My Tenant's Lease in Japan Has Expired: What are the Grounds for Seeking Eviction, and What if They Claim a "Building Ownership Purpose"?

Japanese Attorney at Law - Bengoshi L.L.

• 7 min read

When a lease term expires, landlords typically expect to regain possession of their property. However, in Japan, particularly concerning land leases, the situation can be more complex than a simple contractual expiration. While the Civil Code provides general rules for lease termination, the Act on Land and Building Leases (Shakuchi Shakka Hō - 借地借家法) introduces significant tenant protections, especially if the land was leased for the purpose of "building ownership." This article explores the factual allegations (Yokenjijitsu - 要件事実) a landlord needs to make for an eviction claim based on term expiration and, crucially, how a tenant's assertion of a "building ownership purpose" can dramatically alter the landscape.

Lease Agreements (Chintaishaku Keiyaku) in Japan: The Fundamentals

A lease agreement (chintaishaku keiyaku - 賃貸借契約) under Article 601 of the Japanese Civil Code is formed when one party (the lessor/landlord) agrees to allow another party (the lessee/tenant) to use and take profits from a specific thing, and the lessee agrees to pay rent for it. This forms the basis for the landlord-tenant relationship.

The "Subject Matter of Litigation" (Soshōbutsu) in an Eviction Claim

When a landlord sues for eviction based on the termination of a lease, the "subject matter of litigation" (soshōbutsu - 訴訟物) is generally considered to be "the right to demand the return of the leased property based on the termination of the lease agreement." Even if there are multiple reasons for termination (e.g., expiration of term, tenant default), the prevailing view in Japanese legal practice (the "unitary theory" or ichigen setsu - 一元説) is that there is typically only one subject matter of litigation for eviction stemming from a single lease agreement. The different reasons for termination are considered alternative factual grounds supporting that single claim.

Landlord's Factual Allegations (Yokenjijitsu) for Eviction upon Expiration of Term (Civil Code Basis)

If a landlord is seeking eviction based on the simple expiration of the agreed lease term under the general provisions of the Civil Code, their cause of action (seikyū gen'in - 請求原因) must typically include the following Yokenjijitsu:

  1. Conclusion of the Lease Agreement (Chintaishaku Keiyaku no Teiketsu - 賃貸借契約の締結):
    • The landlord must allege that a lease agreement was concluded between the plaintiff (landlord) and the defendant (tenant) concerning a specific property (e.g., a defined parcel of land).
    • Key terms to be alleged include the identification of the parties, the specific property leased, and the agreed-upon rent.
  2. Delivery of the Leased Property to the Tenant (Mokutekibutsu no Hikiwatashi - 目的物の引渡し):
    • The landlord must allege that, pursuant to the lease agreement, they delivered the property to the tenant, thereby making it available for the tenant's use and profit as stipulated in the lease.
    • It's noteworthy that the tenant's current physical possession of the property is not, strictly speaking, a Yokenjijitsu for a claim based on lease termination. The tenant's obligation to return the property upon termination arises from the lease contract itself, regardless of whether they are, for example, sub-letting it or have abandoned it (though practical enforcement might differ). This contrasts with a claim by an owner against a mere trespasser, where the defendant's possession is a core element.
  3. Termination of the Lease Agreement due to Expiration of the Agreed Term (Kikan Manryō ni yoru Keiyaku Shūryō - 期間満了による契約終了):
    • (a) Agreement on a Specific Lease Term (Chintai Kikan no Gōi - 賃貸期間の合意): The landlord must allege that a specific duration for the lease was agreed upon by the parties (e.g., "a term of five years from April 1, 2020, to March 31, 2025").
    • (b) Expiration of the Agreed Term (Kikan Manryō - 期間満了): The landlord must allege that this agreed-upon term has now passed. The passage of a calendar date is typically a "notorious fact" (kencho na jijitsu - 顕著な事実) that does not require extensive proof once the agreement on the term is established.

Under the Civil Code alone, establishing these facts would generally entitle the landlord to reclaim the property. However, for many leases, especially land leases, another layer of law provides substantial tenant protections.

The Critical Impact of the Act on Land and Building Leases (Shakuchi Shakka Hō)

The Act on Land and Building Leases (ALLBL) provides significantly stronger protections for tenants (lessees) of land and buildings than the general Civil Code provisions, particularly for land leased for the purpose of owning buildings on that land. This Act often overrides the Civil Code's default rules regarding lease terms and termination.

The "Building Ownership Purpose" Defense (Tatemono Shoyū Mokuteki no Kōben - 建物所有目的の抗弁):

This is a crucial defense a tenant can raise if a landlord seeks eviction from land based on the expiration of a contractual term.

  • If the tenant (defendant) successfully establishes that the primary purpose of the land lease agreement was for the tenant to own a building (or buildings) on that leased land, the protective provisions of the ALLBL regarding lease terms are triggered.
  • Statutory Lease Terms for Land Leases for Building Ownership (ALLBL Articles 3 and 9):
    • Minimum Initial Term: Irrespective of any shorter term stipulated in the contract (unless it's a special type of fixed-term lease created under specific ALLBL procedures), the initial term of a land lease for building ownership is deemed by law to be 30 years. If the parties agree on a term longer than 30 years, that longer agreed term applies. If no term is set in the agreement, it is also automatically 30 years.
    • Statutory Renewed Terms: Upon renewal, the first renewed term is statutorily set at 20 years, and subsequent renewed terms are 10 years, unless the parties agree on longer periods.
  • Consequence: If a land lease is found to be for building ownership, a landlord's claim for eviction based on the expiration of a contractually agreed shorter term (e.g., 5 years or 10 years) will likely fail if the tenant raises this defense. The ALLBL effectively extends the lease term to the statutory minimum (initially 30 years).

