Osaka commercial overview | Legal Guide

Unlike residential leases that focus on consumer protection, the leasing of commercial real estate in Osaka—such as prime office buildings, retail space, or logistics warehouses—primarily operates under the framework of the Civil Code (Act No. 89 of 1896), which provides the foundation for lease agreements.

Because commercial leasing is fundamentally a Business-to-Business (B2B) transaction, parties have broad freedom to define terms in their contracts. This allows landlords to implement protective clauses to secure the capital required for commercial asset management, provided these clauses do not violate public policy (Civil Code Article 90).

Discrepancies: Commercial Lease Principles

Commercial Security Deposits

The Security Deposit (Shikikin/Hoshokin) in Osaka's commercial market is substantial. Tenants often deposit 6 to 12 months of rent as a buffer against potential unpaid obligations.

If a lessor receives a security deposit (Shikikin) for the purpose of securing an obligation to pay money that is owed by the lessee to the lessor based on a lease, such as an obligation to pay rent, the lessor must return to the lessee the amount that remains after deducting the amount of the obligation to pay money that is owed by the lessee to the lessor based on the lease, upon termination of the lease and return of the leased thing (Civil Code Article 622-2 (1)). The lessor may appropriate the security deposit to the payment of the obligation if the lessee fails to perform an obligation to pay money based on the lease, but the lessee may not demand that the lessor appropriate the security deposit to the payment of the obligation (Civil Code Article 622-2 (2)). The Civil Code does not explicitly provide for a non-refundable portion of a security deposit that is automatically confiscated as a fee upon move-out, irrespective of actual obligations or property condition.

Termination and Move-Out

For leases of buildings with indefinite terms, either party may give a notice of termination at any time, and the lease terminates three months after the day of the notice of termination (Civil Code Article 617 (1) (ii)).

Upon termination of a commercial lease, the move-out condition is governed by Civil Code Article 621. When the lease ends, the lessee has an obligation to restore the leased thing to its original state if any damage is caused after receiving it, but this obligation explicitly excludes any wear of the leased thing caused by the ordinary manner of using and making profit from it and any aging degradation of the leased thing. Contractual stipulations must be interpreted in light of these statutory limits regarding ordinary wear and aging.

Compliance Considerations

To manage a Osaka commercial portfolio successfully:

1. Contract Clarity: Ensure all lease terms regarding renewals, rent adjustments, and deposit deductions are clearly defined, as the Civil Code provides broad freedom of contract.
2. Restoration Management: Clearly document the condition of the property at the start of the lease to avoid disputes regarding the restoration obligation under Civil Code Article 621, which excludes wear caused by the ordinary manner of using and making profit from it and aging degradation.
3. Security Deposit Accounting: Maintain transparent records of all security deposit appropriations for unpaid obligations under Civil Code Article 622-2 to ensure compliance upon lease termination.

Explore the detailed requirements for Osaka commercial properties:

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• B2B LeasesPreview unavailable
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• Rent IncreasesPreview unavailable
• B2B Lease FormattingPreview unavailable
• Maintenance ObligationsPreview unavailable
• Late Fees & Default InterestPreview unavailable

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Landager tracks lease terms, security deposits, and renewal deadlines - making it easy for both landlords and tenants to stay compliant with Osaka regulations.

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