Case: court acknowledged the validity of cancellation based on 2 months’ non-payment and not supplying a shortage of the deposit

  • Tokyo District Court acknowledged the validity of cancellation of building lease contract based on 2 months’ non-payment and not supplying a shortage of the deposit.

Parties of the Case

  • Yodobashi Camera Co., Ltd. (lender) vs. Ken Soft Co., Ltd. (tenant)

Claims

  • Claim to surrender building based on cancellation of building lease contract

Location and Purpose of Use of the Building

  • Two rooms of a office building in Tokyo

Rent

  • room-1: 2,660,679 yen per month (exclusive of tax)
  • room-2: 910,560 yen per month (exclusive of tax)

Circumstances

  • Mizuho Bank Co., Ltd. lent two rooms to the lessee. Yodobashi Camera co., Ltd. bought the building and succeeded the position of the lender of the rooms.
  • As the tenant did not pay the rent for around two months, the lender appropriated the deposit to the unpaid rent.
  • The tenant also delayed payment of the rent for another two months.
  • The lender demanded to supply the shortage of the deposit and to pay two-months’ unpaid rent within 14 day. As the tenant did not pay them, the lender cancelled the lease agreement.
  • The tenant paid the most part of the demanded amount one day after the cancellation.
  • The court judged that shortage of the deposit can be deemed similar to unpaid rent as the shortage occurred because of the tenant’s non-payment of the rent, and that particular circumstance does not exist that the non-payment does not dissolve the relationship of mutual trust between the parties of the lease agreement.

Comment

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