What Is a “Certificate of Inspection” for Ryokan Business Licensing? What If You Don’t Have One?

“I want to buy a used detached house, renovate it, and obtain a ryokan (hotel/inn) business license.”

“I want to convert a vacant building I own into a hotel.”

With the recovery of inbound tourism demand, we’re seeing a surge in consultations like these. However, many owners run into a “massive wall” right before signing a property purchase contract, or when consulting with the public health center.

That wall is whether or not a “Certificate of Inspection” (kensa-zumi-sho) exists.

Let’s start with the conclusion of this article.

When obtaining a ryokan business license (especially for properties with a total floor area exceeding 200㎡), a **Certificate of Inspection is, in principle, mandatory.** Without it, the confirmation application for a change of use won’t be approved, and you won’t be able to legally begin operating.

However, it’s too early to give up.

Even if you don’t have the Certificate of Inspection on hand, there are cases where a path to licensing can still open up—for example, by substituting a **”Certificate of Ledger Records” or conducting a “Legal Compliance Status Survey by a First-Class Architect.”**

In this article, we’ll explain—from a professional perspective and in easy-to-understand terms—everything from the basics of the “Certificate of Inspection” (arguably the biggest hurdle in ryokan licensing), to what to do if it’s been lost, to recovery strategies for properties where the certificate simply doesn’t exist.

What Exactly Is a “Certificate of Inspection”?

First, let’s cover the basics. In a nutshell, a Certificate of Inspection is like a **”diploma” issued by the government, certifying that “this building was completed in full compliance with the laws in effect at the time of construction.”**

The process of constructing a building generally proceeds through the following three steps:

1. Building Confirmation Application (before construction begins): You submit an application saying, “We will build according to these plans,” and receive approval (issuance of the Confirmation Certificate).
2. Construction & Interim Inspection: The actual construction takes place.
3. Completion Inspection (after construction): The building undergoes inspection to confirm it was “completed according to the plans,” and passes (issuance of the Certificate of Inspection).

In other words, having a Certificate of Inspection means the building has official government endorsement stating “this is not an illegal structure.” Conversely, a building without one raises suspicions such as “we can’t confirm it was built according to the plans” or “it may have been extended without authorization.”

Why Is This Required for a Ryokan Business License?

You might think, “It’s been fine as a regular residence so far, so what’s the problem?”

However, starting a ryokan business means changing the building’s use from “residence” to “lodging facility (special-use building).” Under the Building Standards Act, this is called a **”change of use.”**

Since ryokan and hotels are used by an unspecified large number of people, they are held to stricter safety standards than ordinary residences.

Under the rules of the Ryokan Business Act and the Building Standards Act, if the floor area used for the ryokan business exceeds 200㎡, a confirmation application for change of use must be filed. And the fundamental prerequisite for filing this application is that “the existing building is legally compliant (i.e., that a Certificate of Inspection exists).”

*Following a 2019 legal revision, the threshold requiring a change-of-use application was relaxed from over 100㎡ to over 200㎡.

Can’t Find the “Certificate of Inspection”! Two Possible Scenarios

It’s not unusual to search through a property’s documents only to find that the Certificate of Inspection is nowhere to be found. This is especially common with older properties.

Even though it may seem like a simple case of “not having it,” there are actually two very different scenarios, depending on the circumstances.

Scenario 1: It Was Issued in the Past, But Has Been Lost (Just Missing Paperwork)

This is the case where a completion inspection was conducted and a Certificate of Inspection was issued when the building was completed, but the original paper document was lost over the years—perhaps through changes in ownership or repeated moves.

In this case, resolving the issue is relatively straightforward.

Scenario 2: The Completion Inspection Was Never Conducted in the First Place (Never Issued)

This is the more serious case.

In fact, in Japan before 1998 (Heisei 10), the rate at which buildings underwent completion inspections was extremely low—at its worst, less than half of all buildings were ever inspected. There was a prevailing mindset at the time of “once it’s built, it’s done.”

In this case, the Certificate of Inspection never existed to begin with. Naturally, it cannot be reissued either.

Solution ①: If Lost, Obtain a “Certificate of Ledger Records”

If you’re dealing with Scenario 1 (lost certificate), or if you’re not even sure whether one was ever issued, your first step should be to visit the relevant government office (such as the Building Guidance Division).

There, request the issuance of a **”Building Plan Summary” or “Certificate of Ledger Records.”**

If the government’s database (ledger) contains a record such as “Certificate of Inspection issued on [date], Certificate No. XX,” you can obtain this “Certificate of Ledger Records” and use it as a substitute for the original Certificate of Inspection.

This allows you to prove the building is legally compliant, enabling you to proceed with the ryokan business license application and the change-of-use procedures. This is the smoothest resolution path available.

Solution ②: If Never Issued, Conduct a “Legal Compliance Status Survey”

The problem arises with Scenario 2 (never inspected)—when even the government’s ledger shows no record of a Certificate of Inspection ever being issued.

In the past, this would have been a dead end. Today, however, thanks to guidelines from the Ministry of Land, Infrastructure, Transport and Tourism, a relief measure is available.

