Some people may consider canceling their rental application for various reasons, such as finding a new property or unavoidable circumstances.
This time, we will go over if is possible to cancel after applying for a rental property and what you need to know about cancellation. This is a guide for those who wish to cancel their rental application after already applying.
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Until When Can I Cancel After Applying?
It is possible to cancel an application even after applying for a property and passing the tenancy screening up until the signing of the contract. Moreover, you can refuse to sign if you proceed to the contract phase after passing the screening and find something in the contract that you disagree with.
A real estate company typically completes a contract when you sign or stamp your seal to the rental agreement. So, once the contract is signed, it cannot be canceled. Or, in the event the landlord and tenant have agreed to a contract, even if the rental agreement is not signed and stamped, this is considered a consensual contract based on a verbal agreement.
Furthermore, in some cases, after passing the screening, a contract is completed when the applicant expresses their intention to start the move-in procedures. The timing for when a contract is concluded varies depending on the real estate company, so it is a good idea to check the details regarding the conclusion of a contract at the time of application.
Is There a Penalty for Cancellation?
There is basically no penalty for canceling before completing the application and screening. Since these things are at the stage before contract completion, it is usually possible to cancel without fees or penalties.
However, in some cases, if the contract was deemed concluded even before signing based on the agreement between the landlord and tenant, there may be a penalty fee. Please note that if the rental contract is concluded, this is considered a termination, not a cancellation. Penalties depend on the contract, so check with your real estate company for more information.
If it is a cancellation, some initial fees will be refunded. It is especially difficult to refund brokerage fees and key money. The brokerage fees pay for property information and contract proceedings with the real estate company. The key money is the fee to thank the landlord for renting out the property.
You pay these fees once you sign the contract, regardless of moving in, so they will not likely be refunded.
Will I Receive a Refund for my Application Deposit?
The real estate company holds onto your application fee (or deposit), which ranges from 10,000 yen to one month’s rent until the contract is completed. It is usually fully refunded in the event of cancellation.
Since real estate companies spend time and effort screening and preparing explanations of important matters, there are cases where they may claim that the application deposit cannot be refunded.
However, not refunding the application fee is prohibited under the Construction Regulations of the Real Estate Transaction Business Act, so if you clearly tell them that you are canceling and will not contract, you will likely receive a refund.
Please get in touch with the following support departments if your application fee is still not refunded. Include the real estate company’s name and the nature of the problem when you consult, as this will help ensure smooth communication.
- National Consumer Affairs Center
The National Consumer Affairs Center of Japan has a specialized support department that responds fairly and accepts complaints and consultations regarding all aspects of consumer life. Free consultations are available at the consultation counters set up in each prefecture or by calling the Consumer Hotline at 188.
- National Federation of Real Estate Transaction Associations
The National Federation of Real Estate Transaction Associations (NFRETA) has a help desk where specialized consultants work with all housing warranty members to resolve complaints. Real estate associations are nationwide, so you can get a free consultation at your local association’s help desk or over the phone.
- All Japan Real Estate Association
At the All Japan Real Estate Association, experienced consultants provide telephone consultations to ensure safe and secure real estate transactions. However, there is a time limit for telephone consultations, so try to summarize the main points in advance. As a general rule, consultations are limited to one time per case.
Reference: All Japan Real Estate Consultation Center
Common Reasons for Cancellation
Let’s go over some reasons for canceling after starting a rental application and how to deal with them.
・There were other good properties
Suppose you find a property you like and have applied for but find a property with better conditions, such as a larger room, lower rent, or closer proximity to the station. In that case, you may feel inclined to cancel your application. If you wish to cancel, contacting the real estate agent to confirm the cancellation of the property you are applying for is best. Then, check with the real estate agent to see if you can apply for another property.
・My place of work has changed
You may need to cancel for unavoidable reasons, such as work transfers that require longer commuting times. Cancellations that are due to outside factors are beyond your control. Be honest and tell them that you need to cancel the rental application due to work commitments.
For women living alone for the first time, even if they like the property, there are many cases in which they request cancellation due to poor security or unsafe conditions. If your family may object, it is better to get their consent before applying, for instance, through searching for properties and/or viewing them together.
・The initial costs were higher than expected
Some people cancel because the initial cost is more than expected. If you are worried about money, you can have peace of mind if you tell your real estate agent your budget before applying. Also, if you don’t want to spend too much on initial costs, it might be a good idea to find a property that doesn’t require a security deposit or key money.
If You Wish to Cancel Your Application, Notify Your Real Estate Agent ASAP So That They Can Get in Touch With the Landlord!
Your landlord or real estate company may be preparing for a house cleaning or inspection to help you move quickly. Therefore, if you wish to cancel your rental application, it is essential to contact your real estate agent as soon as possible.
Note that the cooling-off period to cancel a contract does not apply if a rental contract has been concluded. In real estate, a cooling-off system is applied to contracts that meet certain standards for purchased and sold properties. So, please be aware that if you cancel after the rental contract has been signed, the contract will be canceled, and you may incur fees.
You can cancel after starting the rental application process. That said, the timing for the conclusion of the contract differs depending on the real estate company. So, if you wish to cancel, consult your real estate company immediately.
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