Guarantor Company Fee: The Fee for Guarantor Services in Japanese Rental Contracts

Guarantor Company Fee (保障委託料) is a service fee paid to a guarantor company in Japan when a tenant cannot provide a personal guarantor for their rental agreement. In Japan, many rental contracts require tenants to have a guarantor, but if the tenant is unable to find one, they can opt to use a guarantor service. In such cases, the tenant pays the guarantor company fee to the guarantor company. This fee is typically around 50% to 100% of the monthly rent and is paid before the rental agreement is finalized.

History: The system of guarantor company fees has become increasingly common in recent years as an alternative to the traditional personal guarantor system in Japan. Historically, landlords required tenants to have a guarantor for rental agreements. However, finding a suitable guarantor could be difficult or burdensome, which led to the rise of professional guarantor companies. These companies provide a substitute for a personal guarantor, and the guarantor company fee allows tenants to secure a rental property without needing to rely on a personal connection. This service has become an essential part of modern rental agreements in Japan.