost of repairing ordinary wear and tear, and whether other lump-sum payments (such as reikin) already exist — but that a shikibiki clause is not automatically invalid merely because it reflects local custom. In short, “it's just how things are done here” is not, by itself, a defense for an unreasonably large forfeiture.
It is also worth flagging that on listings advertised as “zero deposit” (shikikin zero), the absence of a deposit does not mean the absence of a restoration obligation. In fact, because there is no deposit held as security, tenants on these listings are more likely to be billed the actual repair cost directly at move-out, since the landlord has no pre-collected fund to draw from. Before signing a zero-deposit lease, it is worth confirming exactly how move-out costs will be handled — a due-diligence step that is easy for an overseas tenant or investor to overlook if “deposit” is read as a proxy for “restoration risk.”
How far does a tenant's restoration obligation actually extend?
The line the Civil Code reform made explicit
Article 621, newly added to the Civil Code (民法) by the same reform that took effect on April 1, 2020, states plainly that wear and deterioration arising from ordinary use, and changes due to the simple passage of time, are not included in the tenant's restoration obligation. A proviso in the same article adds that a tenant is not liable even for damage attributable to causes beyond the tenant's control. This codified, as binding statutory law, an approach the Ministry of Land, Infrastructure, Transport and Tourism (国土交通省, MLIT) had already been advocating through its long-standing “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), most recently revised and published in August 2011.
Genjō-kaifuku (原状回復) does not mean returning the room to the exact state it was in on move-in day. It means repairing damage caused by the tenant's intentional acts, negligence, or use of the unit beyond what is considered normal. For a tenant or investor coming from a market where “normal wear and tear” is a vaguer, more litigated standard, understanding this precise distinction — ordinary deterioration is the landlord's cost, abnormal damage is the tenant's — changes how a settlement bill should be read from the outset.
Concrete examples of cost allocation and how equipment age is factored in
| Condition | Who bears the cost | Rationale |
|---|---|---|
| Dents in flooring from furniture placement | Landlord | Wear from ordinary daily living |
| Discoloration of wallpaper or flooring from sunlight | Landlord | Deterioration from the simple passage of time |
| Thumbtack or pin holes (not reaching the wall's base material) | Landlord | Treated as within the range of normal use |
| Tar stains and odor from smoking | Tenant | Fouling that exceeds normal use |
| Mold or rot from neglected condensation | Tenant | Damage that expanded due to a failure to maintain the unit |
| Scratches on pillars or fittings from pets | Tenant | Damage that exceeds normal use |
| Nail or screw holes reaching the base material | Tenant | Alteration that exceeds normal use |
Even when a cost is judged to be the tenant's responsibility, the tenant does not necessarily pay the full price of a brand-new replacement. The MLIT guideline sets out an approach that reduces the tenant's share according to how long the fixture has already been in service. For example, wallpaper is treated as having a six-year useful life, with its residual value assumed to decline along a straight line down to a nominal ¥1 (roughly $0.01 at 155 JPY/USD — effectively treated as zero) at the six-year mark. As a result, the longer a tenant has lived in the unit, the smaller their cost share becomes, and by the six-year mark the tenant's share of a wallpaper replacement is, in principle, negligible. This depreciation logic does not apply to everything, however: consumable items such as fusuma paper or shoji screen paper, as well as general house cleaning fees, are treated as not subject to this age-based reduction — so not every line item on a settlement bill shrinks over time.
Even where the tenant only damaged part of a wall, contractors will sometimes need to redo an entire wall panel for practical reasons, such as matching color and pattern. The MLIT guideline treats the tenant's cost-sharing unit for wallpaper as, in principle, the square meter, while also allowing the landlord to charge for a full wall panel including the damaged section when matching color or pattern makes that the only workable construction approach. If a settlement bill simply states “wallpaper replacement, entire unit,” it is worth asking the landlord to justify that scope.
Contract clauses that expand a tenant's liability, and how enforceable they really are
It is common in Japan for a lease to include a clause stating that “house cleaning costs at move-out are the tenant's responsibility.” A Supreme Court decision of December 16, 2005 held, in essence, that before a tenant can be made to bear the cost of repairing ordinary wear and tear, the scope of that repair obligation must either be spelled out concretely in the lease itself, or at minimum have been clearly explained orally and knowingly agreed to by the tenant. Compared with a typical US or European lease, where a broad “tenant restores the unit to move-in condition” clause is common and rarely challenged in court on this specific point, Japanese case law places a notably higher bar on the landlord to prove the tenant actually understood and agreed to any clause that shifts ordinary wear-and-tear costs onto them.
