When you rent an apartment, the most concerned issue for landlords to rent you a room is “reliability”. This “reliability” indicated by a landlord is built by basically suspecting your solvency.
A landlord wants to reduce the risk of being fallen behind in rent by you as far as possible. So he suspects.
- if you have a regular job with monthly salary
- if your salary would be enough to cover the rent
These two things are the most emphasized points which you are put under suspicious in the process of getting reliability from a landlord.
In some cases, you will have to respond to a request from a sensitive landlord and submit your employment certificate and your income certificate. You can evidence your solvency by submitting those documents.
However, a landlord who still distrusts you will suspect if you would vanish into thin air as leaving unpaid rents for several months on the ground that you couldn’t keep paying rent because you might be resigned even under the contractual term.
A landlord who is prohibited from displacing a tenant by law by force requires you to find someone who has the capacity to cover your rent as a guarantor when falling into the above situation.
Sometimes, your guarantor will be also screened if having the solvency to cover your rent just in case you leave unpaid rent behind and disappear.
I think it is a quite immoral way to hedge the risks for landlords to get a person with whom has no concern to be involved with this lease guarantee system. However, reliability between a tenant and a landlord is established in these processes in Japan.
Contents
Why you find a guarantor
A tenant is protected by various laws in Japan and stands in a much stronger position than a landlord legally. It is quite an immodesty but you just try to fall in behind in rent for 3 months as an experiment. You can understand all a landlord cad do for it is only giving you a reminder and claiming interest on overdue rent.
He can’t yell loudly at you to get you out. He can’t change a key without the tenant’s permission. He can’t carry your stuff out of your room to indicate that you are under eviction.
Because a landlord can’t take the high hand with a tenant legally, he relies on legal force of a guarantor who needs to pay rent for you instead just in case you can’t keep paying.
Even if you are laid off or even if you need to have long medical treatment in a hospital, you need to keep paying on time as far as you are under a contract with a landlord.
Landlords requiring a guarantor is one of the ways to avoid being fallen behind by you no matter what kind of situation you are in.
The Difference between a guarantor and co-signer
In Japan, both a guarantor and co-signer are the person who has a contract to assume your rent in the situation where you can’t keep the rent or you already fall behind in rent for a couple of months.
At the time, a landlord reminds a guarantor of paying for the delayed payment instead. Against this claims, the right recognized in a contract is different between a guarantor and a consigner.
Guarantor’s rights
The rights that a guarantor can exercise is the followings below.
- beneficial excuse for notice
- beneficial excuse for execution
beneficial excuse for notice
“Beneficial excuse for notice” gives you the right to say a landlord “please press a tenant for payment of rent ” when you are required to assume unpaid rent by a landlord. As far as a tenant goes missing, you can assert the right.
beneficial excuse for execution
Beneficial excuse for execution gives you the right to say a landlord “I prove that a tenant has property. So please collect unpaid rent from the property”. Even if you exercise “beneficial excuse for notice”, its legal force gets a landlord to press a tenant for payment of rent for only one time.
If you prove that a tenant has enough property, a landlord cannot request you to pay a tenant’s unpaid rent unless a landlord seizes a tenant’s property by legal means. For the reason, if a landlord is said ” a tenant has enough property to cover the unpaid rent so please collect from it” by you, a landlord request you nothing about tenant’s unpaid rent.
Co-signer’s rights
A cosigner doesn’t have the above two rights. When being claimed to pay a tenant’s unpaid rent by a landlord, a cosigner can’t assert the right to request a landlord to claim unpaid rent to a tenant and needs to respond to a landlord’s request.
Therefore, a cosigner assumes heavier responsibilities than a guarantor. A cosigner takes the same responsibilities as a tenant does. For a landlord, securing a cosigner is more favorable than a guarantor when concluding a contract.
If you become a cosigner for someone who will rent a room, for the guaranty of liabilities, you are requested to stamp registered seal on a contract and certificate of seal impression in order to confirm your intention to guarantee.
Even though a landlord claims you to pay a tenant’s unpaid rent, it is pretty difficult for a landlord to collect liabilities if you say “I don’t mean to guarantee his rent” or “I have no idea about this contract”.
Therefore, a landlord will request you to
- Confirm your intention to guarantee a tenant’s rent
- Stamp your registered seal on a contract
- acquire certificate of seal impression
A landlord needs to prepare a contract which includes content about the responsibilities of a cosigner and confirm your intention to guarantee a tenant’s rent in order to collect rent perfectly.
Who you should ask for co-signer
A cosigner needs to earn as much monthly salary as covering tenant’s house-rent every month. In general, most of the Japanese people ask their parents for co-signer who have enough solvency and property to cover the rent.
However, there is a case where a man asked his parents living off their pension for a cosigner to rent an apartment but parents are rejected to become cosigner because of they didn’t have the solvency to cover monthly rent of the apartment.
