What is the Residential Accommodation Business Act in Japan?

Table of Contents

• Overview of the Residential Lodging Business Act
• What is the Residential Lodging Business Act’s “Minpaku” (Private Lodging)?
• Reporting Requirements for Residential Lodging Business Operators

Overview of the Residential Lodging Business Act

The Residential Lodging Business Act, also known as the new “Minpaku” law, was enacted in 2018 (Heisei 30). There are three main reasons for the establishment of this law:

1. The increasing demand for “Minpaku” (private lodging) in Japan in recent years.
2. The need to address the diverse demands for private lodging.
3. The necessity to ensure public health, prevent disputes with neighboring residents, and curb the operation of unlicensed illegal lodgings.

In addition to these, a major factor in creating the law was to regulate the business to ensure the healthy spread of well-managed Minpaku. The term “Minpaku” had no official definition in law prior to the Residential Lodging Business Act. The term refers to the practice of using all or part of a residential property to provide accommodation services. There are also other types of Minpaku, such as those under the “Hotel Business Act” (Simplified Lodging), the “Special Zone Act for National Strategic Areas” (Special Minpaku in Special Zones), and the “Residential Lodging Business Act” (New Minpaku), which differ in terms of legal frameworks, criteria for accommodation days, and room size, as illustrated in the table below (a simplified version by Osaka Prefecture).

What is the Residential Lodging Business Act’s “Minpaku”?

This article will explain the three key aspects of the “Residential Lodging Business Act” (new Minpaku) in detail.

1. New Minpaku Reporting System: According to the Hotel Business Act, Minpaku business operators (residential lodging business operators) who offer lodging services must submit a report. The report should be submitted to the governor of the prefecture where the residence is located, which is the supervisory authority. However, in certain designated cities, core cities, and special wards, the local authorities may substitute for the prefecture to handle the report and regulation.
2. Limit on Operating Days: A significant feature of the Minpaku law is the limit on the number of operating days. The number of days a Minpaku service can be offered in one year cannot exceed 180 days. This limit is based on the assumption that the property is primarily used for residential purposes. The calculation of “one year” is defined as from 12:00 noon on April 1 of each year to 12:00 noon on the following April 1.
3. Roles of “Residential Lodging Business Operators,” “Residential Lodging Management Operators,” and “Residential Lodging Intermediary Operators”: The division of roles among these three types of operators is explained below. First, the “Residential Lodging Business Operator” can be classified into two types: “Owner-Occupied Type” and “Non-Owner-Occupied Type.” In the “Owner-Occupied Type,” the property is used as the owner’s primary residence, and the owner provides lodging services while living in the home. In contrast, the “Non-Owner-Occupied Type” refers to cases where the owner is not residing in the property or when the property is not the owner’s primary residence. When the number of rooms offered for lodging exceeds five in the “Non-Owner-Occupied Type,” the operator must appoint a “Residential Lodging Management Operator” to manage the property. The management responsibilities include ensuring cleanliness, preventing noise, addressing complaints, keeping a guest list, and securing personal belongings. In the “Owner-Occupied Type,” the operator is responsible for handling these matters themselves. Lastly, a “Residential Lodging Intermediary Operator” is an entity that provides reservation and payment services through the information provided by a “Residential Lodging Business Operator.”

Reporting Requirements for Residential Lodging Business Operators

As mentioned earlier, residential lodging business operators are required to submit a report to the local authority of the residence’s location. The report is submitted online through the Ministry of Tourism’s dedicated Minpaku system. The submission requires additional documents, as stipulated by ministerial ordinances. These documents typically include:

1. A floor plan of the residence.
2. A certificate of registration.
3. A subleasing agreement if the property is rented.
4. If the property is part of a multi-unit building (i.e., not a detached house), a copy of the neighborhood association’s agreement.

Additionally, “Residential Lodging Management Operators” and “Residential Lodging Intermediary Operators” must be registered with the Ministry of Land, Infrastructure, Transport, and Tourism or the Ministry of Tourism, respectively. These registrations are subject to supervision. To encourage compliance with legal requirements, the Residential Lodging Business Act sets penalties and regulations aimed at promoting the sound development of the Minpaku industry.