Conversely, a vague clause that never specifies an amount or scope, or one that unilaterally imposes an unreasonably heavy burden on the tenant, can potentially be challenged as unenforceable under the Consumer Contract Act. That said, the outcome always depends on the specific contract language and the circumstances surrounding it, so tenants and landlords alike should avoid confident self-diagnosis and instead consult a qualified professional.
On top of this, in Tokyo, the Ordinance on the Prevention of Disputes Concerning the Leasing of Residential Housing (賃貸住宅紛争防止条例, formally the “Tokyo Ordinance on the Prevention of Disputes Concerning the Leasing of Residential Housing in Tokyo,” in effect since October 2004) requires that whenever a licensed real estate broker arranges or represents a new residential lease within Tokyo, the broker must provide the tenant with a written explanation of the statutory principles and case-law approach to move-out restoration and in-tenancy repairs (renewal contracts and commercial leases are excluded from this requirement). Osaka Prefecture and other municipalities have published their own comparable guidance. This is a distinctly Japanese consumer-protection layer with no exact counterpart in most Western jurisdictions, and the written disclosure a tenant receives before signing becomes, in practice, the single most important piece of evidence at move-out.
What to check during the move-out walkthrough
What to prepare before the walkthrough
- Photos of the interior taken at move-in, together with the move-in condition checklist
- The lease agreement, the pre-contract disclosure statement (重要事項説明書), and a copy of any special-terms clauses
- Emails or other records of any equipment problems reported to the property manager during the tenancy
Without move-in records, there is no way to distinguish pre-existing damage from new damage — a gap that works against the tenant in almost every disputed case we have seen. Saving photos in a form that preserves the date they were taken means they remain persuasive evidence even years later, which matters especially for tenants who may relocate internationally and lose easy access to the property in the interim.
Three things to focus on at the walkthrough itself
- Confirm each flagged item in person. Don't just listen to the property manager's explanation — look at the actual condition yourself, and take photos wherever needed.
- Ask for the cost breakdown and the basis for each unit price. Confirm the quantity, the unit price, and whether the age-based depreciation described above has actually been applied.
- Do not finalize the amount on the spot. Insist on receiving the estimate in writing afterward, review it, and respond only once you have had time to consider it — a stance that protects tenants who may not be fluent in the language of a Japanese-language settlement document handed over verbally.
Walkthrough paperwork often mixes a section confirming observed facts with a section indicating agreement to pay specific costs. As a practical self-protection measure, for any item you do not agree with, write a note to that effect in the margin before signing. Refusing to sign outright tends to make later negotiation harder; noting your reservation in writing while still signing keeps the conversation open.
How the shikikin settlement process works, and how long the refund takes
| Stage | What happens | Typical timing |
|---|---|---|
| Notice of termination | Tenant notifies the landlord per the notice period set in the lease | Commonly one month before move-out (some leases require two to three months) |
| Move-out walkthrough | Interior inspection and discussion of cost allocation | Around the handover date |
| Estimate and settlement statement prepared | Cost calculated based on the contractor's estimate | Roughly two to four weeks after the walkthrough |
| Settlement statement sent and explained | Deducted items and refund amount presented | Promptly after the calculation is finalized |
| Shikikin refunded | Transferred to the tenant's designated account | By the date set in the lease (commonly around one month) |
No single statute fixes a uniform refund deadline. However, under Civil Code Article 622-2, the landlord's duty to refund arises once the lease ends and the tenant returns possession of the unit, so if payment is delayed for an extended period without a legitimate reason, the tenant can demand payment in writing. It is worth checking, at the time of signing, whether the lease specifies a concrete refund deadline.
What to do if you receive a settlement bill you don't agree with
An emotional back-and-forth only makes resolution harder. The first step is to request, in writing, the quantity and unit price for each billed item, the reasoning for treating it as the tenant's responsibility, and whether age-based depreciation was applied. In many cases, this alone prompts the landlord to organize the calculation basis properly, and the amount is sometimes revised as a result.
