Why Using a Guarantor Company Can Make it Easier for You to Sign a Housing Lease Japan
When you want to live in Japan and you’re from abroad, the most difficult thing when finding an apartment in Japan is finding a guarantor. This is where a “guarantor company” comes in handy. JAPANBOX has compiled a list of guarantor companies that can make your rental contract go more smoothly. Knowing this information will be useful when renting a place in Japan.
What is a “guarantor company” that foreigners can use for rental contracts when living in Japan?
A “guarantor company” is a company that provides a joint guarantee for tenants.
If the contractor fails to pay the rent on time, the company will be able to make a replacement payment (subrogation) to the landlord according to the contract.
If you are planning to find an apartment for rent in Japan, please know that you can use a guarantor company to sign a rental contract even if you do not have a joint guarantor.
Effect on the rental contract
A joint guarantor is an essential part of a rental contract in Japan.
However, it can be a very difficult problem for a foreigner to find a valid guarantor in Japan.
Even if you could find someone, that person may not be accepted as a guarantor due to his or her situation.
In this regard, a guarantor company will jointly guarantee the tenant as a “company”.
In other words, regardless of the tenant’s situation, the credibility of the guarantor company alone can give the landlord peace of mind.
This has the advantage of making it easier to pass the tenant screening process.
The criteria for selecting a company is that it must be registered with the Ministry of Land, Infrastructure, Transport and Tourism
The use of a guarantor company to jointly guarantee a rental contract in Japan is a system that is recognized by the government.
However, the number of guarantor companies themselves is increasing every year, and not all of them are necessarily safe.
Therefore, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has established a registration system for the purpose of “proper business of rent debt guarantee”.
When choosing a guarantor company, be sure to select a company registered as a “rent debt guarantee company” that meets the standards set by the government.
Differences in guarantor companies available for rental contracts in Japan
Among the registered companies, there are several types of guarantor companies, and they are not all the same.
The associations they belong to are different, and due to differences in screening standards, some companies are easier for foreigners to pass the screening process than others.
There are also differences in the services offered after signing a contract with each Japanese guarantor company, so be sure to choose the one that best suits your situation.
Consumer credit companies
These are guarantor companies run by credit card companies such as Orient Corporation, Jax, and Epos. Since they are subject to financial screening (credit card issuing standards), the screening standards are more stringent among the guarantor companies.
Credit system
These are companies that are members of associations such as the Japan Property Management Association (JPM), the LICC, and the LDC.
The shared database of the member associations is used for screening, but the screening process is relatively lenient, even for foreigners. Some companies have their own tie-ups with public support networks.
Independent
These are companies that are not members of any industry association or organization.
The screening process is based on the company’s own database, making it easy for foreigners to use.
Smaller companies could have more problems after signing a contract, so choosing a company that is as large as possible is a good idea.
About the contract details of the guarantee company
It is important to know about the specific contract details of the guarantor company that can be used for rental contracts in Japan.
- ・How much do you need to pay?
- ・What do you need for the contract?
Let’s take a look at these two points of concern.
Guarantor Company Fees
The fee for using a guarantor company ranges from 30% to 100% of the monthly rent (one month’s rent, common service fee, and parking fee combined).
For example, if the rent is 50,000 yen and the common service fee is 3,000 yen, the percentage will be applied to the total amount of 53,000 yen.
You will also need to pay an annual renewal fee of 10% to 100% of the monthly rent, or a flat fee of about 10,000 yen.
What you need for a guarantor contract
In addition to the guarantee fee, the following items are required when a foreigner uses a guarantor company.
- ・Health insurance card
- ・Driver’s license
- ・Residence card
- ・Passport
- ・Student ID card for international students
- ・Proof of income (proof of income, pay stub, etc.)
- ・A copy of your bankbook
Most of these items are also required for the rental contract, but you will also need proof of your status of residence and a seal of approval.
You will also need to provide an “emergency contact person” in Japan whom you can contact in case something happens.
Multilingual guarantor companies
Even if you don’t speak Japanese, there are some companies that can help you in a wide range of languages such as English, Chinese, and Tagalog.
Using a guarantor company will give you an advantage in the screening process for the property you want to rent in Japan.
There are also companies that can translate rental contracts written in Japanese, making the process of signing a rental contract itself smoother.
There are also companies that provide services that make it easier for foreign residents to use a guarantor company.
You can be screened before coming to Japan
Some guarantor companies allow you to be screened before you come to Japan.
Not only people who want to live in Japan, but also foreigners who want to start a business can consult with them about any concerns they may have before coming to Japan.
It’s convenient to use a guarantor company for your Japanese rental contract!
The problem of a “joint guarantor”, the most difficult obstacle in signing a rental contract in Japan, can be cleared by using a guarantor company.
There are also companies that provide excellent support for foreign residents after they move in.
This is a convenient system that you should know about so that when you find a place you like in Japan, completing the rental contract can go smoothly and you can move in quickly.
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