Key Issues of Rent Deferral and Rent Reduction under Building Lease Agreement in Japan

    May 2020

    Similar to governments all over the world, the Japanese government is implementing various relief measures to alleviate the negative effect on its economy caused by the spread of COVID-19 and government state of emergency shutdown measures. Small and medium-sized businesses are increasingly requesting that the government provide for rent relief to the businesses and argue that they cannot comply with the Japanese government’s request to stay home because high rent obligations, which are fixed costs, require them to keep their businesses open to generate income in order to pay rent. Clients have asked us to review the possibility for rent deferral and rent reduction under current laws and regulations and other recently implemented measures that are intended to minimize the impact on lessors of rent deferral and rent reduction.