Since the legal age was lowered to 18 years old on April 1, 2022, it will soon be three years.
In response to this change, real estate agents specializing in sales did not feel much of a crisis, but rental agencies were forced to take action. Generally, 18-year-olds are still likely to be immature, and a proper understanding of the risks involved in contractual actions is required.
Under the Civil Code, minors were previously required to obtain the consent of their parents or guardians when engaging in legal acts, and contracts made without this consent could be canceled (Article 5, Paragraph 2 of the Civil Code). However, with the lowering of the legal age, contracts made by those aged 18 and above can no longer be canceled. This change has had an impact on real estate contracts.
In reality, there has been an increase in cases where individuals claim, “I didn’t hear about it,” “I didn’t know,” or “I didn’t understand.”
Legally, as long as a contract does not violate public order or mandatory laws, it is considered valid, even if it imposes unfavorable conditions on one party (Civil Code, Article 521: Freedom of contract and content). Moreover, in real estate transactions, the Act on the Building Lots and Building Transactions requires the explanation of important matters before the contract is concluded, so claims like “I didn’t hear about it” should not be valid, as long as the explanation was made appropriately.
Despite this, such troubles are occurring frequently in practice.
According to the Consumer White Paper for 2024, while the number of consumer consultations is generally decreasing, in the ranking of issues by product or service, “real estate rental” occupies a high position just after “general products.” Moreover, when analyzed by age group, the number of consultations from people in their 20s significantly exceeds that of other age groups.
It cannot be definitively stated that those in the age group affected by the lowering of the legal age are particularly prone to problems, but if their understanding of the importance of contracts and legal matters is insufficient, the risk of disputes increases.
This article will review trends in rental contract disputes and appropriate responses, referencing the “Private Rental Housing Consultation Casebook (Revised Edition)” published by the Study Group on Rental Dispute Response in March 2022.
The Current Situation and Trends of Disputes in Rental Contracts
Since the lowering of the legal age of adulthood, disputes surrounding rental contracts have been increasing. According to data released by the National Consumer Affairs Center, the number of consultations, which was about 140,000 in 2021, has increased by 23.6% to around 173,000 in 2024.
About 40% of rental housing-related consultations still concern “restoration to original condition” as in previous years, but when broken down by age group, consultations from those in their 20s and 30s make up more than half. This is believed to be due to this age group being more likely to use rental housing, often due to first-time living alone or job changes.
A common issue among new adults is the signing of contracts without fully understanding the terms. Claims such as “I don’t remember being told about the cost of restoration when moving out” or “The rental guarantee company’s fee was unexpectedly high” have been observed. These issues likely stem from insufficient information provided during the explanation of important matters and the lack of experience by the renters.
When categorizing the consultation content by stage, there are more inquiries about repairs and management during the tenancy, and “disputes related to restoration costs and deposit refunds” are particularly common at the time of moving out.
This trend is not new. In response, the Ministry of Land, Infrastructure, Transport and Tourism first created “Guidelines for Disputes Regarding Restoration to Original Condition” in 1998 (Heisei 10). The guidelines were revised in 2004 (Heisei 16) and 2011 (Heisei 23), reflecting changes in case law and transaction practices, and a new reference material was released in 2023 (Reiwa 5).
This material specifically outlines the depreciation of rental properties and the burden of restoration, showing the expected lifespan of various facilities (with specific materials provided for each type) and the tenant’s share of responsibility. Ideally, the spread of these standards would reduce restoration disputes, but in reality, they are on the rise.
A key factor is that while the Civil Code and the guidelines place the burden of normal wear and tear and aging changes on the landlord, contracts often contain special provisions that differ from this.
Rental agreements are based on the principle of “freedom of contract,” meaning that the landlord and tenant can freely set the terms based on mutual agreement. Under this principle, special provisions are valid unless they violate public order or mandatory laws. However, if the contract is signed without fully understanding this principle or the impact of special provisions, problems are bound to arise.
Real estate agents must ensure that tenants fully understand the terms of the contract, considering the guidelines and the principle of freedom of contract, and work proactively to prevent disputes.
