Using Notarial Deeds with a Clause of Consent to Compulsory Execution, and When to Choose Them in Receivables Management

Hello, I'm Noriaki Asato, Representative Attorney at LegalAgent.

If an installment payment agreement is signed only as a private document prepared by the parties themselves, the creditor cannot immediately attach the other party's assets even when payments stop. To attach assets, the creditor must go through a procedure to obtain an official document called a title of obligation (saimu meigi), for example by filing a lawsuit and obtaining a judgment, or by obtaining a demand for payment with a declaration of provisional execution from the court. On the other hand, if a notarial deed containing a "clause of consent to compulsory execution" (shikko nindaku mongon) is prepared from the outset, the creditor can proceed to a petition for compulsory execution without going through such court proceedings. Which form to use for the document should be decided from the perspective of how far the company can shorten its collection procedure when payments are delayed.

Skipping Court Proceedings with an Execution Deed

A notarial deed is an official document prepared at a notary office by a notary, a public official appointed by the Minister of Justice. A private document prepared between the parties does not by itself have the effect of enabling compulsory execution, so when payments are delayed, the creditor must separately obtain a title of obligation, for example by filing a lawsuit and obtaining a judgment.

Article 22, item 5 of the Civil Execution Act provides the exception that allows these court proceedings to be skipped. An execution deed (shikko shosho) under that item is "a notarial deed prepared by a notary with respect to a claim for payment of a certain amount of money or delivery of a certain quantity of other fungible things or securities, in which a statement by the obligor that it will immediately submit to compulsory execution is written or recorded." This "statement that it will immediately submit to compulsory execution" is what practitioners call the clause of consent to compulsory execution. A notarial deed for a monetary obligation that contains this clause functions in itself as a title of obligation without any lawsuit, so the creditor can proceed to a petition for compulsory execution without waiting for a judgment.

Note that when actually filing a petition for compulsory execution with the court, the creditor must have a "certificate of execution" (shikkobun) granted by the notary who keeps the original of the notarial deed (Article 26, paragraph 1 of the Civil Execution Act). In addition, service of a certified copy of the notarial deed on the obligor is also a requirement for commencing compulsory execution (Article 29 of the same Act), and the petition is filed with the authenticated copy bearing the certificate of execution and a certificate of service. It should be kept in mind that what the clause of consent to compulsory execution allows the creditor to skip is only the prior court proceedings, and it does not eliminate the procedures for obtaining the certificate of execution or for service.

The Scope of Claims Enforceable Through a Notarial Deed

As the text of the statute states, a notarial deed can be given enforceability by including a clause of consent to compulsory execution only for claims for "payment of a certain amount of money" or "delivery of a certain quantity of fungible things or securities." Agreements to pay unpaid fees in installments, monetary loan agreements, and agreements to pay damages fall within this scope, so a deed for them functions effectively as an execution deed.

By contrast, claims for delivery of real estate or specific movables, or for specific acts or omissions, are outside the scope. Obligations such as "delivering a specific product," "carrying out restoration work at the office," or "ceasing competing business activities" are not aimed at delivery of a certain amount or quantity of money or similar items, so even if a clause of consent to compulsory execution is included in a notarial deed, compulsory execution cannot be carried out on that basis alone. Where an agreement mixes payment of money with non-monetary obligations, the document should be designed on the premise that only the monetary payment part is treated as an execution deed, and the other obligations will have to be contested separately in court or otherwise.

Procedures and Required Documents at the Notary Office

Notarial deeds are prepared at notary offices around the country. In principle, the contracting parties themselves appear at the notary office, but proceedings through an agent are also permitted (Article 32, paragraph 1 of the Notary Act). Where an agent appears, the agent needs a power of attorney that specifically states the matters entrusted (a blank power of attorney is not accepted), sealed with the principal's registered seal, together with the principal's seal registration certificate. Where a corporation is a party, it prepares a certificate of the representative's qualification and a seal certificate for the representative's seal, or a certificate of registered matters of the corporation and a seal certificate for the representative's seal. Seal certificates and certificates of registered matters must have been issued within the past three months. In addition, since October 2025 it has also become possible to prepare a notarial deed by web conference without going to the notary office. However, this is limited to cases where a person requesting the deed so requests and the notary finds it appropriate (Article 37, paragraph 2 and Article 40, paragraph 3 of the Notary Act).

When preparing a notarial deed based on a money loan (monetary loan agreement), it is essential to make clear the fact that the money was actually delivered. In practice, the usual procedure is to prepare, after the funds have been delivered, a notarial deed containing a statement that the borrower will immediately submit to compulsory execution if repayment is delayed. The deed specifically sets out matters such as the due date for repayment in a lump sum or in installments, the payment date for each installment where repayment is in installments, the interest rate and interest payment dates, and the events upon which the borrower loses the benefit of time if a certain number of payments are missed. Where interest is provided for, it is also essential to confirm that the rate falls within the maximum rates under the Interest Rate Restriction Act.

