Updated on December 2, 2016 

Japanese real estate terminology by category:

Brokerage

Real Estate Transaction Specialist -宅地建物取引士 Takuchi tatemono torihikishi

A person who passes an exam and is registered by the prefectural governor and receives a Real Estate Transaction Specialist license. During the conclusion of the lease contract, Important Matters are only allowed to be explained by a Real Estate Transaction Specialist.

Brokerage fee -仲介手数料 Chukai tesuryo

A fee paid to a real estate company as a commission for referral and agreement procedures involved in the purchasing, selling and leasing of real estate properties.

Agency -代理 Dairi

To represent concerned parties (purchasers, sellers, lessors and lessees) so as to carry out real estate transactions on behalf of such parties.

Exclusive right-to-sell/lease (Exclusive right-to-represent buyer/tenant) -専属専任媒介 Senzoku sennnin baikai

To request brokerage services from only one real estate company. A client who has made such a request to a real estate company is prohibited from making multiple requests to other real estate companies at the same time, or directly entering into an agreement with a counterparty that the client has found on his/her own. Upon entering into such an agreement, the client is obliged to arrange said agreement through the real estate company that they have requested to perform brokerage services. Meanwhile, a real estate company that enters into such an agreement of exclusive right-to-sell/lease (exclusive right-to-represent buyer/tenant) is subject to business obligations, such as registering property information at a designated real estate information network within five days from the date of the agreement, and to make activity reports to the client at least once per week.

Exclusive brokerage -専任媒介 Sennnin baikai

Nearly identical to the case of exclusive right-to-sell/lease (exclusive right-to-represent buyer/tenant), a client who has made such a brokerage request to a real estate company is prohibited from making multiple requests to other real estate companies at the same time, but can directly (without requesting brokerage services from any real estate company) enter into an agreement with a counterparty that the client has found on his/her own.

Non-exclusive brokerage -一般媒介 Ippan baikai

The client can request brokerage services from multiple real estate companies at the same time, and can also enter into an agreement with a counterparty that the client has found on his/her own without requesting brokerage services from any real estate company. In addition, real estate companies under such an agreement have no obligations, such as making reports to the client.

Buying and selling

Jitsuin (Registered seal) -実印 Jitsuin

A legally valid seal that is registered with a local government where the owner of the seal resides. The seal confirms that a contract is concluded with the person’s own intent and surely by the person him/herself. The seal also clarifies the liability of the person in the contract.

Inkan shomeisho (Seal certificate) -印鑑証明書 Inkan shomeisho

A written certificate that verifies the credibility of the seal (jitsuin) registered to a local government. It is used for buying and selling of real estate and automobiles, and for preparing a notarial deed, as a third party vouches for the validity of the seal.

Touki (Registration) -登記 Touki

The act of registering the area, location and the owner’s name and address to toukibo (official registry). Toukibo ensures a safe and smooth transaction by disclosing the status of rights and other related information available to the public.

Jyuminhyo (Residence records) -住民票 Jyuminhyo

Jyuminhyo is a registry of the name, address and other information of an individual, which authenticates the resident’s address and other information. Jyuminhyo is required for renting, buying and selling of real estate.

Affidavit -宣誓供述書 Sensei kyojutsusho

As there are no similar systems to jyuminhyo and jitsuin, which are necessary for buying and selling of real estate, outside of Japan, an affidavit acts as a substitute for resident records and jitsuin. The document is authenticated by making an oath and signing in front of the notary public, confirming the name, date of birth, address and resident number, and that they are the information of the person signing the document.

Confirmation of purchase -買付証明書 Kaitsuke shomeisho

A document issued to a seller or an agent from a person who is interested in buying a property. The document states the asking price, payment method, time of payment and other desired conditions and confirms the intent of purchasing the property. As the document only confirms the intent of purchasing, the person issuing the document will not be obliged to purchase the property and make a contract. Therefore, the person issuing the document may cancel the document before making a buying and selling contract and no penalty will be incurred.

Cooling-off -クーリングオフ Cooling-off

A special system that enables the unconditional cancellation of a contract during a certain period of time after making the contract, giving the consumer time to reconsider the transaction. In real estate transactions, although there are several conditions, cooling-off is basically available for a contract for buying and selling of land and buildings if the contract is made in a place other than the office of the agent. The cooling-off period is eight days.

Notification under the National Land Use Planning Act -国土法届出 Kokudoho todokede

Notification regarding land transactions. Pursuant to the National Land Use Planning Act, submission of a notification is required when land having a size equal to or exceeding a specified area is traded.

Setback requirements -セットバック Setback

If a property site abuts a road that falls under Article 42, Paragraph 2 of the Building Standards Act and is narrower than four meters, a portion of the site is considered to be part of the road, and a building on that site must be constructed to be set back a certain distance, so as to secure the road to have the width prescribed by the Act. Regulations are set to the effect that, if a road is narrower than four meters, a building which abuts the road must be set back from the road’s center line by two meters, and if the other side of the road is a cliff, river, etc., the building must be constructed so that it is set back from the edge of the road (on the side of the cliff, river, etc.) by four meters. *In addition to the above, the word “setback requirements” may also be used when a building’s upper floors are built in step-like recessions so as to secure sunlight and ventilation, etc.

Private road contribution -私道負担 Shido Futan

To contribute (offer) a portion of the land for use as a road. This term may also refer to a portion of the site that is contributed as a private road when a traded property site includes a private road.

Housing loans (Mortgage) -住宅ローン Jutaku ron

A loan offered by financial institutions, etc., limited to the purpose of acquiring residential land, purchasing a house, building a new house or renovating a house, etc. It is generally offered with low interest rates, since the loan is secured by the collateral of land and housing purchased, carrying a lower risk for financial institutions. “Housing loan” is a loan limited to the house one actually lives in. In the case of real estate investment or purchase of a vacation house, different types of loans, such as “second house loan,” are required.

