While Japanese tenants, from a landlord perspective, are normally extremely docile and headache free, and while tenancies are generally long and stable as a rule – there is one issue that, while not unique only to Japan, is more common here due to the country’s status as the world’s fastest ageing society. 

As landlords in Japan, our tenants are often elderly – which means that the likelihood of them becoming severely ill or passing away during their tenancy is higher than in most other countries.

Below is a summary of a report we released at Nippon Trading International outlining the different scenarios and how they play out from the perspective of a landlord in Japan.

The Tenant Dies in the Property

If and when a tenant passes away in a property they are occupying, the following procedures, all of which can be quite costly, must take place –

• Removal of the body and cause of death investigation (performed by local police force)
   
• Death scene & remains cleaning (performed by special purpose companies)
   
• Buddhist purification ceremony (performed by local shrine monks)
   
• Removal and disposal of personal belongings
   
• Initial “standard” cleaning & odours removal
   
• Renovations & repairs
   
• Final “standard” cleaning & odours removal

Following the above procedures, the property can now be re-tenanted – however, the next tenant in line must, by law, be informed that a death has occurred in the property – and a notice to this effect (“Special Circumstances Notice”) must be included in the advertisement of the vacant property.

Mitigating Risks and Damages

What, then, is a landlord to do, in a country where such a large percentage of potential tenants are elderly destitute pensioners and retirees? 

Not only would one deny one’s self of a huge tenants database, but there’s also a point to be made as to avoiding age discriminiation practices and general cold-heartedness on behalf of landlords – these tenants well and truly need a break, mainly due to the fact that so many landlords shun them, for the exact reasons discussed above. 

Fortunately…

There’s an Insurance Policy for Everything

Insurance companies in Japan…have quickly realised the opportunities the rapidly ageing population presents, have risen to the challenge, and have come up with a “Death in Property” coverage clause, which can be added to any rental property.

For a relatively low premium of only $60-70 annually (as of the date of this article being published), landlords can receive the following benefits if and when a tenant passes in the property:

1. Up to 1 mil JPY (app. $10,000 in cleaning, repairs & renovation expenses)and, more significantly –
    
2. Up to a year of lost or reduced rental income as a result of the death (including both an extended vacancy AND re-population of the property at a lower rent amount).

This type of policy does not discriminate between causes and circumstances of tenant death and is therefore highly recommended, regardless of the actual age of the tenants.

Younger tenants can also suffer accidental or health-related deaths and at such a low premium, there’s absolutely no reason not to apply for such coverage. 

The amount of headaches and expenses which it can help landlords avoid cannot be overstated.

Further Reading

My Tenant Died in My Property Full Report (Nippon Tradings International; February, 2022)