Measures to Prevent Rental Disputes in Advance
To prevent rental housing disputes in advance, improving the quality of explanations is the most effective strategy. Particularly when explaining to young people, such as new adults, who may lack experience, the following specific measures are necessary:
- Thorough Explanation Based on the Real Estate Brokerage Act
Ensure that no explanations regarding contract terms or special provisions are omitted, and provide explanations in accordance with the law. - Encourage Understanding
Replace technical terms with simple expressions, and use visual aids like charts or brochures to help tenants better understand the contract. - Create and Share a Pre-Contract Checklist
Create a checklist of items to review before signing the contract and share it with the tenant to prevent any omissions regarding important matters. - List Key Points
Particularly with special provisions, organize the important points in advance and provide explanations using specific examples. - Ongoing Employee Training Using Dispute Case Studies
Use real dispute cases as training materials, enabling employees to develop practical skills and handle situations effectively.
Regarding special provisions, extra care is required, as they are often strongly influenced by the landlord’s intentions.
For example, the term “security deposit” (or “guarantee deposit”), regardless of its name, is stipulated by Civil Code Article 622-2 as “to secure any debts arising from the lease agreement, such as rent arrears or damage to the leased property caused by negligence.”
However, the acceptance of the deposit is based on the mutual agreement of the parties to the contract.
Therefore, questions often arise, such as, “If I’m using a rent guarantee company, why do I still have to pay a security deposit?” It’s important to clarify that the security deposit does not only guarantee rent arrears.
Additionally, regarding the “deduction from the deposit,” many tenants ask, “How can the deposit be uniformly deducted when the condition of the property at move-out is unclear?” While such special provisions are not illegal, the Supreme Court has ruled that “the amount of the deposit deduction is valid if it is within the range that would reasonably cover repair costs for normal wear and tear” (e.g., a deduction equal to about one month’s rent).
Real estate agents must appropriately explain these points to tenants, ensuring that they fully understand the content before signing the contract. To do so, agents must regularly update their knowledge and be prepared to quickly and accurately respond to any anticipated questions.
Appropriate Response Methods When Troubles Arise
The key to handling disputes is in the “initial response.”
No matter how careful you are, it is impossible to completely avoid problems or complaints. However, by responding appropriately and swiftly, the damage can be minimized. It is important to ensure the following six steps are followed:
- Gather Information to Identify the Cause of the Problem
Collect specific details about the situation, testimonies from involved parties, confirmation of the contract details, and records such as photos, audio recordings, and message history. - Share Information
Share the gathered information between the responsible parties, relevant departments, and if necessary, external organizations, to gain a full understanding of the issue. - Consider Recovery and Response Measures
Develop concrete measures to restore the current situation, such as repairing damaged areas or providing alternative solutions. - Clarify Responsibility
Based on the contract and applicable laws, clarify which party—the landlord, tenant, or real estate agent—should bear responsibility. - Understand Compensation and Cost Burdens
Based on the allocation of responsibility, clearly define the necessary compensation and cost-sharing, and explain them to the involved parties. - Consider and Specify Preventive Measures
To prevent similar problems in the future, review internal manuals and consider revising contracts as necessary.
By swiftly and accurately following these steps, the damage caused by a dispute can be minimized.
Summary
It is difficult to completely prevent disputes in rental housing, but with proper preparation and swift responses, it is possible to minimize the issues. To achieve this, it is necessary to understand the trends in problems and develop the awareness and skills to address them accurately when they arise.
Salespeople tend to focus on sales targets, but being overwhelmed by handling disputes can hinder their sales activities. On the other hand, salespeople who can handle disputes smoothly build trust and achieve stable results.
Thus, the ability to handle disputes is an essential skill for excellent salespeople.
The real estate industry is prone to disputes due to its complex relationships and the need for various interest adjustments. However, by responding quickly and accurately, it is possible to build trust and attract repeat clients.
This article has discussed prevention strategies and response methods based on the decrease in the age of majority and trends in rental housing disputes. While preventing disputes is challenging, making efforts to prevent serious issues from occurring is something anyone can do. To enhance trust as a real estate professional, it is important to value daily awareness and practice.
Original Article: 【成年年齢引き下げから3年】若年層の消費者トラブルが示す新たな課題
For additional information or any questions please contact us here
Email: info@remax-apex.com