Non-recourse loans -ノンリコースローン Non rikosu ron

A loan for which a borrower cannot be held responsible for any amount in excess of the collateral of land and housing. In case a borrower defaults on the loan, the lender can only foreclose on the collateral real estate property and cannot take further action to demand the repayment. It is called “non-recourse” as the lender cannot hold the borrower personally responsible in the event of a default.

Recourse loans -リコースローン Rikosu ron

A type of loan that allows a lender to go after the borrower’s assets not limited to land and housing used as loan collateral or to make a demand to the guarantor for repayment, in case of a default.

Cancellation clause of the contract due to failure to obtain a loan -ローン特約 Ron tokuyaku

Contracts may be concluded based on the premise that a buyer will take out a housing loan, as a real estate purchase generally requires a large amount of money. In case a buyer fails to obtain loan approval from a financial institution, etc., the contract may be cancelled if a cancellation clause is agreed in advance by a seller and a buyer. By specifying conditions, such as the name of the financial institution which a buyer plans to apply for a housing loan, the deadline for obtaining approval for such loan and agreement for deposit refund, the clause may prevent the occurrence of various problems* in the future. *Problems include cases that the contract cannot be cancelled as a seller complains that “a buyer should ask other financial institutions for a housing loan” or “a buyer should continue applying for a housing loan as long as it takes,” or a seller does not refund the deposit to a buyer.

Fixed interest rate -固定金利 Kotei kinri

An interest rate that does not fluctuate during the term of the loan. The amount of repayment is fixed.

Variable interest rate -変動金利 Hendo kinri

An interest rate that fluctuates during the term of loan, reflecting interest rate trends, etc. The amount of repayment fluctuates.

Prepayment of the loan -繰り上げ返済 Kuriage hensai

An early repayment of a loan, in part or in full, which is made in addition to a monthly repayment. The prepaid amount is applied to the principal repayment, so as a result, it reduces interest payment or shortens the repayment period. There are mainly two types of prepayments: a “term shortening type” that shortens the repayment period; and a “monthly repayment reduction type” that reduces the amount of monthly repayment.

Tax credit relating to housing loans -住宅ローン減税 Jutaku ron genzei

A special taxation measure for tax credits, applied to a tax payer who has built or bought a house using a housing loan and meets certain conditions. Approximately 1% of the remaining housing loan balance as of the end of the year can be deducted from the amount of income tax, etc. The borrower of the housing loan needs to apply for this tax credit.

Long-life quality housing -長期優良住宅 Choki yuryo jutaku

A house certified as quality housing, with measures for long-life use in good condition. A person who wishes to acquire such certification shall prepare a “Long-life quality housing construction/maintenance plan” and apply to a competent government authority. This system is based on the “Act on the Promotion of Popularization of Long-life Quality Housing” (effective June 4, 2009). It aims to reduce waste and the environmental burden of society as a whole by facilitating the long-term use of quality housing and mitigate financial burdens on people through cost reductions associated with reconstruction, etc.

Loan agreement -金銭消費賃借契約 Kinsen syohi chinsyaku keiyaku

A contract between a borrower and a lender that evidences a loan. By stating details, such as the amount of the loan, the repayment period, the interest rate and the purpose of the loan, etc., it may prevent the occurrence of various problems between a borrower and a lender in the future.

Group credit life insurance -団体信用生命保険 Dantai shinyo seimei hoken keiyaku

An insurance system for the event of a borrower’s death or designation of severe disability. The amount equivalent to the loan balance at the time of the event will be paid, and the housing loan will be paid off. Most of the financial institutions’ housing loans in Japan require group credit life insurance.

Flat 35 housing loan -フラット35 Furatto 35

A housing loan scheme with a fixed interest rate for the term of the loan offered collaboratively by private financial institutions and the Japan Housing Finance Agency (JHF). Since the interest rate and the amount of repayment are fixed until the repayment is completed, repayments can be made in a carefully planned manner. Once the housing loan is made to the borrower, the loan’s receivable is transferred to the JHF. Then the JHF entrusts the receivable and issues bonds secured by it to investors so as to procure funds for the housing loan. Although the receivable is transferred to the JHF, the private financial institution commissioned by the JHF remains as the provider of counter services such as various procedures to be conducted by the borrower.

Flat 50 housing loan -フラット50 Furatto 50

A housing loan system for those qualified for long-life quality housing limited to the maximum repayment period of 50 years. Applications for such loans can only be made at an age less than 44. Meanwhile, there is a system called “parent and child relay repayment.” Applications for this system are allowed even at an age of 44 or above. Monthly repayment amounts are reduced with a longer repayment period, promoting purchases of long-life quality housing. However, the total repayment amount is increased since repayments are made over a longer period of time.

Owner change -オーナーチェンジ

Only the owner of rental housing changes while the resident remains in the housing (lease agreement continues). If the rental housing property has no residents, the change is not called an owner change.

Warranty against defects -瑕疵担保責任 Kashitaｍpo sekinin

A liability assumed by the seller against the purchaser for defects of the property subject to a buying and selling contract that were not revealed at the time of purchase. This includes the repairing of the defects, compensation for damage resulting from the defects and cancellation of the contract.

Earnest money -手付金 Tetsukekin

Money paid by the purchaser to the seller serving as a proof of the conclusion of a sales contract for a real estate property. It does not comprise a part of the sales amount. The money is once forwarded to the seller by the purchaser. When the purchaser pays the total amount, the money is returned to the purchaser. This troublesome procedure is usually avoided by stating in the sales agreement that the earnest money shall be allocated to a part of the sales amount when the remaining amount is paid, and the money is allocated to a part of the sales amount. The earnest money is also considered as a security in case that the agreement is cancelled and serves as a guarantee that both the seller and the purchaser will not freely cancel the agreement. Upon cancellation of the agreement, when the cancellation is proposed by the purchaser, the purchaser gives up the money. When the cancellation is proposed by the seller, the seller must return the total amount of the earnest money and also pay an equivalent amount to the purchaser (which means paying twice the amount of the earnest money). The earnest money amount is generally set at around 10% of the sales amount.