Combining a Debt Acknowledgment and Repayment Agreement with a Notarial Deed

In practice, when obtaining an agreement to pay in installments, a commonly used flow is first to document the existence of the unpaid debt, the remaining balance, the repayment schedule, and the events of acceleration in a debt acknowledgment and repayment agreement (or a monetary loan agreement), and then to take that content as it is to a notary office and have it prepared as a notarial deed with a clause of consent to compulsory execution. This combination is also used when converting accounts receivable that have already arisen or uncollected loans into installment repayment. The clauses to include in a debt acknowledgment and repayment agreement are explained in How to Draft a Debt Acknowledgment and Repayment Agreement: Putting Installment Payments in Writing Instead of Relying on a Verbal Promise.

The difference from relying on a private document alone appears in the initial response after the other party's payments stop. With a private document, if payment delays continue, the creditor sends demands for payment, and if the other party still does not respond, the creditor files a lawsuit, obtains a judgment, and then files a petition for compulsory execution. The initial response up to sending demands to the other party and filing a lawsuit is also explained in detail in What Is Breach of Contract? How It Differs from Non-Performance of Obligations and the Initial Response in Corporate Legal Practice.

By contrast, if a notarial deed with a clause of consent to compulsory execution exists, then once an event of acceleration occurs, the creditor can move to attachment proceedings without going to court, after obtaining a certificate of execution and having a certified copy of the notarial deed served. Contract review when incorporating installment repayment clauses into a master agreement with a business partner in an ongoing relationship is also closely related to the perspective discussed in What Is a Master Transaction Agreement? Clauses to Review for Ongoing Transactions and the Relationship With Individual Contracts.

Identifying Assets to Attach and Property Disclosure Proceedings

Even with a notarial deed with a clause of consent to compulsory execution in hand, when filing a petition for compulsory execution, the creditor must itself identify the other party's assets to be attached. The court does not search out the obligor's assets, and at the time of the petition the creditor must specify the name and branch of the financial institution for a bank account, the employer for wages, and the location and registration information of the property for real estate.

As a legal procedure for cases where the other party's asset situation cannot be ascertained, the Civil Execution Act provides for "property disclosure proceedings" in Article 196 and the following articles. However, this is a separate petition procedure in which the obligor is summoned to court and made to state what property it holds, and preparing a notarial deed does not automatically reveal the obligor's assets. A creditor holding an execution deed can also file for property disclosure proceedings, and for proceedings to obtain information from third parties, under which information on deposit accounts is obtained from financial institutions (Article 204 and the following articles of the same Act). That said, both procedures require that the requirements of Article 197, paragraph 1 of the same Act be met, such as the creditor having failed to obtain full satisfaction even after carrying out compulsory execution, or a prima facie showing that compulsory execution against known assets would not yield full satisfaction. It is important to understand the premise that a notarial deed is merely a means of opening the door to compulsory execution quickly, and not a system that secures the assets to be collected from.

Choosing Based on the Fee Burden and Collection Risk

Preparing a notarial deed incurs a fee payable to the notary. The fee is set by the Notary Fee Ordinance according to the value of the subject matter (for a monetary loan, the loan amount; for a debt repayment agreement, the amount to be paid). According to the fee table published by the Japan National Notaries Association, the fee is at levels such as JPY 7,000 where the value of the subject matter is more than JPY 1 million and not more than JPY 2 million, JPY 20,000 where it is more than JPY 5 million and not more than JPY 10 million, and JPY 26,000 where it is more than JPY 10 million and not more than JPY 30 million. In addition, there are separate costs for appointing an agent and fees for asking a professional to prepare the draft.

The decision on which approach to use is made by weighing this fee burden against the cost of filing a lawsuit if payment is not made (court stamp fees, attorney's fees, and the time until judgment). For small claims, the cost of preparing a notarial deed may feel relatively heavy, whereas for large claims or transactions with long repayment periods, there are many situations in which the benefit of skipping court proceedings far outweighs the fee burden. Whether the other party will agree to prepare a notarial deed is also a precondition. Once payments have stalled and the relationship has deteriorated, it often becomes difficult to obtain the other party's cooperation in preparing a notarial deed, so I think it is important whether the creditor can present notarization as a condition at the time it agrees to the request for installment payments.

Whether to stop at a private document or go as far as preparing a notarial deed with a clause of consent to compulsory execution is decided in light of the size of the claim, the installment period, and the degree of concern about the other party's ability to pay. If there is uncertainty about drafting the notarial deed or arranging the procedure, the safe course is not to decide internally alone but to obtain advice from an attorney in advance.