Landlord's Pleading Strategy in Light of Potential "Building Ownership Purpose":

Given this, if a landlord of land believes the lease was not for building ownership (e.g., it was for a parking lot, materials storage, or agricultural use not involving tenant-owned buildings), they might need to proactively address this in their pleadings, especially if they anticipate the tenant will raise the building ownership purpose defense. The landlord would allege the specific, non-building-ownership purpose agreed upon. This becomes a central factual dispute: what was the true, agreed-upon purpose of the land lease at the time of contracting? The subjective intent of one party alone is not determinative; it depends on the mutual agreement, often inferred from the contract language, the state of the land, and surrounding circumstances.

Statutory Renewal (Hōtei Kōshin) and "Just Cause" (Seitō Jiyū) under the ALLBL

The ALLBL's protections for tenants of land for building ownership extend beyond just the initial term:

  • Statutory Renewal (Hōtei Kōshin - 法定更新) (ALLBL Article 5): Even if the statutory (or longer agreed) term of a land lease for building ownership expires, the lease is often deemed automatically renewed on similar terms if:
    • The tenant requests renewal and there is a building on the land.
    • The tenant continues to use the land after expiration, and the landlord does not object without delay after becoming aware of the continued use.
  • Landlord's Refusal to Renew Requires "Just Cause" (Seitō Jiyū - 正当事由) (ALLBL Article 6): For a landlord to refuse to renew such a land lease (or to terminate it under certain other conditions), they must demonstrate that they have "just cause" to require the return of the land. Establishing "just cause" is a notoriously high hurdle for landlords in Japan. The court comprehensively assesses various factors, including:
    • The landlord's and tenant's respective needs for using the land.
    • The prior history of the lease.
    • The current condition and use of the land.
    • The landlord's offer of monetary compensation (often called tachi-noki-ryō - 立退料, or eviction payment) to the tenant to supplement other reasons.
      (A full discussion of "just cause" is complex and beyond this article's immediate scope, but its existence as a requirement is fundamental to understanding the difficulty landlords face in terminating these types of leases).

Allocation of Burden of Pleading and Proof

  • Landlord (Plaintiff): For a basic claim of eviction due to expiration of a (Civil Code) term, the landlord alleges the conclusion of the lease, delivery of the property, the agreed term, and its expiry.
  • Tenant (Defendant): If the tenant asserts that the land lease was for a "building ownership purpose," they bear the burden of alleging and proving the facts supporting this purpose. If established, the ALLBL provisions regarding longer statutory terms and renewal protections apply.
  • If the purpose of the lease is disputed, both parties will present evidence (contractual clauses, pre-contract negotiations, nature of the land, subsequent use, etc.) to support their contention regarding the agreed-upon purpose at the time of contract formation.

Practical Implications for Landlords and Tenants of Land in Japan

  • Extreme Clarity in Lease Agreements is Essential: The purpose of a land lease should be explicitly and unambiguously defined in the written contract. If the intention is genuinely not for the tenant to own buildings on the land (e.g., it's for a temporary parking lot, agricultural use by the tenant who doesn't own structures, or a materials yard), this non-building-ownership purpose should be clearly stated to mitigate the risk of the ALLBL's robust tenant protections being invoked.
  • Presumption of ALLBL Applicability for Ambiguous Land Leases: If a land lease is silent or ambiguous about its purpose, and the circumstances allow for the possibility of building ownership, courts may lean towards applying the tenant-protective ALLBL.
  • Consider Fixed-Term Land Lease Options under ALLBL: The ALLBL itself provides mechanisms for "fixed-term land lease" agreements (e.g., General Fixed-Term Land Lease under Article 22; Land Lease for Business Purposes under Article 23; Land Lease with Building Transfer Special Agreement under Article 24). These types of leases, if created in strict compliance with statutory formalities (which often include notarization or specific written forms), can exclude statutory renewal provisions and provide landlords with greater certainty regarding the termination of the lease at the end of the agreed term. These are important tools for landlords seeking more predictability.

Conclusion

While claiming eviction based on the expiration of a lease term might seem straightforward under Japan's Civil Code, the reality, particularly for land leases, is significantly shaped by the Act on Land and Building Leases. A tenant's assertion that the land was leased for a "building ownership purpose" can fundamentally alter the applicable lease duration, potentially extending it by decades beyond a shorter term written in the contract, and can trigger strong rights of renewal that are difficult for a landlord to overcome without "just cause."

Landlords in Japan must therefore be acutely aware of the purpose for which their land is being leased from the very outset. Careful drafting of lease agreements to clearly define this purpose, and consideration of specialized fixed-term lease options under the ALLBL where appropriate, are crucial steps in managing landlord-tenant relationships and ensuring the landlord's ability to recover possession of their property as anticipated. Failure to account for the powerful effects of the ALLBL can lead to unexpected and lengthy extensions of land lease relationships.