Cancellation by forfeit of earnest money/Release of earnest money
-手付解除／手付放棄 Tetsuke kaijyo/Tetsuke hoki

If one desires to cancel a concluded agreement after paying earnest money (tetsukekin), he/she can cancel the agreement unconditionally by forfeiting the earnest money. This action is called Cancellation by forfeit of earnest money. For this cancellation to take effect, the earnest money must be cancellation earnest money (kaiyaku tetsuke), and if it is cancellation earnest money, it will be provided as such on the sales and purchase agreement. Without any provision of the nature of the earnest money, it will be regarded as cancellation earnest money. However, the cancellation by forfeit of earnest money is only effective if the counterparty has not yet commenced performance of the agreement.

Forfeit of earnest money -手付流し Tetsuke nagashi

An act of forfeiting earnest money conducted by a party who has paid such earnest money, including buyers and lessees. If the seller has already commenced performance of the agreement, the earnest money cannot be forfeited. By forfeiting the earnest money, buyers or lessees can terminate a real estate purchasing or leasing agreement.

Returning double the earnest money -手付倍返し Tetsuke baigaeshi

An act of paying back twice the amount of earnest money conducted by a party who has received the earnest money such as a seller. By returning double the earnest money (tetsuke baigaeshi), the seller can cancel a sales and purchase agreement.

Penalty fee -違約金 Iyakukin

A fee that can be claimed if there is a breach of a concluded agreement after the effective term of forfeit of earnest money. The amount of penalty fee is limited to 20% of the purchase price as stipulated by the law. Careful attention must be paid to the penalty fee as it can easily be confused with the earnest money.

Commencement of performance of agreement -履行の着手 Riko no chakushu

In a judicial precedent, the commencement of performance of agreement was defined as an act of commencing performance of an obligation. In other words, it was defined as an act that comprises a part of the performance in a form that is objectively recognizable or a prerequisite act that is indispensable for performing an obligation. Such acts conducted by the seller mainly include the registration of transfer, delivery of property, and construction work. For the buyer side, these include the intermediate payment, conclusion of a contract with moving agencies, and payment of the remaining purchase amount.

Intermediate payment -中間金 Chukankin

Money that is paid to a seller by a buyer after a sales and purchase agreement is concluded. Unlike earnest money, which is allocated as a part of the purchase price payment only after the performance of obligations, intermediate payment is immediately recognized as a part of the purchase price payment as of the time of payment.

Settlement -決済 Kessai

Payment of the sales amount (total remaining amount) made by the purchaser to the seller. In ordinary contracts for buying and selling real estate, earnest money is transferred when the contract is made. After the settlement of the remaining amount and the delivery of the property, the transfer of the ownership is completed. Settlement procedures involve exchanging a large amount of money, and the purchaser usually uses housing loans. Therefore, procedures are usually conducted at financial institutions for the sake of convenience of all parties.

Reserve funds for repairs -修繕積立金 Shuzen tsumitatekin

Funds reserved by purchasers (unit owners) of a condominium for the purpose of repairing the common areas such as exterior walls, the roof and elevators. Repair work often requires a large amount of money. Lump-sum collection of such expenses will impose a significant burden on unit owners and may lead to risks that necessary construction cannot be conducted due to lack of funds. In order to reduce such risks, funds are reserved in advance for expected future costs for repair work over a long term. The homeowner’s association uses such funds as repair work costs as necessary.

Floor area ratio -容積率 Yoseki ritsu

The ratio of the total floor space of the building against its site area. It represents the total sum of the floor space of each floor of the building built on the site.

Building coverage ratio -建蔽率 Kenpei ritsu

The ratio of the building area against its site area. It represents to what extent the land can be used for the building.

Earthquake insurance -地震保険 Jishin hoken

An insurance exclusive for earthquake disasters that covers damage due to fire incidents, destruction, being buried or washed away resulting from earthquakes, volcanic eruptions or tidal waves (tsunamis). It covers residential buildings and household belongings. With the aim of contributing to the stabilization of the life of victims of earthquake and other disasters, the government is providing reinsurance for especially large amounts of earthquake damage that exceed a certain amount of earthquake insurance liability assumed by private insurance companies.

Fire insurance -火災保険 Kasai hoken

An insurance that covers damage to buildings, household goods inside the building and other items due to fire incidents and natural disasters such as lightning strikes, wind-related disasters and flood disasters.

Real Estate Brokerage Act -宅地建物取引業法 Takuchi tatemono torihiki gyoho

An act that was established to secure the appropriate performance of operations and the fairness of transactions by real estate brokers (Act No. 176 of 1952). It aims to promote the sound development of real estate brokerage, protect the profits of buyers and facilitate smooth distribution of real estate properties by implementing a licensing system for real estate brokers and enforcing necessary regulations on their business.

Important Matters (buying and selling) -重要事項説明（売買） Jyuyojiko setsumei (Baibai)

The Real Estate Brokerage Act obligates real estate brokers to issue a Document of Important Matters and explain important matters concerning the contract, including the state of the real estate subject to the transaction, relationships of rights and trade terms, to the interested parties before entering into a buying and selling (exchanging) contract. A Real Estate Transaction Specialist must sign and seal such document and present his/her Real Estate Transaction Specialist license to the other party before giving explanations.

Management fee (buying and selling) -管理費（売買） Kanrihi (Baibai)

A management fee is a payment allocated to the management, maintenance and conservation of the common areas such as the site, entrance, corridors, stairs, rooftop, elevators, balconies and roof balconies. In general, the fee is borne according to the exclusive floor area owned by the property owner. It refers to expenses necessary to maintain and manage the jointly used facilities and equipment of condominiums and buildings. Unlike reserve funds for repairs, it is mainly composed of personnel expenses of a janitor, commissions for outsourcing administrative services to a management company, maintenance and inspection fees of equipment, costs of outsourcing cleaning services, utility expenses and nonlife insurance premiums for the common areas and operating expenses of the homeowner’s association. At large-scale buildings such as tower condominiums and high-story buildings, it is also used for maintenance and management costs for services including front desk services, medical services and facilities such as swimming pools and mini theaters.

