Demonstration Plan under the Regulatory Sandbox Scheme Approved

August 6, 2020

The Ministry of Economy, Trade and Industry (METI) newly approved a Demonstration Plan of New Technologies (hereinafter referred to as the “plan”) involving “demonstration for preparation of written contracts for fixed-term building lease involving monthly apartment rental businesses by making use of an electronic contract system,” which will be conducted by gooddays holdings, Inc. This is the ninth plan approval by METI under the Regulatory Sandbox Scheme.

Utilization of the Demonstration Scheme for New Technologies (Regulatory Sandbox Scheme)

Under the Act of Special Measures for Productivity Improvement, which entered into force on June 6, 2018, the Demonstration Scheme for New Technologies (so-called “Regulatory Sandbox Scheme”), was established to encourage companies to take advantage of new technologies or business models to promote business activities. As one of the efforts for promoting regulatory reforms, this scheme aims to: develop environments in which businesses are able to swiftly conduct demonstrations of new technologies and business models through limiting participants or test periods without being subject to the application of the existing regulations; and make available information and documentations as outcomes of such demonstrations so as to promote regulatory reform.

Under this scheme, a party who intends to embark on a demonstration of new technology should prepare a Demonstration Plan of New Technologies and submit the plan to the competent ministers (the minister with jurisdiction over businesses developing new technologies and the minister with jurisdiction over the regulations). After receiving the plan, the competent ministers should determine whether or not to approve the plan in consultation with the Innovative Technology/Business-model Evaluation Committee. As for the plan that gooddays holdings, Inc. has submitted, the Minister of Economy, Trade and Industry serves as the minister with jurisdiction over the businesses developing new technologies, while the Minister of Justice serves as the minister with jurisdiction over the regulations.

Outline of the company’s plan and approval thereof

Concerning a contract for fixed-term building lease (hereinafter referred to as a “fixed-term lease contract”), which must be concluded in writing under the Act on Land and Building Leases, this plan aims to demonstrate whether or not a written original contract prepared and printed by electronic means for a fixed-term lease contract prejudices the interests of the lessee which are protected by the Act.

Specifically, gooddays holdings, Inc. (applicant) will focus on a fixed-term lease contract between a monthly apartment rental business (lessor) and a resident (lessee) and it will confirm whether or not the lessee is able to fully understand the details of the contract if the lessor issues an original of the written contract by an electronic contract system which is provided by the applicant, in comparison with the case where contract procedures are completed only by written documents. Moreover, as a secondary effect, the applicant will confirm whether or not utilization of fixed-term lease contracts is further encouraged by prior explanations via video conference or other online means. Under the Regulatory Sandbox Scheme, this is the first approval of such plan for utilization of an electronic contract system in the field of the Act. For details, see the Appendix.