JAPAN Law and Practice Contributed by: Satoru Hasumoto, Takahiro Sato and Fuyuki Uchitsu, Mori Hamada
• an asset manager who is a registered investment manager under the Financial Instruments and Exchange Law and a licensed real estate transac - tion business provider with a discretionary agency permit under the Real Estate Transaction Business Law;
• Land leases relating to land on which a building is built for business or residential purposes and that have a term of at least 50 years are not renew- able and must be executed in writing and will be a fixed-term lease. • Land leases relating to land on which a building only used for business purposes (ie, not for resi - dential purposes) is built and that have a term of at least 30 years but under 50 years are not renewa - ble and must be executed by way of notarial deeds will be a fixed-term lease. • Land leases relating to land on which a building is only used for business purposes (ie, not for resi - dential purposes) are built and that have a term of at least ten years but under 30 years are not renewable and must be executed by way of notari - al deeds (a “Category 3 fixed term land lease”). A “fixed-term building lease” is also available. This lease must be in writing and is not renewable, mean - ing it will terminate upon the expiry of the lease term. 6.3 Regulation of Rents or Lease Terms General Lease In a general lease for land or buildings, lease terms that are contrary to or reduce certain statutory protec - tions or rights granted to the tenant under the Land Lease and Building Lease Law are void. Several of these statutory protections and rights are outlined below. • The lessor must have a justifiable reason to refuse a renewal of the lease. • The tenant may demand a rent decrease in response to market conditions and cannot be deprived of the right to demand a decrease in rent, even if they explicitly agree not to exercise that right. • In the case of a land lease, the leasehold interest in the land is perfected without registration if the land tenant owns a registered building on the leased land. • In the case of a land lease, the land tenant has the right to request that the landlord purchase the building upon termination of the land lease. • In the case of a building lease, the leasehold inter - est in the building is perfected without registration if the building is delivered to the tenant.
• an asset custodian; and • an administrative agent.
6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time Leases are the most common arrangements by which another person’s land or building can be used, but superficies ( chijo-ken ) are a common alternative. The purpose of a lease is not limited and leases are available for both land and buildings. In contrast, superficies are only available for land to own build - ings or trees. In general, holders of superficies are in a stronger position than leaseholders vis-à-vis the landowner, as they hold a “real right”. For instance, the landowner owes the superficies holder a duty to co-operate in the registration of the superficies that is required for perfection, but the lessor does not owe such a duty to the tenant. 6.2 Types of Commercial Leases There are two types of land or building leases based on the lease term: a general lease and a fixed-term lease. A general lease is subject to renewal, which the les - sor is only entitled to refuse when there is a justifiable reason, taking the lessor’s and the tenant’s respective needs to use the property, the history of the lease, the present use of the property and the amount of com - pensation being offered by the lessor to the tenant to vacate the property into account. A fixed-term lease allows for three alternative arrange - ments for land leases as outlined below.
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