Flat Hunting

Posted on 2005/11/25 04:49:47 (November 2005).

[Wednesday 23rd November]
Today was a national holiday in Japan. I'd thought originally Chie still had to go to work, so I'd decided I might just as well go into the office also... but then it turned out actually she was off after all, so in the end we did both have the day off.

Most of the day was taken up with looking for an appartment. We went to a different estate agents this time, in a slightly different area, and they seemed to have a lot more suitable places for us. We went to look at three, and we both seemed to get a good feeling about one of the places, so have filled in the application forms and so on. Apparently the background checks are quite stringent, so there is a good chance we might not be accepted, but we can always find somewhere else if that turns out to be the case.

Renting an appartment is an expensive business in Japan. In Tokyo, the rent itself is more or less on a par with London - albeit that places are generally much smaller. Where you really get stung however is in all the upfront costs. In addition to a deposit, many Japanese landlords somehow feel they have the right to also ask for an entirely non-refundable fee known as "reikin". This is often equivalent to two months rent. I can't see any justification for this at all - you're just handing your landlord a huge wadge of cash which you don't get anything for in return, and will never see again - just for the privilege of moving into their shoebox appartment.

Typically you will need the equivalent of six months rent to move into a place, and at least half of that is pure fees - money that does not go towards your actual rent, and isn't refundable either. A common pattern is two months deposit, two months reikin, one month agency fees and then your first month's rent. For a typical very modest appartment you're looking at about 600 pounds (1000 dollars) a month. So to move in you will need 3600 pounds (6000 dollars) up front. At least 1800 pounds (3000 dollars) of that is just fees!

To start with people were saying "well, that's just Japanese culture, you're going to have to accept it". Actually, this may not be the case.

It turns out some properties don't have a reikin - some new properties for example, and also some properties are covered by a kind of government scheme which means the landlords are not allowed to charge one. Also places that the landlord is struggling to get a new tenant for will often be subject to negotiation - a landlord hates nothing more than an empty property, and reducing the reikin is an obvious step to make this more attractive to a tenant. What they want at the end of the day is someone paying the rent regularly, and if people would just refuse to pay the reikin, the landlords would be forced to at least reduce it, if not drop it altogether.

If you are persistent with your estate agent, and willing to shop around, they will manage to find you a handful of zero reikin places. I couldn't see any marked difference between these and those that did require a reikin. Some had slightly higher rents to offset the lack of reikin, but this wasn't always the case.

So the place we have applied for is zero reikin, and the rent is quite reasonable too. If that falls through for some reason, I am confident we'll be able to find another without having to be subject to this daylight robbery.

If other people want to "just accept" this rather crazy aspect of Japanese culture, and throw away a couple of thousand dollars for no good reason then good luck to them!

does the EA get any of the reikin ? is that why they are reluctant to find zero-reikin places ?

Posted by kev at 2005/11/25 24:47:14.

What's happened to all your photos? Dropped your camera again?

Posted by Mum at 2005/11/25 13:49:06.

Kev - as far as I know the agent doesn't officially get any of the reikin, but I guess you never know what goes on behind the scenes. As In the UK the estate agents sometime handle the management of properties as well as just the initial contract, so I guess it is not impossible that it is all a bit jumbled up, and the lines between landlord and estate agent could well be blurred in some cases.

Mum - as for the pictures I guess I just haven;t been in a very photographic mood recently!

Posted by John at 2005/11/25 14:44:16.

I am from India. However, the practice of reikin also prevails here and in a much harsher form. It may be a substantial sum which is non-refundable and for which no receipt is given.This is primarily because the rental laws are so stringent here that once the premises is rented it is almost impossible to dislodge the tenant and he become almost the virtual owner. With passing time the rental value increases but you cannot increase rent except some miserly sums like increased municipal taxes etc.If the tenant vacates voluntarily the amount of reikin(called pugri here) is refunded or if he is evicted through legal action the pugri comes inhandy for the legal expences. The evicted tenant loses the amount. In case of voluntar vacating the amout is refunded because the landlord gets a higher sum from the next tenant.Now a days this practiice has been changed to insist on substantial deposits(no receipts). The t enants has willy-nilly to pay it on account of dearth of accommodationThe tenancy almot given ownership right to the occupier so that ,should be building be razed and reconstructed he gets at least fify percent of the area of the r ented premises free(Sometime it could even be 100% depending on location of the place) That is if the tenant purchases a flat.

Posted by prabhakar_gatade@rediff.com at 2007/02/11 23:22:21.

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