Security Deposit : The deposit system in Japanese rental contracts

Security Deposit (敷金) is a type of security deposit paid to the landlord during the rental process in Japan. Typically, the amount is equivalent to one to two months' rent and is held by the landlord as a form of guarantee. The deposit is refundable, provided the rental property is returned in good condition without any damage. However, costs for repairs or any unpaid rent may be deducted from the shikikin before the remaining balance is refunded.

History:

The shikikin system was introduced in post-war Japan as the rental market expanded. It was created to provide landlords with a guarantee against risks such as unpaid rent or property damage. For many years, it has been a standard practice in the Japanese real estate market and a key part of rental agreements. In recent years, there has been a push for more transparent agreements regarding the amount of the deposit and the terms of its return.