Management company (buying and selling) -管理会社（売買） Kanri gaisya (Baibai)

A company that engages in real estate management work outsourced by the owner of a real estate property. The business includes the maintenance and inspection of common areas and equipment, accounting for cleaning service and management fees, planning and implementing of long-term repair plans, arrangements of management rules and detailed regulations as rules for living in a community and resolving problems.

Management method -管理方式 Kanri hoshiki

Management methods refer to methods of managing a condominium, and are categorized by form of janitor activity. There are four main methods, as follows: (1) 24H on-site management (a live-in janitor works on the premises), (2) day shift management (a janitor commutes to the premises to work every day), (3) patrol management (a janitor patrols on a regular basis, for example, patrolling three times per week on trash collection days), and (4) self-management by residents (no janitor is assigned to the premises, and for example, a part-time worker is hired instead to clean the premises).   *Similar methods exist for rental properties.

Building certification application form -建築確認申請書 Kenchiku kakunin shinseisho

To newly build, extend, rebuild or transfer a building that requires certification application under Article 6 of the Building Standards Act, the building owner must submit a “building certification application form” to the construction surveyor at the specified administrative agency that has jurisdiction over the construction site or a designated confirmation and inspection agency and then receive a “building confirmation certificate (confirmed certificate)” before starting the construction so that the construction plan can be checked beforehand for its compliance with related laws and regulations such as the Building Standards Act. Depending on the property for which applications are made, materials such as the construction plan summary, plot plans, floor plans, and structural calculation sheets are required to be attached to the application form, and such complicated procedures are usually carried out by architects, etc., on behalf of the building owner. Without receiving a building confirmation certificate, the construction will violate the law, and housing loans provided by the Government Housing Loan Corporation or private banks cannot be used. Even if a building confirmation certificate is received, the construction of a building differing from the plans and documents submitted for application will also violate the law.

Building confirmation certificate (confirmed certificate)
-建築確認証（確認済証） Kenchiku kakuninsho (Kakuninzumisho)

Applications for building certification are made with the original and duplicate copy of the “building certification application form” and attached materials such as the construction plan summary, plot plans, floor plans, and structural calculation sheets. If applications comply with related laws and regulations such as the Building Standards Act, the duplicate copy will be returned to the applicant as a notice of confirmation, which is called a “building confirmation certificate (confirmed certificate).” The certificate will be necessary for starting the construction, storage registration, and extension of the building, so it should be retained as an important document.

Building certification -建築確認 Kenchiku kakunin

To newly build, extend, rebuild or transfer a building that requires certification application under Article 6 of the Building Standards Act, the building owner must submit the original and duplicate copy of a “building certification application form” to the construction surveyor at the specified administrative agency that has jurisdiction over the construction site or a designated confirmation and inspection agency and then receive the duplicate copy as a “building confirmation certificate (confirmed certificate)” before starting the construction so that the construction plan can be checked beforehand for its compliance with related laws and regulations such as the Building Standards Act. Materials such as the construction plan summary, plot plans, floor plans, and structural calculation sheets are required to be attached to the application form, but the requirements differ depending on the property, so such complicated procedures are usually carried out by architects, etc., on behalf of the building owner. Without receiving a building confirmation certificate, the construction will violate the law, and housing loans provided by the Government Housing Loan Corporation or private banks cannot be used. Even if a building confirmation certificate is received, the construction of a building differing from the plans and documents submitted for application will also violate the law. The building confirmation certificate will be necessary for starting the construction, storage registration, and extension of the building, so it should be retained as an important document.

Certificate of completion -検査済証 Kensazumisho

When a construction is completed for a building requiring building certification, the building owner needs to make notification to the construction surveyor or a designated confirmation and inspection agency and receive an investigation for completion. As a result of the investigation, if the construction is confirmed to have been conducted as provided in the building certification application, a certificate of completion is issued. This certificate will be used to prepare a document of important matters for the buying and selling, etc., of properties and thus should be kept securely. If the certificate of completion is lost, it cannot be reissued, however, if matters related to the issuance of the certificate of completion is listed on the building certification register, a “certificate of registered matters on the building certification register” can be obtained. For many buildings constructed before the measures taken by the Ministry of Land, Infrastructure, Transport and Tourism to improve acquisition rates of the certificate of completion, the certificate of completion was not issued. Therefore, in July 2014, with the aim to make effective use of existing building stock and facilitate real estate transactions, the Ministry of Land, Infrastructure, Transport and Tourism announced a guideline showing methods to survey the compliance with the Building Standards Act of buildings without certificates of completion by utilizing designated confirmation and inspection agencies.

Building Standards Act compliance survey -建築基準法適合調査 Kenchiku kijunho tekigo chosa

A survey conducted for existing buildings’ compliance with the Building Standards Act based on the “Guideline on Building Standards Act Compliance Survey Utilizing Designated Confirmation and Inspection Agencies for Buildings without Certificate of Completion,” announced by the Ministry of Land, Infrastructure, Transport and Tourism on July 2, 2014. Through such survey, existing buildings can be confirmed to be unqualified buildings instead of illegal buildings, facilitating extensions and renovations as well as changes in the use of buildings without a certificate of completion.

Certificate of registered matters on the building certification register
-建築確認台帳記載事項証明書 Kenchiku kakunin daicho kisai jiko shomeisho

A certificate that is issued when the building confirmation certificate or the certificate of completion (both certificates cannot be reissued) is required as an attached document for various procedures such as to register descriptions of buildings and refinancing of bank loans, but such certificate is lost. Of the matters registered on the building certification register, the parcel name and number, main usage, total floor area, confirmation number, confirmation date, registered number of the certificate of completion, and issue date of the certificate of completion are provided in this certificate.

Construction plan summary -建築計画概要書 Kenchiku keikaku gaiyo

A document to be submitted when applying for building certification, including details of the building owner, architect, construction supervisor, name and address of the constructor, parcel number of the construction site, site area, building outline including its area, structure, height, and number of floors, guide map and plot plan. Anyone can inspect the summary if applications are made, and through such inspection system, nearby residents can confirm whether the building to be constructed in their neighborhood is not an illegal building, and also how will their own site and building be affected by the construction of the building.

