Types of Rental Negotiations

Have you asked for negotiations when applying for rent?

When we manage the building, we may be asked to negotiate the conditions when receiving an application for moving in. Today, we will explain what kind of negotiations are going on, what parts of negotiations are passing, and what parts are difficult to accept.

Acceptance of negotiations depends on agreement between both Lessor and Lessee.

First of all, the lease contract is concluded with the agreement of both the lessor and the lessee. It is not possible to conclude a contract based on only one request. Therefore, the fact that the negotiations on the conditions settle down is also a condition for the agreement of both lessor and lessee. In addition, the conclusion of the conditions is greatly related to supply and demand. For example, if many people want to rent the room, the demand will increase, and the lessor side can conclude the contract on favorable terms. On the other hand, when there are many suppliers on the off-season, it becomes possible for the lessee to freely choose the property, and it is possible to conclude a lease contract with more favorable terms for the lessee.

What conditions are subject to negotiation?

As mentioned above, the contract conditions fluctuate depending on supply and demand. For example, if the building is new and many people want to rent it, the rent will be high, and there are many cases where the condition of Key Money, which is a Japanese custom, is added. Or if there are no key money in the off season throughout the year, for example, if you sign a contract in the middle of the month, you will get free rent for fractional days less than 1 month.

Whether the negotiation is successful or not, the following conditions are subject to negotiation.
- rent
- key money
- Contract date (the standard payment date for rent, which usually occurs within one month from the application, is moved slightly backward)
- Rent date (Contracts are signed on a regular schedule and the rent date is moved slightly behind)
- Renewal fee

However, the conditions below are unlikely or impossible to negotiate.
- Maintenance fee
​-Fire insurance
-Guarantee company fee
-Agency fee
-Contract renewal fee
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For example, a maintenance fee is an expense required to maintain and manage the entire building, and is also required to operate the building. It is also necessary to take out fire insurance, as it will compensate for damage caused by a fire or accidental fire from your neighbors. It may be possible to remove the use of a guarantor company, but it is a necessary procedure for the lessor to receive the rent under the current Lease and Lease Law, such as adding a security deposit and requiring a guarantor.

About the effectiveness of negotiation

For example, let's say you verbally ask an agent to negotiate terms with the landlord, and sign a lease contract if the terms are met. If so, will the verbal convention become a contract item? Is it just a promise, do I have to keep it before I sign?
​​Under Japanese civil law, a contract is considered to be formed by the agreement between the applicant and the approver. Therefore, as a general rule, a verbal agreement will also be sufficient and effective to complete the agreement. This is called a consent contract, and sales contracts and lease contracts correspond to this. However, there are some contracts that can only be concluded in writing, which is called a formal contract. In the case above, you negotiated the conditions on the premise of agreement, so if the owner accepts the content and if the agreement of the conditions is obtained, it becomes an oral agreement and the contract is actually valid.

The negotiation is win-win for both parties

Living in different cultures, customs, and languages often lead to different communication and ways of thinking. It is possible to comply with the law, but it is the best negotiation to collect the requests of both parties before each other, and each of them will be able to conclude the contract comfortably. There are many opportunities to expand from one relationship. Let's proceed so that each one can live a happy and pleasant environment.