In Japan’s rental housing market, lease renewals typically occur every two years. While it is well known that renewal fees and insurance renewals are common financial obligations at that time, fewer tenants are aware that rent adjustments may also occur.

Many tenants assume that “renewal” means all conditions—including rent—remain unchanged. However, it is not uncommon for landlords to revise the rental rate in accordance with the lease agreement. This can lead to unexpected rent increases, especially in areas where land values or consumer prices have risen significantly. Such adjustments are often tied to regional market trends and property valuations. In areas experiencing economic growth or redevelopment, landlords may see an opportunity to align the rent with current market standards.

This article explores whether rent increases are legally permissible at the time of renewal, under what conditions they may occur, whether tenants can refuse them, and which terms should be clarified in advance to avoid surprises—all based on established real estate practices in Japan.

The Relationship Between Lease Renewal and Rent Adjustment

In Japan’s rental housing market, it is common for lease agreements to continue through renewal after a fixed term has ended. In particular, under the standard lease contract, the agreement is automatically extended if both the landlord and tenant mutually agree to continue. During this renewal process, the landlord may present updated terms, and the lease is maintained only once the tenant consents to these new conditions.

One of the key conditions subject to change is the rent. Legally, landlords are permitted to request a rent adjustment at the time of renewal, provided certain conditions are met. Likewise, tenants may also request a rent reduction based on economic circumstances or changes in market value.

However, rent cannot be adjusted arbitrarily. Modifications are bound by the original lease contract and relevant Japanese laws, which impose legal standards to prevent unreasonable rent increases. While the possibility of an increase at renewal is real, it is not automatically granted or enforceable without proper justification.

Legal Basis and Conditions for Rent Increases

Under Japan’s Land and House Lease Act, there are clearly defined legal provisions governing rent adjustments. A landlord may request a rent increase under specific circumstances, such as:

• Significant economic changes, including increases in property taxes or insurance premiums.

• A notable discrepancy between the current rent and the prevailing market rates in the surrounding area.

• A substantial rise in maintenance or management costs that imposes an undue burden on the landlord.

However, even when such justifications exist, a unilateral rent hike by the landlord is not permissible. If the tenant does not consent to the proposed increase, the matter may ultimately require judicial resolution. In practice, rent adjustments are typically settled through mutual negotiation between the parties involved.

Rent Revision Clauses Commonly Found in Lease Agreements

Many residential lease agreements in Japan include provisions such as, “Rental fees and other terms may be subject to change upon mutual consultation at the time of contract renewal.” This clause provides the landlord with flexibility to propose rent adjustments in the future. However, it does not necessarily imply that rent will change at every renewal.

In some cases, agreements may stipulate that “the landlord reserves the right to review the rent in accordance with market fluctuations.” While such language facilitates discussions on rent increases during renewal, if the tenant disagrees with the proposed terms, it may result in the non-renewal of the contract.

Conversely, certain properties—especially those under corporate lease agreements or fixed-rate rental systems—contain explicit clauses stating that “the rent shall remain unchanged during the contract term and upon renewal.” These arrangements are often structured to prioritize stability and predictability.

In light of the above, reviewing the specific rent-related provisions within your lease agreement is the first and most essential step in avoiding unexpected changes in rental fees at the time of renewal.

Scenarios Where Rent May Be Increased Upon Renewal

There are several circumstances in which a rent increase may be implemented at the time of lease renewal in Japan.

One such case arises when the market rental rates in the surrounding area have appreciated. This may occur due to factors such as the construction of new residences or urban redevelopment projects near major stations. In these situations, if an existing property’s rent is deemed significantly below the revised market standard, landlords may initiate a rent adjustment.

Another common scenario involves recently constructed properties with premium specifications. In some cases, these residences are initially offered at a comparatively favorable rate to attract tenants. Upon the second or subsequent lease renewals, landlords may gradually raise the rent.

Additionally, rent increases may be effectively implemented through adjustments in ancillary costs. For example, while the base rent may remain unchanged, increases in management or maintenance fees may result in a higher overall monthly obligation for the tenant. This approach is often employed to align total occupancy costs with current market conditions while maintaining nominal rental stability.

Can a Tenant Refuse a Rent Increase?

When a proposed rent increase is presented at the time of lease renewal, tenants may question whether they are obligated to accept the new terms. If a tenant does not agree to the increased amount, the renewal may not proceed; however, Japanese tenancy law generally protects the tenant’s right to remain, and a landlord cannot unilaterally refuse renewal without just cause.

In situations where consensus on the new rent cannot be reached, the matter may ultimately be resolved through formal mediation or legal proceedings, during which a fair rental amount is determined. Nonetheless, in practice, the majority of such disputes are settled through mutual negotiation and compromise.

For tenants, conducting thorough market research is key. Evaluating comparable rental properties in the same area, with similar construction age and layout, provides a strong foundation for informed discussion. Presenting this data during negotiations with the landlord or property management company can greatly enhance the possibility of reaching favorable terms.

Proactive Measures to Consider Before Signing a Lease

To mitigate the risk of unexpected rent increases, it is essential to approach lease negotiations with foresight regarding potential future adjustments. Particular attention should be paid to the clauses related to rent revisions. Prospective tenants are encouraged to review these provisions carefully and seek clarification—preferably through a real estate intermediary—if any aspects appear ambiguous or open-ended.

In addition, posing questions such as, “Will this rental amount remain unchanged upon renewal?” during the initial discussions signals a proactive stance and communicates your expectations clearly. In some cases, landlords may even reflect such assurances directly in the contract, providing an added layer of transparency and security.

Ultimately, whether rent increases will occur at the time of renewal often hinges on the tenant’s diligence at the outset—through both thorough due diligence and meticulous contract review. For those seeking a stable and satisfying rental experience, a detail-oriented approach at the time of signing is indispensable.