Home inspection -住宅診断（ホームインスペクション） Jutaku shindan

Specialized work of a home inspector to provide advices from a third-party and expert perspective considering the deterioration status of the housing, defects, places to be repaired and the timing of repairs, and rough amount of repair expenses, etc. Results of such inspection can be used to make judgements on whether to purchase used housing. Home inspections are mainly conducted by visual inspection as primary inspections, and if defects are found, further detailed inspections such as earthquake resistance testing are to be carried out.

Earthquake resistance testing -耐震診断 Taishin shindan

To numerically grasp the level of damage a building shall receive, through calculation of its seismic performance against earthquakes that can occur in the future, by examining the strength of the structure of an existing building. In the “Act on Promotion of Seismic Retrofitting of Buildings” enforced on December 25, 1995, buildings that do not meet the current new earthquake resistance standards are encouraged to receive earthquake resistance testing and be repaired. When selling old properties that were built before the introduction of the new earthquake resistance standards, earthquake resistance testing reports, etc., are required to be submitted in some cases.

Earthquake resistance standard certification of compliance -耐震基準適合証明書 Taishin kijun tekigo shomeisho

A document in which licensed architects, etc., certify that an existing building meets the current new earthquake resistance standards. When the result of an earthquake resistance testing requires reinforcement work for the building, after the work is completed, an earthquake resistance standard certification of compliance will be issued. If an earthquake resistance standard certification of compliance is issued in the name of the seller before the transfer of the ownership (delivery) of the property, the buyer acquiring the property with such certification enjoys the benefits of 1) housing loan deductions up to \4 million in 10 years; 2) reduction of registration and license tax when buying a used house; 3) reduction of real estate acquisition tax when buying a used house; 4) fixed asset tax being halved; and 5) premiums of the earthquake insurance being discounted by 10%.

Housing performance assessment reports -住宅性能評価書 Jutaku seino hyokasho

The housing performance marking program was established to display and evaluate the performance of housing based on a uniform standard in accordance with laws. The program enables non-experts to compare various properties without bias, and comparisons and considerations for purchasing a property have become much easier. Based on this program, housing performance assessment reports are issued, and assessments are made for the stability of the structure, safety during fire-related incidents, reduced deterioration, consideration for maintenance and management as well as renovation, consideration for the environment including heat, air, noise, lights, consideration for elderly persons, and measures for crime prevention. Properties with a housing performance assessment report enjoy the benefits including high reliability due to fair inspections conducted by third party assessment organizations registered in Japan, the response by designated housing dispute settlement organizations in case of problems, and becoming eligible for preferential terms for housing loans and discounts on earthquake insurance premiums.

Renting

Important Matters -重要事項説明 Jyuyojiko setsumei

It is required by law for a Real Estate Transaction Specialist to explain the name of a building, location, lessor, contract details (such as amounts of rent and prohibited matters) and other important information using a Document of Important Matters before concluding a contract. By agreeing to the document and signing and sealing, the lessee will proceed to conclude a contract.

Shikikin (Deposits) -敷金 Shikikin

A fee deposited to the lesser as security in case of non-payment of rent, the fee to be paid by the lessee when cancelling a contract (fee for obligation of restitutio in integrum, and so forth) and other occasions. Shikikin will be adjusted by deducting the actual fee at the time of departure, and the remaining money will be returned to the lessee. Shikikin usually equals around one to three months’ rent when renting a house.

Reikin (Key money) -礼金 Reikin

A fee paid to the lesser as a gift when concluding a contract. Reikin will not be returned at the time of cancellation or termination of a contract. The system of reikin differs from region to region and may not be necessary. In the Tokyo area, reikin usually equals around one to two months’ rent.

Common service fee/management fee -共益費/管理費 Kyoeki-hi/Kanri-hi

Expenses paid in addition to rent for the management and maintenance of common areas such as corridors of apartment buildings. Fees will be used for the electricity bill, cleaning, and others for common spaces.

Renewal commision -更新手数料 Koshin tesuryo

A commission paid to an agent when renewing a contract through a real estate agent. Generally, the fee will be around the same as half a month’s rent. Some agents may not require such commission. Renewal fees and renewal commissions are considered separately.

Renewal fee -更新料 Koshinryo

A common practice in lease contracts where a one-off payment is paid to the lesser when renewing a contract. Generally, the fee will be around the same as one month’s rent. Renewal fees and renewal commissions are considered separately.

Confirmation of current condition -現況確認 Genkyo kakunin

To confirm the current condition of the property such as stains, dents, scratches on walls and floors, and the status of equipment and water supply and drainage. The condition will be recorded on the document for confirmation of current condition and the document will be reference material for restoring the property to its original state when vacating said property.

Obligation of restitutio in integrum -原状回復義務 Genjo kaihuku gimu

An obligation to restore any changes made by the lessee to a rented property to its original condition at the time of cancellation or termination of a contract. It does not consider whether the changes were through negligence or intent. The restoration will be covered by shikikin (deposit) or guarantee money, or paid according to the actual price. Deterioration from ordinary use does not correspond to this obligation.

Guarantee money -保証金 Hoshokin

Rough synonym for shikikin. Guarantee money will be appropriated for delinquency in payment of rent or for repairing a damaged room, and will be returned at the time of departure after deducting the appropriated amount when cancelling a contract.

Amortization -償却 Shokyaku

For deposits such as shikikin for rental homes and guarantee money for rental shops, amortization refers to the amount of money that will not be returned to the lessee at the time of cancellation or termination of the contract.

Guarantor company -保証会社 Hosho gaisha

A company that will act as a joint guarantor for rent obligations. Some of the property allows the tenant to receive favorable treatment for reikin (key money) and shikikin by subscribing to a guarantor company. Many of the guarantor companies nowadays also offer a wide variety of peripheral services.

