When renting a property in Japan, one of the most common—and often unavoidable—requirements is the use of a guarantor or a rental guarantee company. While not legally mandated, this system functions as a form of financial protection for landlords in the event of rent default or contract violations. As such, nearly all lease agreements in Japan incorporate some form of guarantee arrangement.

For foreign nationals in particular, it can be difficult to secure a personal guarantor, often due to the lack of eligible local contacts. In this context, rental guarantee companies have emerged as a vital alternative, offering a structured, contract-based solution that ensures compliance with landlord requirements.

By understanding how these systems work, foreign tenants can avoid misunderstandings or disputes during the lease process and secure accommodation more efficiently. This section provides a fact-based comparison of guarantors and guarantee companies, outlining their respective roles, pros and cons, and identifying the most realistic and accessible options for non-Japanese residents.

What Is a Guarantor in the Japanese Rental Market?

In Japan’s rental system, a guarantor is an individual who assumes financial responsibility on behalf of the tenant in cases such as unpaid rent, property damage, or other breaches of contract. In many cases, the role is formalized as a joint guarantor, which carries a high level of legal liability, equivalent to that of the tenant.

A joint guarantor can be held directly liable by the landlord—even if the tenant disappears without notice—and must fulfill payment obligations without exception. This role is typically assumed by a Japanese relative or close family member, and the responsibility involved is substantial. For foreign residents, however, this system often presents a significant barrier. Without local family or trusted connections in Japan, many foreigners struggle to identify a suitable guarantor.

Even if a personal contact is available, becoming a guarantor requires stable income, a fixed address, and often Japanese citizenship or a long-term visa status, making it a difficult request.

What Is a Rental Guarantee Company?

A rental guarantee company is a legal entity that assumes responsibility for a tenant’s rent obligations in place of a personal guarantor. These companies have become a widely adopted alternative—particularly when the tenant does not have a guarantor or when landlords prefer not to use the traditional guarantor system.

If the tenant fails to pay rent, the guarantee company temporarily covers the outstanding amount on their behalf and subsequently seeks reimbursement from the tenant. This arrangement provides landlords with financial security and ensures continued rent flow.

Guarantee company usage is often required by real estate agencies or landlords as part of the leasing process. Tenants are typically charged a guarantee fee upon signing the lease, usually ranging from 50% to 100% of one month’s rent, with annual renewal fees of approximately ¥10,000 to ¥20,000.

Applicants must undergo a screening process, which assesses visa status, employment verification, income stability, and credit history. For foreign nationals, using a guarantee company is often considered an essential condition for securing a rental property in Japan.

Key Differences Between Guarantors and Guarantee Companies

The primary distinction between a guarantor and a rental guarantee company lies in who assumes financial responsibility—an individual versus a corporate entity. The guarantor system is based on personal trust and relationships, often involving a family member or close acquaintance. In contrast, a guarantee company offers a service-based model in which financial assurance is provided in exchange for a fee.

While guarantors usually offer their support at no cost, guarantee companies charge a usage fee, typically upon contract signing and at annual renewal intervals. When problems such as rent delinquency arise, guarantors may need to engage directly with the landlord, which can lead to emotionally or socially challenging situations. With guarantee companies, however, all communication and dispute resolution are handled at the corporate level, reducing the tenant’s emotional and administrative burden.

That said, guarantee companies require prior approval, and screening criteria vary by company, meaning approval is not guaranteed for every applicant. Additionally, in the event of rent non-payment, tenants are still responsible for reimbursing the guarantee company for any advanced payments.

Practical Options for Foreign Tenants in Japan

For foreign nationals seeking rental housing in Japan, the most realistic and widely accepted option is the use of a rental guarantee company. In fact, many landlords prefer this arrangement over requiring a personal guarantor, as it provides greater contractual assurance, especially when renting to non-Japanese tenants.

In recent years, some guarantee companies have tailored their services specifically for foreign residents, offering features such as multilingual support, identity verification via residence cards, and screening procedures aligned with specific visa types. However, as not all applicants pass the screening process, it is advisable to work with real estate agencies that partner with multiple guarantee companies, increasing the chances of approval.

There are also a limited number of rental properties—typically targeted at international students or corporate expatriates—that do not require a guarantor or guarantee company. These often come with higher rent or long-term contract requirements, so tenants should evaluate the terms carefully before committing.

Key Points to Confirm Before Signing a Lease

Whether a lease requires a personal guarantor or a rental guarantee company significantly impacts the documents, fees, and obligations associated with the contract. Therefore, it is essential to clarify which system is required prior to signing and proceed after fully understanding the conditions.

For guarantee companies, tenants should confirm the initial guarantee fee, payment timing, renewal charges, screening criteria, and the company’s policies on late payments. When using a personal guarantor, it is important to determine whether the role involves joint liability, and to clearly explain the legal responsibilities to the guarantor in advance.

Careful review of all clauses related to guarantees in the lease agreement and important matters explanation is crucial. Tenants should not hesitate to ask questions about unclear terms, as doing so can prevent misunderstandings. Although the guarantee system may seem complex at first, a clear understanding of its structure allows foreign tenants to navigate Japan’s housing market with greater confidence and realism.