Short answer: in a normal Japanese house sale you pay a deposit called tetsuke (手付) when you sign. Under the Civil Code (Art. 557) this deposit works as a cancellation option: until the other party has started to perform the contract, the buyer can cancel by giving up the deposit, and the seller can cancel by paying back double. So the realistic cost of changing your mind after signing is the deposit, not a free exit, and the option ends once either side begins performing (for example, when you pay the balance or the seller starts the handover). Many akiya are sold by private individuals "as is", so the stronger protections that apply to sales by licensed real estate dealers often do not apply. Read the contract, and the important matters explanation, before you pay anything. A $49 Akiya Check report helps you find lot-level risks before you sign; the free checklist lists the questions for the agent.
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In a Japanese real-estate purchase there are generally three money steps: a small application or reservation (申込証拠金, sometimes returned if the deal does not go ahead), a deposit at contract signing (手付金), and the balance at settlement and handover (残代金). The deposit is normally a percentage of the price, and in practice is credited toward the price at settlement. The legal nature of the deposit matters more than the amount. Unless the contract says otherwise, a deposit is treated as a cancellation deposit (解約手付). Article 557 of the Civil Code (e-Gov) says:
What counts as "beginning to perform" is decided by courts case by case. Paying the balance, handing over registration documents, or a seller who has taken a significant step in preparing to transfer the property can be seen as performance. The practical point is that the deposit option is time-limited, and the contract itself usually sets a date (手付解除期日) after which the deposit option ends. Check that date. Ask the agent to explain it in writing.
This is where akiya buyers get surprised. The Real Estate Brokerage Act (宅地建物取引業法) sets protections for buyers, but several of them apply only when the seller is a licensed real estate dealer (宅建業者) and the buyer is not:
| Topic | Seller is a licensed dealer | Seller is a private individual (typical for akiya) |
|---|---|---|
| Size of the deposit | Deposit capped at 20% of the price (Art. 39) | No statutory cap; set by agreement |
| Penalty for breach | Liquidated damages plus penalty capped at 20% of the price (Art. 38) | No statutory cap; set by agreement |
| Seller's liability for non-conforming house | Cannot be made worse for the buyer than the Civil Code, except that a notice period of two years or more from delivery may be agreed (Art. 40) | Can be shortened, limited, or excluded by agreement ("as is") |
| Agent's explanation of important matters | Required of the agent in all cases (Art. 35) | Required of the agent in all cases (Art. 35) |
The dealer-seller rows follow the Act itself. Article 40 says that a dealer-seller may not agree terms that are worse for the buyer than the Civil Code provision, other than a notice period of two years or more from delivery (e-Gov). Article 39's 20% limit and article 38's liquidated-damages limit should be read in the e-Gov text too before you rely on them. For an akiya sold by an individual owner or by heirs, treat these protections as absent. The agent's duty to explain important matters (Art. 35) still applies; see our guide to the important matters explanation.
Since the 2020 Civil Code reform, a seller who delivers a property that does not conform to the contract (in type or quality) can face the buyer's claims for repair, price reduction, damages or cancellation. The buyer must notify the seller within one year from the time they learned of the non-conformity, or lose those claims, except where the seller knew of the problem at delivery or was grossly negligent in not knowing (Art. 566; e-Gov). That is the default. For individual sellers of old houses, contracts commonly replace it with a short period, such as a few months, or exclude the seller's liability entirely.
Two consequences. First, a clause that excludes liability does not rescue a seller who knowingly hid a defect; the Civil Code exception for sellers who knew still applies, as do duties of the agent to explain what they know. Second, you should assume that after settlement you carry the risk of what you did not find before signing. That is why pre-contract due diligence matters more than post-contract remedies. Practical steps:
The contract may set a cancellation deadline, and either side's performance also ends the option. If you plan to pay the balance early, or to let the seller begin work (clearing the house, demolition, land survey), ask the agent whether this could close your deposit option. A deposit option you thought you had may already be gone.
Cancelling with the deposit is a right under the contract and the Civil Code. Walking away without using it, or failing to pay on the due date, is a breach, which can trigger a penalty clause (違約金) and damages claims. Ask what the penalty is and when it applies. For dealer-sellers, Art. 38 caps it; for individuals, it is whatever the contract says. Do not stop paying and assume you will lose only the deposit.
A verbal promise by the agent or seller is not a substitute. Clauses buyers commonly ask for include:
Not yet signed? The cheapest place to find a problem is before the deposit. Get the official zoning, hazard and market data for the exact lot, plus the questions to send the agent, in one Akiya Check report.
Get a $49 risk report Get the free 12-point checklistNot as a right, in the usual case. If the deposit is a cancellation deposit and the other side has not begun to perform, you can cancel by forfeiting it. A refund is expected only where the contract allows cancellation without loss, for example under a loan clause or another special clause.
Under the same Civil Code rule, the seller can cancel by returning double the deposit, again only before the other side starts performing. Ask the agent to explain this option when you pay.
No. The Civil Code and the Real Estate Brokerage Act apply to buyers regardless of nationality. There is no general cooling-off period for house purchases, and whether a statutory cooling-off right applies in a particular case depends on the seller being a dealer and where the contract was signed, so ask the agent.
It means you accept more risk after settlement, so the checks you do before signing matter more. It is common for akiya and not illegal. Ask for the seller's known-defects disclosure and for time to inspect.
See how to check a house in Japan before buying, questions to ask the agent, can foreigners buy akiya and all guides.
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Get a $49 risk report Free 12-point checklistThis guide is general information based on public sources cited above. It is not legal, tax, or real-estate brokerage advice. Confirm every item for a specific property with the agent, the municipality, and licensed professionals.