Management company -管理会社 Kanri gaisha

A company that takes charge of maintenance and operation of buildings. Management companies conduct a variety of businesses including collecting rent from residents, paying fees necessary for the maintenance of buildings, inspecting and maintaining common equipment, conducting measures to prevent fire and security activities, seeking new tenants for vacant rooms, and planning large-scale repairs for buildings.

Tenant screening -入居審査 Nyukyo shinsa

As a general rule before a contract, application forms and required documents will be submitted to the lesser and the tenant will be evaluated for stable solvency, the risk of disrupting public morals and other factors.

Gensen choshu hyo (Income tax withholding slip) -源泉徴収票 Gensen choshu hyo

A form that states one’s salary. In real estate leasing, gensen choshu hyo will verify that a person has the ability to pay the monthly rent.

Insurance -保証 Hosho

Insurance will compensate for household goods in case of fire and other disasters. The lessee must purchase insurance when he/she moves in.

Free rent -フリーレント Free rent

A condition in which rent will be free for a certain period of time.

Replacement of keys -鍵交換 Kagi koukan

The act of renewing a lock cylinder after the departure of a former resident when a new tenant is found.

Condominium leasing -分譲賃貸 Bunjo chintai

A condominium leasing property is a unit of a condominium purchased by a landlord who leases the unit to others. A lessee may then live in a condominium by renting the unit.

Tenant liability insurance -借家人賠償保険 Syakkanin baisyo hoken

When a tenant of a rental property causes damage to the property (room) due to reasons such as an accident and becomes legally liable for compensation of the damage, the tenant is required to pay compensation for the damage. This is an insurance that covers such damage compensation.

General right of lease -普通賃借権 Ftsu chinsyakuken

A right of lease that allows a contract renewal. The lessor cannot reject a contract renewal request from the tenant without justifiable grounds.

Fixed-term right of lease -定期賃借権 Teiki chinsyakuken

A right of lease whereby the lease relationship terminates at the expiration of the lease term under the contract.

Daily rent -日割り家賃 Hiwari yachin

A rent amount for the month in which the tenant has moved into a lease property on a date other than the beginning of the month. The rent amount per day is calculated by dividing the monthly rent amount with the number of days of such month. For some properties, daily rent is also applied to the month in which the tenant moves out. For details of the calculation and application, matters mentioned in the contract need to be carefully reviewed.

Land rights

Right to use the grounds -敷地利用権 Shikichi riyoken

For condominium units owned by multiple persons, the “right to use the grounds” is the right for the unit owner related to the land on which the building is situated (commonly owned land).

Right of site -敷地権 Shikichiken

For a detached house, land is registered separately from the building as an independent property. On the other hand, for a condominium unit, the right to use the grounds is registered attached to the condominium unit, and thus the unit owner is not allowed to dispose the right to use the grounds separately from the exclusive element. The right to use the grounds attached to the condominium unit is called the right of site.

Ownership -所有権 Shoyuken

The ownership is a right to own the commonly owned land in accordance with the ratio of the exclusive element of a building. Usually, when you buy a condominium unit, you will gain an ownership of the condominium unit and an ownership of the land.

Superficies -地上権 Chijoken

While the right of lease is a “claim,” the superficies is a “real right.” The lessee (holder of the superficies) can sell or lease the property to a third party without the consent of land owner.

Right of lease -賃借権 Chinshakuken

The right of lease is not as strong as the superficies. In case of buying, selling and leasing a property, consent of land owner and a consent fee (transfer fee) will be required.

General land lease right -普通借地権 Futsu shakuchiken

In 1992, the Act on Land and Building Leases regulating lease contracts in Japan was revised. With the revision, the land lease right was classified into a “fixed term land lease right,” under which the lease contract is not renewable and a “general land lease right,” under which the lease contract is renewable. The duration of general land lease right is 30 years regardless of the type of buildings. The renewal period is 20 years for the first renewal and 10 years from the second renewal onward. The duration may be decided between the concerned parties.

Former land lease right -旧法借地権 Kyuho shakuchiken

For land lease rights established before the 1992 revision of the Act on Land and Building Leases, the former Act is applied. The land lease right based on the Act on Land and Building Leases before the revision is called the “former land lease right.” In the former Act, the duration of land lease right is at least 20 years for non-solid structures such as wooden buildings (30 years if the duration is not specified), and at least 30 years for solid structures such as apartment buildings (60 years if the duration is not specified). The lease contract is renewable.

General superficies -普通地上権 Futsu chijoken

Of general land lease rights, a right which is classified as a “superficies.”

General right of lease -普通賃借権 Futsu chinshakuken

Of general land lease rights, a right which is classified as a “right of lease.”

Former superficies right -旧法地上権 Kyuho chijoken

Of former land lease rights, a right which is classified as a “superficies.”

Former right of lease -旧法賃借権 Kyuho chinshakuken

Of former land lease rights, a right which is classified as a “right of lease.”

City planning areas & Use districts

Urbanization promotion areas -市街化区域 Shigaika kuiki

Of city planning areas, urbanization promotion areas are areas to be developed actively as urban districts. Use districts shall be designated for the areas and roads, parks and sewerage systems shall be developed for promoting planned urbanization with residence, shops and factories.

Urbanization control areas -市街化調整区域 Shigaika chosei kuiki

Of city planning areas, urbanization control areas are areas where development and constructions are restricted in order to control urbanization and to protect natural environment.

Category 1 low-rise exclusive residential districts -第一種低層住居専用地域　Dai-isshu teisojukyo sennyou chiiki

Category 1 low-rise exclusive residential districts are residential districts designated to conserve a favorable dwelling environment for low-rise housing with two to three stories or less. Small-scale shops, residences with offices, elementary schools and junior high schools are allowed to be built within the district.

Category 1 medium-to-high-rise exclusive residential districts
-第一種中高層住居専用地域 Dai-isshu chukosojukyo sennyou chiiki

Category 1 medium-to-high-rise exclusive residential districts are residential districts designated to conserve a favorable dwelling environment for medium-to-high-rise housing. Buildings allowed to be built within this district include medium-to-high-rise apartment buildings with four stories or more, restaurants and shops with two stories or less and floor area of 500 m2 or less, universities, and hospitals. Amusement facilities such as golf driving ranges and pachinko parlors as well as accommodation facilities such as hotels are not allowed to be built within this district.