Where to seek advice, and the small-claims option
- The nearest Consumer Affairs Center (消費生活センター), reachable via the Consumer Hotline (消費者ホットライン, tel. 188)
- Consultation desks run by industry associations for residential property management
- Free legal consultations offered by regional bar associations
- Alternative dispute resolution (裁判外紛争解決手続, ADR) or civil conciliation at a Summary Court (簡易裁判所)
For any claim seeking payment of ¥600,000 or less (approx. USD 3,900 at 155 JPY/USD), a tenant can use shōgaku soshō (少額訴訟, small-claims litigation) at a Summary Court, where the case is, in principle, heard and decided in a single session. This procedure is capped at ten uses per person per year at the same Summary Court, and if either party disputes the judgment, the only avenue is an objection filed with that same Summary Court — there is no appeal to a District Court (地方裁判所). If the issues turn out to be complex, the case can be shifted into ordinary litigation instead. A tenant can file without a lawyer, but this only works if the evidence is in order. The essential step is organizing move-in photos, the lease, the settlement statement, and correspondence in chronological order — a discipline that matters even more for an overseas tenant who may need to make this case without being physically present in Japan.
How we think about shikikin settlements
A shikikin settlement marks the end of the relationship between landlord and tenant. But we believe this final moment is precisely where a management company's character shows most clearly. A settlement that presents only a final number, with no explanation of the basis for any deduction, quietly erodes trust in rental-property management as an industry — even when it never escalates into an open dispute.
At INA&Associates K.K., we place importance on documenting the condition of a unit at move-in and on explaining our approach to cost allocation at the time of signing. The reasoning is straightforward: disclosing information up front, including anything that might look unfavorable, ultimately reduces the burden on both sides. Over the long run, properties with a track record of transparent settlements are the ones that continue to be chosen by both tenants and landlords alike — a reputational asset that compounds over years of ownership.
And the people who deliver that explanation are not a system, but our jinzai (人財, literally “human treasure” — INA's term for its people, deliberately using the character for “treasure” in place of the more common character for “material”) on the ground. Whether an organization shares a consistent standard of judgment, and has a culture in which staff can ask when they are unsure, is what ultimately determines the quality of a settlement. For more practical guides like this one, see our column archive.
Summary
The shikikin is money held on deposit, and the default outcome is a full refund unless there is a legitimate basis for a deduction. The restoration obligation is not about returning a unit to its move-in condition — it is limited to repairing damage caused by intent or negligence. The MLIT guideline also makes clear that a tenant's cost share should decrease as equipment ages.
Keep move-in records, check the special-terms clauses in the lease, and insist on a written basis for any charges at the walkthrough. Covering these three points goes a long way toward easing the anxiety that comes with moving out. The same logic applies from the landlord's side: being prepared to produce a settlement you can fully explain is what prevents unnecessary disputes in the first place.
Frequently asked questions
Is the shikikin always refunded in full?
If there is no unpaid rent and no damage judged to be the tenant's responsibility, a full refund is the default outcome. That said, if the lease includes a clause clearly agreed to at signing that assigns house-cleaning costs to the tenant, that amount may be deducted. It is worth checking the relevant clause in your own lease.
What if I never took photos at move-in?
The absence of records is not a reason to give up. Civil Code Article 621 and the MLIT guideline establish, as a starting principle, that the cost of restoring ordinary wear and tear or age-related deterioration falls on the landlord — so a tenant can still ask, item by item, for the landlord's basis for any charge under that framework. It is also worth confirming whether the cost share reflects the age-based depreciation described above.
Several months have passed since I moved out and my shikikin still hasn't been returned.
Start by checking whether the lease specifies a refund deadline, then request, in writing or by email, that the settlement statement be issued and the deposit returned. Making the request through a method that leaves a record is important. If there is still no progress, the next step is to consult a Consumer Affairs Center or consider small-claims litigation.
As a landlord, where should I start in order to reduce settlement disputes?
An effective starting point is documenting the unit's condition before move-in with photos and in writing, then sharing that record with the tenant. Alongside this, it helps to walk the tenant through the cost-allocation logic carefully at signing, and to present move-out estimates that clearly show the item, quantity, unit price, and whether age-based depreciation was applied. It takes extra effort, but that effort is a small investment compared with the time a dispute would otherwise consume.
