Real Estate Term:Key money

Key money is the mandatory gratuity paid to landlords or their real estate agents by the tenant before he or she can move into a property. The term "key money" applies almost exclusively to Japan, although property owners in other countries may require a similar premium.

In the United States, for example, it is common for a landlord to require the equivalent of one or two months rent as a security deposit to offset delinquent rent payments or damage to the property during occupancy. This deposit is normally refunded when the tenant moves out, less any repair costs. Some landlords, however, may charge spurious costs for nonexistent repairs.

In Japan, however, key money is non-refundable and often amounts to several times the monthly rent, totaling as much as six months or more. This practice is commonly despised by foreigners living in Japan and Japanese alike.

..

Real Estate Term::Key money Related Sites