What is Guarantor Company (Hosho Gaisya)?

By | Real Estate

(Photo: GTN Corporation’s application form)

By Masahiro Fukai, Dios Co.,Ltd

I will explain about the guarantor company. The guarantor and the guarantor company are different. Both guarantee rent, but it is common for the landlord to require both a guarantor and a guarantor company. If you have a guarantor, you may think that you do not need a guarantor company, but the guarantor company may request a guarantor during their examination process.

It’s complicated and difficult to understand, isn’t it?

As for the guarantor company, when the Lessee is behind in rent, the guarantor company first reimburses the rent to the owner. After that, the guarantor company collects the rent from the Lessee. Some guarantor companies have advertised that they guarantee rent for 12 or even 24 months. This gives the owner peace of mind. Therefore, most modern rental housing owners require a guarantor company to join for their lease contract. And, in the contract with the guarantor company, the borrower has to pay about half a month’s rent to the guarantor company.

Why does the Lessee have to pay the guarantor company half a month’s rent? Some people say, “I wish the owner would pay for it.”

Until around 2000, there was no guarantor company system in Japan. Until then, the security deposit (Shikikin) was 6 to 10 months. Foreigners were surprised at the large initial cost of Japan.

Actually, this was also unavoidable. Under Japanese law, even if Lessee delinquently pays his rent, it is difficult to kick out the Lessee. It takes about 6 to 10 months to kick out the Lessee who does not pay the rent. Therefore, a security deposit was required for 6 to 10 months.

However, if the security deposit was 6 to 10 months, it would be too burdensome for the Lessee. A security deposit is a deposit that puts your money to sleep and you will not be able to drive cash while you are living in the apartment. On the other hand, if the owner also lacks cash flow, the owner may not be able to refund a large security deposit when Lessee moves out.

Therefore, the “Guarantor company” was introduced around 2000 in Japan.

The borrower pays the security deposit to the owner for about a month. Recently, the number of properties with a security deposit of 0 yen has increased. Instead, you pay the guarantor about half a month’s rent. Comparing paying the security deposit for 6 to 10 months and paying the guarantor fee for half a month of rent, it is lighter to pay the guarantor company for half a month.

Thus, from around 2000, guarantor companies became widespread in Japanese rental contracts.

(Reference) Japan’s Ministry of Land, Infrastructure, Transport and Tourism guidebook URL: Guidebook_Mac.indb (mlit.go.jp)

[Real Estate Agent] This is an agent that serves as the landlord’s agent for
renting housing and that buys and sells real estate.
[Guarantor] This is a person who pays unpaid rent or unpaid repair
costs after you vacate rental housing when you do not/
cannot make the payment yourself. A guarantor is required
when applying to rent rental housing. Guarantors must
have an income that exceeds a certain level. It may be
requested when you apply to rent housing.
[Application Fee] This is money that is paid to the real estate agent when
reserving a rental agreement. Check if the application fee
is returned if a rental agreement is not formed.
[Key Money] This is money that is paid to the landlord at the rental
agreement signing. Key money is often required in the
Kanto Region and is usually 1 or 2 months rent. Key
money is not returned. Recently there is some rental
housing that does not require key money to rent.
[Rent] This is the charge for renting the housing, and generally
the rent for the current month is due at the end of the
previous month. If you move into or out of housing after
the first day of the month, the rent for that month in
principle will be prorated.
[Rent Liability Guarantee Company]
A rent liability guarantee company is a company that
guarantees to pay the rent to the landlord in the event that
you do not pay the rent. To use such a company, you must
pay a set guarantee fee (this is often 35% to 50% of one
month’s rent paid in advance as the guarantee fee for 2
years). However, this is not insurance. The guarantee
company will bill you for the rent that it paid for you.You
may be asked to use this service when applying to rent

The asset value of Japanese buildings is zero

By | Japanese House

Japanese wooden houses will have zero value in 30 years. No, it is not zero, and the cost of demolishing the building is 5 million yen, so the value of the building will be minus 5 million yen, and the value of the land alone will remain. Even if the remodeling work is added, the value of minus 5 million yen will not change.

Whether it’s a new wooden house or a new apartment, the price drops by 20% the moment you buy it. This is because the price of a new building is not the market price, but the price decided by the developer. Since the new construction will be used from the day after the purchase, the price will be decided in the competition of the real estate market, so it will be the purchase price x 80%. Since then, building prices have fallen steadily in Japan.

Even if you spend millions of dollars on a home remodeling, the value remains zero, diminishing the motivation for the owner to invest in the home remodeling in their building. Therefore, DIY is not popular in Japan. And it is not possible to establish a home improvement store that has a wide variety of products for DIY. The value of a building is calculated simply by its “age”. I think the Japanese real estate appraisal standards are significantly distorting the Japanese real estate market. Also, proper inspection that supports real estate appraisal is important, but not. And there is no legal certificate to show that the housing equipment has been renewed.