That relief measure is the **”Legal Compliance Status Survey by a First-Class Architect.”**

The Survey Process and How It Works

Simply put, this method involves **”having a present-day architect conduct a detailed investigation to certify safety, in place of the original inspection.”**

1. Document Collection: Gather drawings and past records.
2. On-Site Survey: A licensed architect visits the site and conducts a professional survey of the building’s tilt, concrete strength, structure, and other elements.
3. Report Preparation: A report is prepared certifying that “this building complies with the laws in effect at the time of construction.”
4. Submission: This report is submitted in place of the Certificate of Inspection, and the change-of-use application proceeds from there.

This opens a legal path to starting a ryokan business, even for properties without a Certificate of Inspection.

However, There Are Costs and Risks Involved

This survey isn’t just a matter of preparing documents. It often involves actually removing portions of walls to inspect the interior and using specialized equipment, which can result in survey costs ranging from several hundred thousand to over a million yen.

There’s also the risk that the survey could reveal issues—such as illegal extensions or insufficient seismic resistance—requiring costly renovation work, or even resulting in the license being denied altogether.

Is a Certificate of Inspection Unnecessary If the Property Is “200㎡ or Under”?

This raises a question that many people have.

“Since the 2019 relaxation means properties of 200㎡ or under no longer require a change-of-use confirmation application, doesn’t that mean the Certificate of Inspection is unnecessary too?”

The short answer is: **”It’s not required procedurally, but it’s still essentially necessary (proof of safety is mandatory).”**

The Double Check of the Building Standards Act and the Ryokan Business Act

It’s true that for properties of 200㎡ or under, the “change-of-use confirmation application” procedure under the Building Standards Act is not required. As such, you won’t be asked to submit a Certificate of Inspection at that particular counter.

However, it would be premature to feel relieved at this point.

The public health center, which issues ryokan business licenses, requires **”compliance with the Building Standards Act”** as a condition for granting the license.

Just because the application procedure is no longer required doesn’t mean you’re exempt from complying with the law. If the health center or fire department reviews the drawings or the site and suspects “this building doesn’t look right—could it be an illegal structure?”, they will make inquiries to the Building Guidance Division.

If it’s discovered at that point that the building is illegal (e.g., exceeding the floor-area ratio, or unauthorized extensions), the ryokan business license will naturally be denied.

In other words, even for properties of 200㎡ or under, the golden rule is to choose a property “that has a Certificate of Inspection (i.e., is legally compliant).” If it doesn’t have one, you must at least have an architect examine the property and confirm that it is not an illegal structure.

“Illegal Structure” Properties You Should Absolutely Avoid

Unfortunately, some properties without a Certificate of Inspection are cases of deliberately illegal construction. Getting involved with such properties could deal a fatal blow, not only to your ryokan business plans, but to the property’s asset value as well.

• Illegal extensions (not to be confused with “legally nonconforming” status): “Legally nonconforming” (kizon-futekikaku) refers to a building that was legal when built but no longer complies with current laws—this can be remedied through renovation. “Illegal construction,” on the other hand, refers to a building that violated the law even at the time it was built (e.g., exceeding the building coverage ratio). In principle, such buildings cannot be licensed unless the violation is corrected (such as through partial demolition).
• Rooftop prefab units or sunrooms: Unregistered extensions are a breeding ground for illegal construction issues. Even a single such addition can cause the entire building to fail inspection.

Conclusion: The Certificate of Inspection Is the Property’s “Health Checkup.” Confirming It Before Purchase Is Critical

In the ryokan business, the building isn’t just a container—it’s the vessel responsible for protecting your guests’ lives.

Whether or not a Certificate of Inspection exists is the first filter for determining whether that vessel is safe.

Before jumping at a “cheap, charming old traditional house” you’ve found, always ask the real estate agent: **”Is there a Certificate of Inspection? If not, can a Certificate of Ledger Records be obtained?”**

If you’re told “no,” don’t purchase the property lightly. Instead, work with experts to simulate how much it would cost to prove the building’s legal compliance.

In the world of building regulations, “I didn’t know” is never an acceptable excuse.

Before signing an irreversible contract, we strongly recommend getting a professional assessment first.

Leave the Complexities of Building Regulations to Us, the Professionals

“I’ve found a property I’m interested in, but it doesn’t have a Certificate of Inspection, and I’m worried about whether I’ll be able to obtain a license.”

“My property is 200㎡ or under, but the health center is asking me to prove the building’s legal compliance.”

“I don’t know who to ask to conduct a Legal Compliance Status Survey by a first-class architect.”

If you’re facing any of these concerns, please feel free to consult with us.

We at Stay Buddy Co., Ltd. are a team of professionals providing one-stop support—from launching to operating ryokan and minpaku (vacation rental) businesses.

We are more than just a property management company.

• We team up with **partner first-class architects to conduct “legal compliance assessments” before you purchase a property.**
• We provide complete support, from surveying and preparing reports for properties without a Certificate of Inspection, to handling the change-of-use procedures.
• We propose cost-effective renovation solutions along with operational strategies designed to achieve high profitability.

Eliminate the worst-case scenario of “buying a property but being unable to operate it.”

As your partner in building a successful ryokan business, we’re committed to supporting you every step of the way. Please feel free to reach out for a free property assessment and personalized consultation.