Japan's 2026 Ryokan License Rule: Why an Architect's Signature Will Reshape the STR Market

A May 2026 government notice means most houses converted into licensed lodging now need an architect to certify that the building is legal. In our view, the era of the cheap kominka renovation is ending, and properties that have been properly brought up to code will become the core of the market.

1. The Bottom Line: Cheap Old-House Conversions Are on the Way Out

On May 28, 2026, Japan's Ministry of Health, Labour and Welfare (MHLW) and Ministry of Land, Infrastructure, Transport and Tourism (MLIT) issued a joint notice to local governments instructing them to confirm that a building complies with the Building Standards Act before granting a license under the Hotel Business Act (ryokan-gyo ho). This is not a change to the law itself. It is guidance from the national government to local authorities. But in our view, its practical impact is significant. If you convert a house into lodging and apply for a license, most detached homes will now need a certificate signed by an architect.

When an architect signs that certificate, they are putting their professional judgment on record that the building is legal. Our assessment is that very few architects will sign for a building that is still out of compliance. If a guest is injured or a fire breaks out because of a defect in the building, the architect who signed could be held responsible.

The result: the familiar entry route of buying an old kominka (traditional Japanese house), doing an inexpensive renovation and opening it as a guesthouse becomes much harder, and the supply of licensed lodging, especially in regional areas, will grow more slowly. In our view, the market will shift toward properties where owners have spent real money to make them fully legal. For anyone who already holds a license, or owns a property that has been invested in to meet the rules, this is a tailwind. For anyone planning to buy a cheap old building and get a license afterwards, it is a reason to rethink the plan. To be clear, this does not mean licensed lodging property in Japan has become impossible to buy.

This article is a follow-up to Japan's "Zero-Day" Minpaku Rules: Why Overseas Investors Should Focus on 365-Day Hotel Business Act Properties, where we explained why tighter day limits on minpaku (home-sharing) make year-round, Hotel Business Act licensed properties the ones to watch.

2. What Changed: The Notice in Brief

The notice covers cases where a detached house or an apartment building is converted to a hotel or ryokan use, including kan'i shukusho (simple lodging license, one of the Hotel Business Act license categories and the one commonly used for small, whole-house rentals, as defined in Article 2 of the Hotel Business Act), and a license is then applied for. This is called a change of use (yoto henko): changing the legal use of a building from "residence" to "lodging facility." When issuing the license, the hokenjo (public health center, the local government's health department that handles lodging licenses) will now ask for the documents shown in Figure 1 below.

Figure 1. Converting a house to licensed lodging after May 28, 2026

Source: MHLW/MLIT joint notice of May 28, 2026. The "not compliant" path reflects our assessment of how architects will act.

The 200 m² threshold below which no building confirmation is needed was raised from 100 m² by an amendment to the Building Standards Act that took effect on June 25, 2019 (see MLIT's 2019 press release). But not needing a confirmation procedure is not the same as not having to follow the law. The notice says explicitly that even at 200 m² or less, the building must comply with the Building Standards Act after the change of use.

In our view, most of the detached houses overseas investors buy as whole-house rentals are 200 m² or less, so for most of these buyers, the architect's certificate is what this change is really about.

Local government guides are already reflecting the change. Okayama City's lodging license guide states that a kensa-zumi-sho (certificate of completion inspection) issued when the building was a residence cannot be used in its place, and requires "a document prepared by an architect on the building's compliance status as a lodging facility." Kobe City's list of required application documents and Oita Prefecture's guide show the same split at 200 m². The reason is that a building that is legal as a home faces different standards, such as fire protection and evacuation, once it is used as lodging (see Article 87 of the Building Standards Act).

3. Why Architects Won't Sign Lightly

For an architect, this certificate is not "just one more form." It means staking their license on the statement "this building is legal as lodging."

Under the Architects Act, an architect who breaks the law or acts dishonestly in their work can face disciplinary action: a reprimand, suspension of up to one year, or revocation of their license (the provision is reproduced on Aomori Prefecture's page on disciplinary standards under the Architects Act). On top of that, in our view, if a fire or accident happens in a building they certified and the cause turns out to be a building defect, they could also face civil liability.

That is exactly why, in our assessment, architects will not sign until they have inspected the site, checked it against the drawings, and had any problems fixed. According to secondary sources, these surveys cover use, evacuation routes, fire protection, natural light and ventilation, and structure. A commentary by a gyosei shoshi (administrative scrivener, a licensed permit specialist) also notes that architects often require a survey or a design-and-supervision engagement as a precondition, and that they may refuse to certify older buildings or properties with past illegal extensions or alterations.

To put our view plainly: "Could you just sign it for now?" will not work. Assume that practically no architect will sign while illegal elements remain.