Category 1 residential districts -第一種住居地域 Dai-isshu jukyo chiiki

Category 1 residential districts are districts designated to conserve a dwelling environment by restricting the construction of large-scale shops, office buildings and others. Restaurants, shops and offices may be built regardless of the number of stories as long as the floor area is 3,000 m2 or less. Bowling alleys, golf driving ranges, hotels and inns may also be built within the district. Amusement facilities such as pachinko parlors and karaoke shops are not allowed to be built regardless of the building scale.

Neighborhood commercial districts -近隣商業地域 Kinrin shogyo chiiki

Neighborhood commercial districts are districts designated to conduct commercial business with a main purpose of providing daily necessities to neighboring residents. Districts cover local shopping districts. Apartment buildings, commercial and office buildings may coexist in this district. In addition to residences, shops, hotels, pachinko parlors and karaoke shops, movie theaters, parking buildings, warehouses and small-scale factories may also be built within the district.

Commercial districts -商業地域 Shogyo chiiki

Commercial districts are districts designated primarily to promote the convenience to conduct commercial business such as shops and offices. Commercial districts are the only use districts where the construction of almost all commercial facilities, offices, residences, shops, hotels, pachinko parlors and karaoke shops is permitted. High-rise buildings may also be built.

Fire prevention district -防火 Bouka

A district specified in the City Planning Act so as to prevent fire incidents in urban areas and minimize damage from such incidents. For such purposes, concrete regulations are formulated for this district. In a district designated as a fire prevention district, buildings must, in principle be constructed as fireproof buildings, according to scale.

Quasi-fire prevention district -準防火 Jun Bouka

A district equivalent to a fire prevention district (mainly located exterior to fire prevention districts). As with fire prevention districts, buildings in a district designated as a quasi-fire prevention district must, in principle be constructed as quasi-fireproof buildings (under more moderate regulations, compared to a fire prevention district), according to scale.

Height control district -高度 Kodo

A district where the minimum and maximum heights of buildings are determined, which is one of the “districts and zones” prescribed in Article 8 of the City Planning Act.

High-level use district -高度利用 Kodo riyou

A district designated for the purpose of rational and high-level land usage, where high-rise buildings are scheduled to be constructed, which is one of the “districts and zones” prescribed in Article 8 of the City Planning Act. The minimum and maximum floor area ratio and the maximum building coverage ratio are determined for this district.

Scenic district -風致 Fuchi

A district specified in the City Planning Act so as to maintain natural landscape (scenic beauty) in cities and to preserve the urban environment, which is one of the “districts and zones” prescribed in Article 8 of the City Planning Act. In a district designated as a scenic district, construction and deforestation activities are subject to certain limitations.

Educational district -文教 Bunkyo

A district where schools, laboratories, libraries, art museums, museums, and other educational and research facilities, as well as cultural facilities are concentrated, which is one of the special use districts prescribed in the City Planning Act. In a district designated as an educational district, construction and operation of some types of business facilities and stores are subject to prohibitions and limitations.

Room layout -間取り Madori

Room layouts of real estate properties in Japan are normally expressed in the form of combinations of numbers and alphabets, such as “2LDK.”

The following are the explanations of typical words related to room layouts.

 

L

Living room

D

Dining room

K

Kitchen

DK

Combined space for dining and kitchen

LDK

Combined space for living, dining and kitchen. LDK is similar to, but larger than DK for its additional space that can be used as a living room.

1R

Referred to as “one room,” this room layout has only one room with direct access to the kitchen.

CL

A closet, which is a storage space in a room.

WIC or WCL

An abbreviation for walk-in closet, which is a storage space with a larger area than a closet.

S

The S stands for “service room” and indicates a small area generally used as a storeroom, etc. The size may be large enough for a spare room although this space is not legally defined as a room due to its lighting and ventilation, etc.

Loft

When the ceiling is heightened and a particular space of the room is divided into two levels, the upper level of the space is referred to as a loft.

Utility (UT)

A space for housework such as laundry and ironing, with the access to the kitchen and bathroom. Cupboards, pantry, etc. may be placed in the utility.

Balcony

A structure made of a floor and handrail projecting from the outside wall of a building without roof or ceiling is called a “balcony.”

Veranda

A structure made of a floor and handrail projecting from the outside wall of a building with a roof, eaves, space under eaves, etc. is called a “veranda.”

Terrace

A space similar to a balcony located on the first floor.

UB

A unit bath, which means a bathroom formed by integrating the floor, wall, ceiling, etc. with plastic impervious to water. There are a type combining the bathroom and washbasin and a type combining the bathroom, washbasin and toilet.

PS

A pipe space for pipes for water, sewage, gas, etc.

MB

A meter box where the meters of electricity, gas, water, etc. are stored.

Jo -畳

A unit indicating the size of a room by the number of tatami mats. One jo, equivalent to one tatami mat, is about 1.62 square meters.

Tsubo -坪

A unit for area used in the shaku-kan system, an old Japanese system of weights and measures. One tsubo is about 3.3 square meters, which is equal to the area of two tatami mats.

Exclusive floor area -専有部 Sennyu bu

Refers to the space that the tenant can privately use other than the common area in a collective housing such as a condominium called “mansion” in Japan. The balcony is treated as the common area and thus in not included in the exclusive floor area. The area of the loft is also excluded from the floor area and therefore is not included in the exclusive floor area and is separately presented.

Structures & Facilities

RC Structure/SRC Structure -RC造/SRC造 RC zo / SRC zo

Reinforced Concrete Structure/Steel Reinforced Concrete Structure. An RC Structure combines iron reinforcing bars, which are resistant to stretching forces, and concrete, which is compression resistant. Floors, walls and pillars are integrated in an RC Structure and usually have higher sound insulation properties compared to wooden and steel frame structures. An SRC Structure is a building structure that combines the RC and steel frame structures. As an SRC Structure can have a high intensity with small sections, it can provide a lighter building.