Moreover, the identity of a person who you ask for a cosigner needs to be reliable. In some cases, a landlord requests a person who will become a cosigner to submit employment certificate and income certificate to make sure his identification as well as his income level. If you ask one of your friends for co-signer, your friend should at least do the job that he/she can tell what kind of task he/she is in charge of.
Secondly, you need to choose a person who builds a good relationship with you mutually in public and private because the troubles involved with money tends to be easily disrupted.
Unless you have a good relationship with a person who you are going to ask for co-signer,
you will suffer irreparable damage of mutual friendship starting from your overdue rent.
So that it won’t happen, you have to confirm the person’s agreement in terms of disadvantages.
However, it is pretty difficult to ask someone for co-signer to guarantee your payment of rent. People all know how disadvantageous it is to sign on a contract as co-signer because it is pretty much the same as assuming all your debt forcibly.
Ideally, you should find Japanese cosigner as much as possible because Japanese guarantor is much more reliable for a landlord than any other nationalities, which is highly rated when you are screened.
But remember, all Japanese are very careful to become co-signer. If you think you can ask nobody for a cosigner, you are very normal.
You have another choice to use guarantor company to guarantee your monthly payment.
What is Guarantor company
Mostly, Japanese people will take warning against you at the time you ask for a cosigner.
Your position is quite weak in Japan because not being Japanese gives you the hardship to get people to trust truly.
Only the thing which guarantees your social credibility is the name value of a company you work for in Japan. Unless you work for a famous company, there is nothing that will back up your social credibility. So you will have a choice to use a guarantor company.
In Japan, originally a guarantor company is used by people whose parents are retiree or who don’t have no relatives to rely on or who is isolated from the society because of having complicated past but lately there is a mood that this kind of company tends to be used at ease by young people who even have enough social credibility.
A guarantor company is not “cosigner” or “cosigner company” or even “Guarantor agent company”. A cosigner generally needs to assume the same responsibility as a tenant does in terms of all debt on the rental agreement. A guarantor company doesn’t sign on a contract of your rental agreement so a guarantor company cannot be a cosigner to the rental agreement to list its name as a cosigner.
A guarantor company prepares the guarantee consignment contract uniquely to conclude among three parties which are a tenant, a guarantor company and a landlord, whose coverage is to guarantee tenant’s overdue rent based on guarantor company’s regulations.
So a guarantor company is not involved with the rental agreement between a landlord and a tenant so that there are a number of cases where the rental agreement is not covered by the guarantee consignment contract provided by a guarantor company.
Primary guarantee coverage
- Tenant’s overdue rent
- Court costs for evacuation
- Removal costs for leftover objects
- Recovering costs
Guarantee fee
In general, A guarantor company collect some percentages in rent as fee or independent fixed price. Guarantee fee system differs depending on the company.
The first time guarantee fee
There are relatively many cases where it collects 30 % to 100% in monthly total rent. For example, if you rent an apartment at 60,000 including management costs, you should pay 18,000 yen to 60,000 yen to a guarantor company.
Renewal guarantee fee
When you renew (annually) a contract with guarantor company, generally it collects 10% in monthly total rent or 10,000.
Pros & cons of using guarantor company
Pros
- There are a lot of apartments that doesn’t request you to find cosigner if you make a contract with a guarantor company so your choice will extend.
- Because a guarantor company guarantees your payment of your house-rent, even if you fall behind in rent, pay temporarily on your behalf.
Cons
- Guarantee fee is charged for the first rental contract so your financial burden will increase.
- After a guarantor company pays your overdue rent on your behalf, there is a possibility that you get frequent visits from the guarantor company persistently. You should carefully choose a guarantor company which keeps ethics standards when collecting advance money.
Conclusion
Only the people who enjoy the benefit of making the guarantee consignment contract mutually is a landlord and property management company in a true sense. Because of primary guarantee coverage
- Tenant’s overdue rent
- Court costs for evacuation
- Removal costs for leftover objects
- Recovering costs
is regulated to guarantee a landlord’s requirement. This is a kind of security charge to make them feel relieved.
However, most of you are not convinced that “Why should I bear an expense of a guarantee fee whose advantage is usually enjoyed by a landlord and a property management company though ”
In the past, a guarantor company provides a guarantee system for those who can’t find cosigner by themselves but nowadays, the way of using a guarantee system itself has come to change.
Landlords who provide a room under the condition of making a contract with guarantor company has increased these days.
The background that making a contract with guarantor company became one of condition to move in an apartment is the following things.
- Nobody hasn’t fallen behind in rent for 1 year in an apartment occupied by 10 families.
- Half of tenants have one-month overdue rent in an apartment
- Made a pressing phone but a tenant didn’t pick up a phone. Those who reply back by phone is 20%
- Short mail with “I will pay next month”
There are so many cases where people are not opposed to falling behind in rent. The reason that a landlord claims a tenant to make a contract with the guarantor company is happening moral degeneration among tenants.
So making a contract with a guarantor company is evidencing constant payment without falling behind. After all, this problem will be solved if every tenant would pay rent monthly without delaying.