Tenancy Rights, Housing Contracts, And You (Part II)

Sep 29, 2015

(Note: Please understand that the article of this author is not a lawyer, but is using their understanding and research to apply their interpretation of the law to these issues.)


If an employee is “fortunate” enough to have most of their initial housing issues solved by allowing their employer to locate a residence for them, the employee will often find themselves in possession of a seperate “housing contract” that has been providing by the company, rather than the landlord or realtor.

These “housing contracts” are often filled to the brim with convoluted legalese that sets out a number of demands and conditions that an employee is expected to adhere to, along with an equal number of clauses that effectively seek to undermine an employee’s tenancy rights and protections.

We will look at some of these “housing contract” clauses in more detail in a later article, but for now let’s explore a term that frequently appears in “housing contracts” like this: “Company Housing”.


In Japan, “Company Housing” (社宅 – shataku) specifically refers to residences that are provided to an employee by an employer as a perk of working for that company.

For a company, shataku can be a wise investment in order to attract more workers (and their families) to the area in which your company is located, as well as provide them with a certain standard of living.

Shataku are often heavily subsidized by the company, with low-rent and contributions to utilities and services presenting themselves as very attractive deals for new workers.

After all, not only does the new employee not have to worry about finding a place to live if they decide to move to a new city, they will also get a portion of their rent (and utilities) paid for them, and even their furniture provided for them.

In addition, maintaining shataku also allows a company to transfer workers from one part of the country to another without putting too much of a strain on an employee or their families (at least in regards to residence conditions).

The downsides to shataku are that the employee’s freedom to pick and choose where they want to live is somewhat restricted to whatever the company can provide.

Furthermore, the property belongs to the company, rather than the employee, which removes a layer of security from the employee’s living conditions.

Finally, shataku might also be populated by other employees from the same company, meaning that any drama at the office has the potential to follow you home.

A good example of shataku is the “Board of Education” housing that is provided for teachers who arrive in Japan as part of the JET program. The condition of Board of Education provided shataku has been especially contentious in Takatsuki city, where the poor conditions of residences provided to AETs have sparked a far greater legal issue.

Regardless, the key aspect of shataku company housing is that the building is OWNED by a company, with the company then providing various amenities and subsidies to an employee that a normal rental agreement with a realtor or landlord would not provide.

So, how does this relate to a “housing contract” that a dispatch company might give to an ALT?


For many people who subcontract with a dispatch company that has also “provided housing”, the employee is fully expected to pay any and all starting deposits, residence insurance, rent, services, utilities, and various other charges (such as association dues) that may come their way while they are a tenant of the building that the company has placed them in (ostensibly for the duration of their employment contract).

In addition, the dispatch company will often act as an intermediary between the tenant and the landlord, automatically deducting rent and other fees from an employee’s salary to give to the landlord on a per-month or per-fee basis (and often without the consent of the employee, which is actually illegal in and of itself).

However, even though the dispatch company is not paying anything towards the rent of their employee’s residence, and even though the employee actually does have a contract with the building’s landlord, realtor, or both, the company will maintain that the residence in which the employment lives is “company housing”, and that the company has the right to evict the tenant (among other things) at a moment’s notice.

In reality, the residence in which the employee resides is not shataku at all, and therefore not “company housing” in the spirit that the term is understood in Japan.

In fact, the employer is little more than the employee’s guarantor, having promised the landlord/realtor that they will absorb all of the fees and damages that may occur if the employee does not fulfil their housing lease contractual obligations.

However, the company wishes the tenant to believe that the residence in which they are living is “company housing” because this makes things much easier for an employer – especially of the employee is ignorant of their tenancy rights.


In many situations, companies (such as haken shain dispatch companies) will maintain apartment leases for two reasons: one, they’re conveniently located near to the schools for which those companies have a contract with the Board of Education, and two, they don’t actually have pay anything to maintain those locations.

If an ALT decides to leave the company for whatever reason, it is common practice for the company to have one person move out, and then another person move in a day or two later.

The legality of this method is a concern for the landlord and the company, but it is clear that the actual tenants are the party that loses the most in this agreement.

So, why do these companies lie with their (almost entirely fictitious) “housing contracts” and assertion that the residences are “Company Housing” that they own?

The simple answer is “manipulation”.

The company needs to manipulate and trick employees (or former employees) to facilitate the reasons that were stated in the opening paragraph of this section. If one employee resigns, it is in the company’s financial interests to recycle that employee’s residence as soon as possible.

If the company has to go through a lengthy legal battle (via  a landlord, which they can’t really influence) to evict a former employee from their residence, that same company now has to find an entirely different place for their new employee to live.

It is far easier to just lie to an employee and tell them that they have to vacate on the same day that their employment contract expires than admit that they have no legal right to evict them.

There are situations where a company may be sub-letting an apartment or residence to an employee, but in these situations an employee will be paying rent directly to the company, not to the landlord via the company.

Even if these sub-letting conditions exist, the company still does not own the residence per se, and the rights of the tenant are still protected by law.


In conclusion, here are the points of consideration that we can take away from this article:

• Shataku means “Company Housing” (and vice-versa).
• Shataku are buildings that are owned by a company.
• Shataku are characterized by company-provided subsidies and other amenities.
• Residences provided by haken shain dispatch companies are usually not shataku.
• Dispatch companies are often only acting as “Guarantor” for the employee.
• Dispatch companies will use the term “Company Housing” erroneously.
• Housing contracts are often worded in such a way as to mislead and intimidate the tenant.
• Many housing contracts clauses and regulations are invalid.
• A company cannot legally force a tenant to vacate their residence.

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