When a tenant moves out of a rental unit in Japan, one of the most common flashpoints is who pays to restore the wallpaper. The answer is governed by a concept known as depreciation, the idea that a finish loses value simply through the passage of time. For property managers and landlords, understanding how this works, and its legal basis, is directly tied to avoiding disputes with departing tenants.
What does wallpaper depreciation actually mean?
Depreciation is the idea that the value of a physical thing declines over time. In a Japanese rental unit, the longer a tenant has lived there, the smaller the share of any wallpaper repair cost that tenant is expected to cover. This holds even when the tenant carelessly damages the wallpaper: the portion of the loss attributable to ordinary aging is, as a rule, the landlord's responsibility, because that portion of value has already been used up simply by time passing.
This is a sharper standard than the doctrine familiar to many English speaking landlords, commonly called normal wear and tear in the United States and the United Kingdom. That doctrine has no fixed depreciation schedule at all: a landlord or a court makes a subjective, case by case judgment about reasonable wear. Japan's approach, set out in a Ministry of Land, Infrastructure, Transport and Tourism guideline on move out restoration disputes, replaces that open ended judgment with an actual depreciation curve tied to specific years of tenancy.
The wallpaper depreciation schedule
- One year after move in: about 83 percent of value remains (roughly 83 percent of the new wallpaper's price is the portion still notionally chargeable to the tenant)
- Three years after move in: about 50 percent of value remains
- Six years after move in: the residual value is essentially one yen, in effect zero
In other words, once a tenant has lived in a unit for six years or more, damage to the wallpaper that qualifies as ordinary wear is, in almost every case, the landlord's cost to bear, precisely because the guideline treats the wallpaper as having already depreciated down to nothing.
When does a tenant still have to pay, even though residual value has hit zero?
Reaching a residual value of one yen does not mean every kind of damage automatically becomes the landlord's problem.
Damage caused intentionally or through negligence remains the tenant's responsibility
Under the Ministry of Land, Infrastructure, Transport and Tourism's guideline on disputes and standards concerning move out restoration, any damage that is clearly not the result of ordinary wear remains the tenant's financial responsibility, regardless of how many years have passed and regardless of what the depreciation schedule says about residual value. The guideline gives concrete examples, including:
- Graffiti or drawings made by children
- Mold caused by a leak that was left unattended
- Damage that reaches the deep structural board behind the wall, caused by nails or screws
- Mold or grime around plumbing fixtures caused by neglecting basic cleaning
What is the "duty of care of a good manager"?
Article 400 of Japan's Civil Code sets out the duty of care of a good manager (zenkan chui gimu), the obligation for a tenant to look after the rented unit with the diligence a prudent custodian would use, for as long as they occupy the unit, up until the day it is handed back to the landlord.
Typical breaches include spilling a drink and leaving it unattended until mold develops, ignoring a window leak until the surrounding material rots, and neglecting to clean plumbing fixtures until mold and grime accumulate. None of these stem from the simple passage of time; they stem from a failure to look after the property with reasonable diligence, which is exactly why the depreciation schedule does not shield a tenant from liability here.
What should a property manager check at move out?
- Cross check the length of the tenancy against the location of any damage, using the depreciation schedule as a reference point
- Keep an objective record of whether damage stems from intent or negligence versus ordinary aging, ideally by comparing photographs taken at move in and at move out
- Check any repair cost estimate for consistency with the Ministry of Land, Infrastructure, Transport and Tourism guideline
Related reading
Frequently asked questions
- Q. If a tenant has lived in a unit for six years or more, is the full cost of replacing the wallpaper always the landlord's responsibility?
- A. As a rule, damage from ordinary wear and aging is the landlord's cost once residual value has reached zero. Damage arising from intent, negligence, or a breach of the tenant's duty of care remains the tenant's responsibility regardless of how long the tenancy lasted.
- Q. What share of the cost does a tenant bear after a short tenancy, say one to two years?
- A. The shorter the tenancy, the higher the wallpaper's residual value, so where damage results from intent or negligence, the tenant's share of the cost is correspondingly higher.
- Q. If only part of the wallpaper is damaged, can the landlord charge for replacing the entire wall?
- A. Under the Ministry of Land, Infrastructure, Transport and Tourism guideline, the general rule is that only the damaged section can be charged. There are exceptional cases, however, where replacing an entire wall is accepted as necessary to match the surrounding color and pattern.
- Q. What is the single best way to prevent a dispute at move out?
- A. The most effective steps are a photographic record from both move in and move out, a written checklist, and spelling out any special lease terms clearly in advance.