Damping/Antiseismic/Seismically isolated structure -制振/耐震/免震構造 Seishin/Menshin/Taishin kozo

A damping structure is a building structure that absorbs vibrations that are caused by earthquakes and wind with dampers attached to the frame of a building. An antiseismic structure is a building structure designed to resist the energy of an earthquake by solidifying the building itself through strengthening of walls, pillars and beams. A seismically isolated structure is a building structure designed to eliminate the direct impact of an earthquake in order to prevent buildings from shaking and collapsing because of earthquakes.

Delivery Box -宅配ボックス Takuhai box

A locker-like piece of equipment in apartment buildings where residents can receive packages delivered when they were away by temporarily keeping the packages in the delivery box. A deliveryman can leave the package in the delivery box, leave the delivery notice in the mailbox of the destination, and then the returning resident can receive the package from a designated locker. The delivery box is usually installed at the entrance or near collective mailboxes.

Electronic bidets -温水洗浄便座 Onsui senjo benza

A toilet seat with a warm water spray feature. Some may have features such as a heating element that blows warm air to dry after washing and heated seats. Although known as a Washlet or Shower Toilet, these are registered trademarks.

Reheating -追い焚き機能 Oidaki kino

A feature that enables the reheating of hot water in the bathtub. It is a convenient feature for larger families as the water can be reheated when it gets cold.

All-electric -オール電化 All denka

A system where all the energy-related equipment in a house uses electricity. For example, instead of a gas stove, induction cookers are used and instead of gas water heaters, electric water heaters are used. All-electric systems are gaining popularity as using electricity in well insulated houses is considered cleaner and safer than using gas.

Common area -共用部分 Kyoyo bubun

A space or equipment other than an exclusive floor area in apartment buildings. The common area includes the entrance, elevators, corridors and stairs, which are used by all residents on a daily basis, as well as the verandas and balconies of each block, which will be used as an evacuation route in case of emergency.

Bathroom dryer -浴室乾燥機 Yokushitsu kanso ki

A ventilation fan in a bathroom that features functions such as drying and heating, and is powered by either electricity or gas. Such a fan produces air heated to 40 to 55 degrees, to dry the both bathroom and clothing hung inside, and to preheat the bathroom.

Floor heating -床暖房 Yuka danbo

A heating system that heats a room using heating elements located beneath the floor. There are two basic methods of generating heat: a hot water heating method that employs circulating hot water, and an electric heating method that employs electric heating elements.

Storage room (Trunk room) -トランクルーム Trunk room

A storage room (trunk room) is a storage shed installed at common areas of apartments, next to the front door of units, in a basement or separate building, or at other locations. Such rooms are ideal for storing possessions that tenants prefer not to bring inside of units, such as golf bags and ski equipment.

Barrier-free -バリアフリー Barrier-free

As a general term, “barrier-free” refers to a state in which the barriers that could obstruct the everyday movements of persons with handicaps, such as the elderly and disabled people, have been removed. In terms of housing, barrier-free housing resolves physical obstacles by removing level differences on floors and at doors, installing handrails for stairs, widening corridor widths, renovating bathrooms to have more space and handrails, and installing home elevators.

Others

Home Appliance Recycling Law -家電リサイクル法 Kaden recycle ho

Law for the Recycling of Specified Kinds of Home Appliances. A law requiring specific home appliances to be recycled. When disposing of such home appliances, a request for collection has to be made to an authorized operator or shop. Fees for collection or recycling are set depending on the product and manufacturers, and the person disposing of the appliance must pay for such fees.

B&B -民泊 Minpaku

Accommodation offered by a private home. B&B is not subject to the regulations of the Inns and Hotels Act, as receiving a gift (accommodation charge) as a consideration for providing accommodation from someone who just happens to be looking for a place to sleep does not equate to an act of doing business. This applies as long as the receiving of an accommodation charge is not institutionalized. B&B business is gaining attention with the rise of Airbnb (a matching service where someone looking for accommodation and hosts who provide rooms are matched) and due to the lack of accommodation facilities in Japan, where inbound customers are increasing. However, as there is a high probability of disputes such as non-payment of accommodation charges and complaints from neighbors, laws and regulations are being reviewed.

Room share/Shared house -ルームシェア/シェアハウス Room share/Share house

Living together with people other than family by jointly renting one house, or a property for such purpose. Generally, the kitchen, living room and bathroom will be shared and individual rooms will be used as private space. One of the benefits is that a person can live in a larger house with lower rent. If the property is not meant to be shared, approval must be obtained from the lesser beforehand.

MEMS -MEMS MEMS

Mansion Energy Management System. An energy management system that measures and accumulates energy consumption such as electricity within a communal building along with functions to control connected devices for air conditioning and lighting or to control energy at peak demand times. The system is expected to develop as a mechanism to promote domestic or intramural energy saving and to save on power expenses.

Terrace house -テラスハウス Terrace house

A style of housing where multiple buildings share side walls. Each house has its own backyard and terrace. Also called a row house.

Subsidized high-grade rental apartment -特定優良賃貸住宅 Tokutei Yuryo Chintai Jutaku

High-grade rental housing built by private landowners with funds financed through government and local government grants and the Japan Housing Finance Agency. Both the national government and local governments lease such housing, while providing rent subsidies to its residents.

Public road -公衆用道路 Koshuyo doro

A road used for general traffic, whether or not it is a road provided by the Road Act. It is defined in the Real Property Registration Act and is one of the land categories stated in the land registration record.

Parcel subdivision and parcel consolidation -分筆・合筆 Bumpitsu・Gohitsu

Parcel subdivision refers to subdividing one parcel of land into multiple parcels, while parcel consolidation refers to consolidating multiple parcels of land into one parcel. Applications for parcel subdivision usually require the attachments of the parcel boundary confirmation and the parcel area survey drawing of the land after parcel subdivision.

 

Services