Strengthening Penalties for 'Imdaesaebija' Not Complying with Obligations... Full Effort to Protect Tenants

Mandatory Violators Subject to Fines, Benefit Recovery, and Registration Cancellation
Expanded Joint Inspections by Related Agencies...Encouraging Voluntary Reporting
Stricter Penalties for Non-Return of Tenant Deposits
Mandatory Inclusion of Related Content in Licensed Real Estate Agent Training

[Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] The Ministry of Land, Infrastructure and Transport announced on the 1st that it plans to conduct a full-scale investigation into whether registered rental business operators nationwide comply with their public obligations, and to impose fines, cancel registrations, and recover tax benefits for those who violate these obligations.

The Ministry of Land plans to implement the "Registered Rental Management Strengthening Promotion Plan" starting this month, which focuses on expanding joint inspections for obligation violations, enhancing post-management of business operators, and strengthening tenant protection.

The rental registration system was introduced in 1994 to support housing stability for tenants living in private rental housing. Since the system's introduction, the government has provided various benefits to rental business operators. In particular, in December 2017, additional benefits were introduced to encourage long-term rentals, such as exclusion from comprehensive real estate tax aggregation and expansion of rental income tax reduction targets.

Since the announcement of the "Registered Rental Activation" policy, newly registered rental housing units increased from 980,000 at the end of 2017 to 1,508,000 at the end of last year, which is evaluated to have contributed to tenants' housing stability.

However, there have been considerable criticisms that some rental business operators receive excessive benefits without properly fulfilling their obligations. In response, the Ministry of Land plans to expand post-management of business operators and strengthen tenant protection to eliminate poor operators and solidify the rental registration system.

First, starting this year, joint inspections by related agencies on whether business operators violate their public obligations will be expanded nationwide to 229 cities, counties, and districts. This inspection will be conducted until December, including the voluntary rental contract reporting period (March to June).

Business operators found to have violated obligations will face strict measures such as fines, registration cancellation, and recovery of previously received tax benefits in accordance with laws and principles.

The inspection items cover all public obligations of business operators, with a particular focus on core obligations such as the rental obligation period and rent increase restrictions (within 5% annually). Cases of failure to report during the voluntary rental contract reporting period will also be subject to inspection after the period ends.

Areas such as Seoul, where business operators receive significant tax benefits and where housing prices have recently risen sharply, will be managed intensively in collaboration with the relevant local governments.

Along with this, the Ministry of Land and provincial governments will establish a "Registered Rental Management Support Task Force (TF)" to manage joint inspection situations and support local governments.

Tenant protection policies will also be further strengthened.

If a rental business operator causes damage to tenants by failing to return rental deposits or provides false or fraudulent information regarding rights and relationships, registration cancellation and tax benefit recovery will be possible.

Additionally, rental business operators owning multi-family houses will be required to strengthen their obligation to explain by providing tenants with information on the senior priority deposit for the entire house when signing rental contracts.

To help rental business operators recognize their obligations and responsibilities related to rental business before registration, a checklist and confirmation form of business operator obligations will be included in the registration documents.

Since the role of licensed real estate agents is important in protecting tenant rights, content related to registered rental businesses will be mandatorily included in the statutory regular training courses for agents. Starting from April, promotional materials explaining the system will also be separately distributed to real estate agent associations and offices.

A Ministry of Land official emphasized, "The government will continue to seek and implement measures to strengthen the management of registered rental business operators and protect tenant rights in a systematic manner."

This content was produced with the assistance of AI translation services.