![[With Checklist] Comprehensive Guide to Renting a Property with a Corporate Lease!](https://rent-apartment.tokyo/wp-content/uploads/2024/06/family.jpg "[With Checklist] Comprehensive Guide to Renting a Property with a Corporate Lease!")
When applying for a rental property, you may be asked whether the contract holder will be an individual or a corporation. What exactly is a corporate lease? We will provide a thorough explanation of the points to note and the process involved in such contracts. If you are considering a corporate lease due to a job transfer, be sure to check this out.
What is a Corporate Lease?
A corporate lease is a rental contract where the business entity, rather than the individual tenant, signs the lease. Typically, this is done when a company leases a property as housing for its employees or when it leases commercial properties such as stores, offices, or parking spaces.
The most common type of corporate lease for housing involves the company providing a rent subsidy. In this arrangement, the company signs the lease as the tenant on behalf of the employee. This is often used when employees are transferred from other locations or as part of the company's employee benefits, allowing the company to lease general rental properties as corporate housing.
Freelancers or sole proprietors may also enter into corporate leases for properties used as both a residence and an office (SOHO). Since many rental properties are designated for residential use only, the availability of properties that allow for both residence and office use is limited. Be sure to inform the real estate agent that you are looking for SOHO-compatible properties.
The incidental expenses involved in a corporate lease are not different from those in an individual lease. However, sometimes the company may cover these initial costs according to its corporate housing policy. Always confirm this with the department responsible for corporate housing procedures, such as the general affairs department.
What is the process for a corporate lease? Here’s a detailed explanation. From here on, we will focus on corporate leases for residential rentals where the company provides rent subsidies.
First, contact your company's General Affairs Department or the department responsible for corporate housing contracts. Many companies that offer corporate leases have established "corporate housing regulations." These regulations include the internal process flow, the criteria for eligible properties, the amount of rent subsidy, the initial costs covered, and the contract procedures, which are crucial for corporate leases. Make sure to thoroughly review these regulations and confirm the requirements for internal procedures and eligible properties. Additionally, real estate agents often specialize in corporate leases and can suggest properties based on these regulations if you show them the document. Bring a copy or a digital version of the corporate housing regulations when you start looking for a property.
What are the typical restrictions and conditions for properties and contracts? These are essential when searching for a property. Print out or save the corporate housing regulations and show them to your real estate agent to find suitable properties. Although there are variations between companies, here are some general considerations and restrictions:
① Is there a rent cap?
Often, there are rent caps based on the area you are moving to, your length of service, age, number of family members, etc. There might be strict caps or cases where you can exceed the cap if you cover the excess amount yourself. Verify both the maximum rent and the company's rent subsidy limit.
② Are there limits on initial costs?
There might be limits on initial costs, such as security deposits and key money not exceeding two months' rent each. While exceeding this is rare, some pet-friendly properties require an additional month of security deposit for pets. Confirm whether the company covers the entire initial cost or only up to a certain amount, as specified in their regulations. Note that some companies do not allow non-refundable deposits, which are common in pet-friendly rentals.
③ Are there area restrictions?
Restrictions might include a maximum commuting time (e.g., within 30 minutes by train or on foot), a specific radius from the office, or a certain number of train stations away. Ensure you confirm these restrictions when searching for properties.
④ Are there restrictions on property age, size, or structure?
Requirements might include properties less than 20 years old, specific floor area limits based on family size, or restrictions against wooden apartments. These criteria must be met for the company to approve the property.
⑤ Are fixed-term leases allowed?
Fixed-term leases, which have predetermined durations (e.g., two or three years) with no renewal option, are often not allowed for corporate leases. This is because companies prefer not to incur additional costs for new contracts after a short period. Verify if fixed-term leases are permitted.
⑥ Must the landlord be a corporation?
Some companies require the landlord to be a corporation, which is more common with large apartment buildings but less so with smaller properties for single tenants. Confirm this restriction as it affects your property options.
Once you've applied to the General Affairs Department and confirmed the requirements, you can start looking for a property. Bring a copy or digital version of the corporate housing regulations. Since frequent visits might be challenging, especially if relocating, use platforms like SUUMO to find properties that meet the criteria and then contact the agent to discuss and prepare in detail. Due to the various restrictions, pre-select four to five properties that meet the requirements before visiting. Confirm with the company if a specific real estate agent must be used.
Generally, the employee fills out a preliminary application form. Since the contract will ultimately be in the company’s name, the official application is handled by the company representative or a corporate housing agency. Ensure to promptly inform the responsible person or agency to proceed with the formalities after the initial application.
The screening process differs significantly between corporate and individual leases. While individual contracts are based on personal income, corporate leases consider the company’s size and financial health. Prepare the necessary documents, such as:
Typically, the corporate representative or housing agency handles these documents, but the tenant should have personal identification and employee ID ready. Larger companies might have fewer documentation requirements than smaller ones, so confirm with your contact person.
The contract process for corporate leases differs from individual leases because the corporation is the leaseholder. Contracts are often mailed for signature, which takes more time than direct signing. Allow two to three weeks for the process. Plan your property search accordingly and consult with the real estate agent about any necessary explanations, like important details and restoration guidelines, which may need to be provided to the tenant.
For corporate leases, large companies often do not require guarantors. Nonetheless, confirm this with the real estate agent, as some landlords may still require one. Fire insurance might be in the tenant’s name or through a company-specified insurer. Review this requirement beforehand to avoid last-minute issues.
After the contract is finalized, you will receive the keys and can move in. The tenant usually collects the keys, and a signature might be required. Some properties specify moving companies or require advance notice of the moving date. Ensure to confirm these details with the real estate agent beforehand.
Please download the checklist from here >>
This concludes the explanation of corporate leases. The most important aspects are understanding the "Corporate Housing Regulations," which serve as the rulebook, and maintaining communication with the real estate company. Use a checklist to ensure you understand everything and prepare for a smooth move. If you are considering moving to the Tokyu Line area, please contact Balleggs. Our experienced staff will provide full support for corporate leases.