In the American real estate market, where you can buy a pre-owned home for 30 million yen, live for 10 years, renovate for 2 million yen, and sell it for 32 million yen 10 years later, the owner will spend zero on the home. Become. On the other hand, in Japan, if the value of a new house of 30 million yen becomes zero, you will have to spend 30 million yen for each move, and if you move three times in your life, you will have to pay 30 million yen. Yen x 3 times = 90 million yen will be spent. In a country where housing expenses are zero and in a country where housing expenses are 90 million yen, the level of pressure on households is completely different.

Every country in the world has its own housing policy. I think that the idea that “disposable” is good is flowing in the basis of Japanese housing policy. The national housing policy stipulates the law, distorts the appraisal, and as a result, the DIY of existing homes is locked out, and in fact the housing becomes increasingly poor, so the appraisal falls again and finally the value of Japanese buildings Has fallen below zero.

In Japan today, interest rates are so low that you cannot spend your old age on interest alone. I think this is the cause of the anxiety of the Japanese people. Whether or not a real estate building becomes an asset should be regarded as an important political issue in Japan. I would like to analyze and clarify why Japanese housing is not an asset.

DIY and Japan-Vested interests and affiliates of contractors

By | Japanese House

The Japanese Architects Law is a national qualification enacted in 1950, and there are first-class architects, second-class architects, and wooden architects. In Japan, if you want to build a new wooden building with a total floor area of ​​more than 100 square meters, you must be a first-class architect, a second-class architect, or a wooden architect to design and supervise the construction.

Furthermore, when you ask a Japanese building material manufacturer for a product, most manufacturers say, “We can only sell it through a contractor.” As a result, ordinary consumers have less opportunity to purchase building materials directly. Building materials can be purchased at large home center such as Kohnan etc, but they are called “Pro shop” and are purchased by contractors, and the general public only has very small building materials such as shelves in Japan.

In the United States, it seems that even beams are sold at home centers. In other words, ordinary people who are not contractors can build their own homes by going to a home center for DIY. Some Americans think that even in foundation work, they can DIY with the advice of an expert, but in Japan that is completely unthinkable.

Before the Act on Architects of 1950 was enacted, carpenters did all the design and construction in Japan. I also doubt that design and construction are separate. I don’t think people who have never done construction can make a good design with just the paper on the desk. Besides, if I’m just constructing something designed by others, I don’t think the work is interesting. I think that the joy of making things should be done by the same person in both design and construction. It can be imagined that the old carpenter who was in charge of design and construction at the same time was doing creative and fun work.

I think that the Japanese Architects Law works to protect the vested interests of contractors in the name of protecting the safety of consumers. In addition, building material manufacturers and contractors seem to be affiliated and organized.

The average Japanese has a high hurdle to build their own house with DIY, and it is hard to reach, so it is unavoidable to ask a contractor to do the construction. The higher the quote of the contractor, the slower the maintenance of the building. In Japanese real estate, only land is valuable, and buildings lose their value over time. Japanese buildings are not assets. It has become clear that the cause lies in the vested interests of the Japanese construction companies mentioned above.

Construction of insulation wall

By | Japanese House

I have been introduced many properties to customers through the real estate brokerage business for over 20 years, but I did not know about “insulation”. However, by doing the wall insulation work by myself, I understood ​​what insulation is. Then, the actual conditions of heat insulation of Japanese houses became clear.

I am ashamed to say that I have not been able to correctly explain such important points to customers and provide real estate property information.

If the apartment is made of reinforced concrete, it will be very cold this winter season if it is not insulated. On the other hand, in summer, the room gets hot like a burning hell. Therefore, the air conditioner is fully rotated to adjust the room temperature. Even if you operate the air conditioner, the sensible temperature in winter changes greatly depending on the presence or absence of heat insulation.

If you do DIY construction on your house, I think that you will install insulation nearly 100% of the time. If you ask a contractor to do insulation work, it will be expensive, so if you rent a house you own to another person or sell it for sale, you will not do insulation work. Insulation construction is a tedious task for a contractor, and for rental apartment owners, the insulation work is simplified because they want to keep construction costs down.

First, studs are erected on the wall to make the wall vertical and flat. The studs are filled with foamed styrofoam or kanelite foam to a thickness of 15 mm to prevent condensation. These insulations are pressed against the concrete wall to secure it, without creating any gaps in the concrete wall. Completely cover the concrete wall with airtight tape to keep air out of the wall.

Then fill it with 50mm glass wool. In this way, I don’t think anyone has done the heat insulation construction of Styrofoam + glass wool, but I think it is a very effective construction method to prevent dew condensation.

The walls are completely airtight to prevent humid air from entering. I think this will prevent condensation even with glass wool.

Cover the glass wool with a moisture-proof sheet and secure it to the surface of the studs with an air tacker. Stick a soundproof sheet on top of it, and then screw the gypsum board onto it.

It seems that many construction shops do not want to do glass wool because it is vulnerable to condensation, but I think that it is a very good heat insulating material if it is installed correctly.

A solid insulation wall has been created.