In Japan’s rental market, shikikin (敷金, security deposit), shokyakukin (償却金, non-refundable amortized deposit), shikibiki (敷引き, fixed non-refundable deduction), and hoshokin (保証金, guarantee deposit) may sound similar, but they differ in refundability and purpose. If these terms are explained vaguely at signing, landlords and property managers can lose tenant trust when move-out settlement is calculated.
For readers outside Japan, this is a distinctly Japan-specific set of practices. In many markets, a “security deposit” is expected to be refundable except for clearly documented deductions, whereas in Japan some contracts also include expressly non-refundable components agreed in advance. Likewise, what is called a “guarantee deposit” in Japan may function differently from what overseas investors expect from a standard residential deposit.
Key points in this article
Shikikin(敷金, security deposit) is, in principle, money held on deposit and may be applied to unpaid rent or tenant-borne restoration costs.Shikibiki(敷引き) andshokyaku(償却, amortization) are special contract clauses that predetermine a non-refundable portion.Hoshokin(保証金, guarantee deposit) changes meaning depending on region and property use, so the contract definition is critical.- Move-out settlement disputes can be reduced by keeping photos, estimates, and a clear allocation of responsibility.
Start by separating the terms
Shikikin (敷金, security deposit) is money the landlord holds under the lease agreement. If there are rent arrears or restoration costs that the tenant must bear, those amounts are deducted and the balance is returned. Unlike reikin (礼金, key money or non-refundable gratuity), the basic premise is that shikikin is refundable to the extent any balance remains.
Shokyakukin (償却金, amortized/non-refundable deposit) and shikibiki (敷引き, fixed deduction from the deposit) are contractual arrangements under which a certain amount of the money paid upfront will not be returned. Some of these practices remain as regional custom, such as the hoshokin and shikibiki structure seen in parts of the Kansai region, but the tenant must still receive an explanation they can understand.
Check the differences at a glance
| Term | Refundability | Main purpose | Key caution |
|---|---|---|---|
Shikikin (security deposit) |
Remaining balance is generally returned | Rent arrears; tenant-borne repairs | A settlement breakdown is necessary |
Shokyakukin (amortized/non-refundable amount) |
Not refunded if so provided by contract | Equivalent of restoration costs; contractual condition | Avoid double charging |
Shikibiki (fixed deduction) |
A fixed amount is deducted | Regional practice; simplified settlement | Inadequate explanation can lead to disputes |
Hoshokin (guarantee deposit) |
Depends on the contract definition | Similar to a deposit, or business-use security | Return conditions must be stated clearly |
Restoration obligations and the risk of double charging
Even if shokyakukin or shikibiki is set in the contract, that does not mean the landlord can add any further charge they wish. If the tenant is made to bear costs for ordinary wear and tear or natural aging, issues are more likely to arise in light of Japan’s Ministry of Land, Infrastructure, Transport and Tourism restoration guideline.
In practice, owners and managers should distinguish between costs already covered by the amortized or deducted amount and separately billable damage caused by the tenant’s intentional act or negligence. Photos at move-out, the move-in inspection record, and itemized repair estimates are necessary. Compared with some overseas markets where cleaning or repainting fees are routinely standardized, Japanese practice places heavier weight on the distinction between normal deterioration and tenant-caused damage.
Items that should be explained at contract signing
The lease should clearly state the amount, whether it is refundable, when amortization applies, the scope of permitted application, and how it relates to move-out settlement. In particular, if shikibiki is used in eastern Japan, where it is less familiar to tenants, it should be explained carefully during the legally required important matters explanation (juyo jikou setsumei, 重要事項説明).
To make explanation easier for management staff, wording should be aligned across the marketing sheet, the important matters explanation, and the lease itself. If the terminology differs from document to document, disputes at move-out often take the form of “I was never told that.”
Practical checklist for owners
For move-out settlement, keep one complete set consisting of move-in photos, move-out photos, the contractor’s estimate, an allocation table showing who bears which costs, and the settlement statement. When sending the explanation to the tenant, it is important to show not only the amount but also the basis for it.
Shikikin is not operating cash flow; it is money held on deposit. If it is effectively spent as though it were free cash, the return obligation becomes painful later. Separating contract administration from accounting treatment supports more stable rental operations.
Information that should appear in the move-out settlement statement
Many move-out settlement disputes arise less from the amount itself than from inadequate explanation. If the tenant cannot understand what the money was used for and how much was allocated to each item, distrust can remain even where the disputed amount is small.
| Settlement statement item | Purpose |
|---|---|
Initial shikikin / hoshokin paid |
Confirm the amount held on deposit |
Shokyaku / shikibiki amount |
Amount contractually designated as non-refundable |
| Tenant-borne repairs | Explain damage caused by intent or negligence |
| Landlord-borne repairs | Separate ordinary wear and tear and aging deterioration |
| Refund amount / additional charge | Clarify the final settlement result |
How to reduce disputes from the listing stage
If shikibiki or shokyakukin is part of the deal, the structure should be made clear not only at contract signing but also from the listing stage. If the initial cost section, the important matters explanation, the lease, and the explanation of move-out settlement all match, tenants are more likely to accept the arrangement.
Even when a management company handles operations, owners should understand the terminology themselves. If, at move-out, the owner simply demands additional charges and leaves everything else to the manager, frontline staff can become trapped between the owner and the tenant. Understanding the system is also an investment in protecting on-site personnel.
Balancing regional custom and the duty to explain
Practices around shikibiki and amortization of hoshokin differ by region. However, simply saying “this is standard in the area” is not always enough for the tenant. At contract signing, the refundable portion, the non-refundable portion, and any items that may still be charged separately should be explained separately and clearly.
Owners sometimes keep explanations thin because they do not want initial costs to look high. In practice, that tends to create dissatisfaction at move-out. It is usually more efficient to disclose the terms at the listing stage and preserve move-in photos and settlement standards from the outset, reducing complaint-handling time later. In many non-Japanese markets, regional custom alone carries less weight than express written disclosure; in Japan as well, clear documentation is what makes these clauses operationally defensible.
Frequently asked questions
What is the difference between shokyakukin and shikikin?
A. Shikikin is money held on deposit, with the remaining balance generally returned. Shokyakukin is the portion that the contract says will not be refunded.
Is shikibiki illegal?
A. It is not automatically illegal. However, if the amount, the explanation, or the contract terms are unreasonable, it can lead to disputes.
Can additional charges still be claimed even if there is shokyakukin?
A. Potentially yes, if there is damage caused by the tenant’s intentional act or negligence that falls outside the amortized scope. The charges must be organized so they do not amount to double billing.
Is hoshokin always returned?
A. It depends on the contract definition. Check the lease for whether shikibiki or amortization applies, when any return is made, and what items the deposit may be applied to.
Related reading
- What Is Restoration Work? Cost Allocation and Process for Rental Properties
- How Did Japan’s Civil Code Revision Change Security Deposits and Restoration Obligations?
References