The older the building, the higher the bar. Even a kizon futekikaku building (a building that was legal when built but doesn't meet current standards) becomes subject again to some rules, including fire protection, natural light and ventilation, evacuation and interior finishes, once it is converted to lodging (Article 87 of the Building Standards Act). And according to an MLIT reference document on the building inspection system, only about 40% of buildings received a completion inspection and a kensa-zumi-sho in FY1998, a figure the document says has since risen to "about 90% today" (its chart runs only through FY2011). In other words, it is not unusual for an older property to have no kensa-zumi-sho at all.

4. What's Different From Before: Regional Areas Feel It Most

From what we see on the ground, until now it was not uncommon, particularly in regional areas, for the hokenjo to skip a detailed check of whether a building complied with the Building Standards Act. The notice itself asks local governments that already work with (or are considering working with) their building and fire departments to "continue" doing so, which suggests practice has varied from one municipality to the next.

Under the new notice, converting a house to lodging at 200 m² or less now requires an architect's certificate. This is not limited to old properties, but in our view, the older the property, the harder it is to get an architect to confirm it is legal and sign. From what we see on the ground, this practice has already begun in Izu, a popular tourist area. We expect it to spread to other popular destinations over time.

Figure 2. Before and after the notice (our view)

5. How the Market Will Change

Here is our view.

1. Supply will grow more slowly. The model of buying a cheap kominka and turning it into lodging with minimal work becomes hard to make work. With a higher barrier to new entry, the number of licensed lodging properties will grow more slowly, especially in popular regional tourist areas.

2. Fewer new competitors, but tougher competition. The properties that remain will be the ones whose owners spent properly to make them legal. There will be fewer of them, but each will meet a certain standard of safety and quality, so guests will choose on location, design and operating quality.

3. Upfront costs will rise. Surveys, design work, and fire-protection and evacuation works all cost money. Costs and timelines vary widely with the condition of the building, and there is no official benchmark. But the older the property, and the more it lacks drawings and a kensa-zumi-sho, the more you should budget for overruns.

4. Legal, licensed properties will gain value. Minpaku is already capped at 180 days a year under the Housing Accommodation Business Act, and local governments have been adding their own restrictions (see STR Regulatory Tightening Across Tokyo's 23 Wards for Tokyo, and our previous article for moves in Shinjuku and elsewhere). That narrows the room to operate, and switching to a Hotel Business Act license now means clearing the architect's certificate hurdle. As a result, properties that already hold a license and can document their legal status become scarcer, and are more likely to be valued accordingly when sold.

6. What Investors Should Do

Figure 3. Which properties to buy (our view)

Even with an already-licensed property, the route matters. Under the Hotel Business Act, in a business transfer the seller and buyer can obtain approval for the buyer to take over the operator's status. But if you buy only the property and apply for a new license, we expect the new documents will be required (this is our inference). Check with the hokenjo which route applies before you proceed.

Before buying, check these four things:

1. Documents: Is there a kensa-zumi-sho, a kakunin-zumi-sho, drawings, and records of past renovations? Even for buildings without a kensa-zumi-sho, MLIT has published guidelines on how to survey a building's compliance status.
2. A preliminary survey by an architect: Before signing the contract, have an architect inspect the property and confirm whether a certificate is likely, and what works and costs would be needed. Zoning and road-frontage requirements can also become issues when converting to lodging.
3. Early consultation with the authorities: Talk to all three: the hokenjo, the building guidance division (the department in charge of the Building Standards Act), and the fire department. A fire-safety compliance notice (shobo horei tekigo tsuchisho) is also requested in connection with a Hotel Business Act license application.
4. Contract terms: Negotiate a clause allowing you to cancel without penalty if the license or the architect's certificate cannot be obtained, enough time for surveys, and handover of all documents.

Tax and legal judgments, and whether specific contract clauses are enforceable, depend on individual circumstances. Always confirm with qualified professionals such as lawyers, gyosei shoshi and architects.

7. Summary: From "Start Cheap" to "Invest Properly"

This notice is not a signal to stop investing in licensed lodging property in Japan. What it means is that the "start cheap, recoup fast" model will work less often, and the market will reward properties that have been invested in to be fully legal. Our view that year-round Hotel Business Act properties deserve your attention hasn't changed. What changes is the starting point: not "buy it because it's cheap," but "buy a property that is legal and can get, or already has, a license."

For the full buying process, see Practical Process for Foreign Investors Buying, Operating, and Selling Real Estate in Japan, and for a comparison of new builds, renovated existing homes and ryokan M&A, see New Build, Renovated Existing Homes, or Ryokan M&A.

The Room sells and operates whole-house rental properties in Hakone, the Fuji Five Lakes and Tokyo, built around a year-round Hotel Business Act license. From purchase support that checks legal compliance and licensing prospects first, to reliable operations once the license is in hand, we help overseas investors avoid getting caught up in local procedures.

This article is for general information only and does not constitute an opinion on whether a specific property can obtain a license, nor legal advice. For decisions on a specific property, please consult qualified professionals and the relevant public health center, building guidance division and fire department.