Separation from Employment and Company Dormitory

2025/05/02 BLOGAttorney Tawara Kojiro

Hello, this is TAWARA Cristóbal Kojiro, attorney-at-law.

Many of my clients are foreign nationals, and some of them live in company-provided dormitories. Occasionally, I receive consultations from individuals who are struggling after being told they must vacate their dormitory immediately upon resignation. Conversely, I also receive inquiries from companies asking when they should require an employee to vacate the premises after resignation.

 

1. Whether the Arrangement Constitutes a Lease Agreement

The starting point of the analysis is to determine the nature of the arrangement under which the employee is permitted to use the premises. Depending on the specific circumstances, Japanese courts have ruled as follows:

In some cases, the arrangement was considered a lease agreement (Supreme Court decision dated November 16, 1956).

In other cases, it was deemed a special contractual relationship distinct from a lease agreement, whereby the right to use the premises was limited to the period during which the individual maintained their status as an employee (Supreme Court decision dated November 26, 1954).

As a rough guideline, if the fee paid for the use of the dormitory is comparable to ordinary rent, the arrangement tends to be viewed as a lease agreement. On the other hand, if the fee is set significantly lower, it is more likely to be seen as a special arrangement that is not a lease.

If it is considered a lease agreement, the provisions of the Act on Land and Building Leases (Shakuchi-Shakkai-Hō) will apply, providing considerable protection to the resident even after resignation.

Conversely, if it is not deemed a lease agreement, the employee’s right to reside in the dormitory generally ceases once they lose their status as an employee (naturally, the terms of any applicable agreements or internal regulations would govern if such documents exist).

It is worth noting that if the employee was wrongfully dismissed or coerced into submitting a resignation, there may be grounds to argue that they have not lost their employee status, and therefore, they may continue to have the right to reside in the dormitory.

 

2. Recommendation to Seek Legal Consultation

In any case, because each situation must be assessed based on its specific facts and documentation (such as contracts and internal regulations), it is highly advisable for both employees and companies facing such issues to seek advice from a qualified attorney.

 

3. Recommendation to Prepare Contracts and Regulations

Finally, for companies, it is advisable to prevent future disputes by preparing clear contracts and internal regulations that specify the procedures and deadlines for vacating the dormitory upon resignation.