Case016: court acknowledged the validity of cancellation based on 2 months’ non-payment

C O N T E N T S

Judgement of the Tokyo District Court on July 1, 2016 (Case Number: 2015-WA-12874)

Tokyo District Court acknowledged the validity of cancellation of building lease contract based on 2 months’ non-payment.

Smart Lender Co., Ltd. (lender) vs. Yamada Provide Co., Ltd. (tenant) and Hair Dimension Holdings Co., Ltd. and Hair Dimension Co., Ltd. (joint sureties)

In the lease contract, there was a special clause providing that the lender can cancel the contract without any demand if the tenant fails to pay the rent twice or more.
When the tenant did not pay the two-months’ rent, the lender demanded to pay unpaid rent within 5 days, and manifested conditional intention to cancel the contract if the tenant did not pay that within the period.
As the tenant delayed payment, the lender demanded eviction based on cancellation of the lease contract.
The tenant surrendered the building, but argued that the relationship of mutual trust between the lender and the tenant had not been dissolved because the amount of unpaid rent was not large and that cancellation of the lease contract was invalid.
The court denied the tenant’s allegations and acknowledged that the lease contract was validly cancelled based on two months’ non-payment of the rent.

This is one of the cases that cancellation of building lease contract based on two months’ non-payment was acknowledged.

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