Understanding the “Important Matters Explanation” Before Signing a Lease
Just before signing a lease agreement in Japan, tenants undergo a legally required briefing known as the Important Matters Explanation. Often delivered rapidly by the agent, many renters find themselves nodding along without fully digesting the content.
However, this step is more than a formality—it is a critical opportunity for the tenant to understand and agree to the terms of the lease. Failing to grasp the details can result in future disputes, where landlords may rightfully claim, “You signed the contract.”
In this guide, we’ll explain what the Important Matters Explanation entails, highlight the key items it covers, and outline the specific points every renter should confirm—ensuring you sign with confidence and clarity.
Explanation of Important Matters
In accordance with the Real Estate Transaction Business Act of Japan, an “Explanation of Important Matters”—commonly referred to as Jūyō Jikō Setsumei—is a mandatory briefing conducted in person by a licensed real estate transaction agent prior to the execution of any lease or sales agreement.
This legal requirement exists to safeguard the rights and interests of tenants and purchasers within Japan’s real estate market. The explanation must be provided by a certified professional and is intended to ensure complete transparency regarding the property in question.
The details are formally presented through a document called the “Important Matters Explanation Sheet”, which is read aloud to the client. The client is then required to provide their signature and seal to confirm their understanding and acknowledgment of the content, separate from the official contract.
Key Items Explained in the Important Matters Briefing
| Item | Description |
|---|---|
| Property Address and Structure | Includes the precise address, number of floors, floor area, and room layout. |
| Building Management Conditions | Covers whether a property management company is in place and outlines maintenance and cleaning arrangements. |
| Lease Term and Renewal Options | Specifies whether the lease is typically for two years or under a fixed-term rental contract. |
| Financial Terms: Rent, Security Deposit, Key Money | Details initial costs, renewal fees, and any penalties for contract breaches. |
| Notice Period for Termination | Indicates the required notice period prior to vacating the property. |
| Repairs and Equipment Maintenance | Clarifies obligations for maintaining facilities and who bears responsibility for repairs. |
| Restoration Obligations | Defines the extent to which the property must be restored upon departure, in line with Ministry of Land, Infrastructure, Transport and Tourism guidelines. |
| Special Contract Provisions | Ensures that no unfavorable terms are imposed beyond the standard agreement. |
Practical Checklist for Tenants: What to Verify Before Signing
✅ Type of Lease Agreement: Ordinary vs. Fixed-Term
An Ordinary Lease is generally renewable by default, whereas a Fixed-Term Lease terminates upon expiration—requiring a formal renewal if continued occupancy is desired.
✅ Rent, Management Fees, and Renewal Charges
Confirm the full scope of payment responsibilities, including due dates, acceptable payment methods, and any processing fees (e.g., for automatic bank transfers).
✅ Penalties and Notice Requirements for Termination
Be vigilant about any special clauses such as: “Early termination within X months incurs a penalty equal to X months’ rent.” Such provisions can lead to complications during move-out.
✅ Clauses Related to Restoration and House Cleaning
Clarify the extent of financial responsibility for restoration or cleaning costs at the end of tenancy, especially if the contract is vague on these terms.
✅ Policies on Pets, Musical Instruments, and DIY Renovations
Lifestyle flexibility is crucial—ensure you thoroughly review any restrictions that could impact how you live, such as bans on pets, instruments, or interior modifications.
Common Pitfalls: “I Was Told, But I Didn’t Understand”
-
A tenant was billed ¥50,000 for cleaning upon move-out—only to realize the charge was outlined in a special clause they hadn’t grasped at signing.
-
Another assumed their lease would renew automatically, but it turned out to be a fixed-term contract with no renewal option, resulting in unexpected eviction.
-
One tenant expected their security deposit to be refunded, only to overlook the word “non-refundable” in the agreement.
In each case, property managers cited the Explanation of Important Matters as proof that the tenant had been informed. If the tenant didn’t ask questions or clarify unclear terms during the briefing, they are seen as having accepted them. If you encounter unfamiliar language or ambiguous clauses, it is essential to ask questions on the spot.
Toward a New Era of Remote Explanations: Embracing IT-Based Briefings
In recent years, a growing number of property transactions in Japan have begun accommodating IT-Based Explanations of Important Matters, allowing tenants to receive the legally mandated briefing via video conferencing instead of in person.
This digital approach has proven particularly convenient for international clients and those residing far from the property, and is recognized as legally valid provided certain requirements are met.
However, since attention tends to wane during screen-based meetings, it is strongly recommended that clients thoroughly review the documents in advance and prepare notes or questions beforehand to ensure a productive session.
A Contractual Act Requiring the Tenant’s True Understanding and Consent
The Explanation of Important Matters is not only a legal obligation—it is also a crucial step in helping tenants fully comprehend the terms of their residency and their corresponding responsibilities.
It is not enough to passively listen. Tenants are expected to engage actively: to interpret the contract in their own words, seek clarification when needed, and sign only after achieving full understanding and consent.
This document—presented prior to the official lease contract—serves as the first line of defense in ensuring peace of mind throughout the tenancy.