"Reviving Local Economy" ... Easing Procedures for Rent Reduction of 'Local Government Shared Property'

Ministry of the Interior and Safety, 'Enforcement Decree of the Act on Shared Property and Goods Management' Passed at Cabinet Meeting

On the 11th, a banner expressing gratitude for reasonable rent set up by the Insadong Traditional Culture Preservation Society was hung on Insadong Street in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jo In-kyung] When disasters such as the novel coronavirus infection (COVID-19) occur, a path has been opened for local governments to quickly reduce or exempt usage fees or lease fees for tenants of commercial spaces, buildings, or facilities owned by the local government.

The Ministry of the Interior and Safety announced on the 24th that it has amended the "Enforcement Decree of the Act on the Management of Public Property and Goods" to include this provision.

This amendment to the enforcement decree was made to establish a nationwide unified basis for local governments to reduce usage fees and lease fees for tenants of internal commercial spaces and stores in underground shopping malls, parks, libraries, stadiums, museums, and other facilities owned by each local government.

The current enforcement decree stipulates that the rate of usage fees and lease fees should be set by ordinance within the range of 1% or more of the property value, but local governments have all set the rate at 5% or more by ordinance.

Because of this, even if local governments want to reduce the rate within the legal range to revitalize the local economy after the COVID-19 crisis, they must go through ordinance amendments, making it difficult for each local government to take prompt action.

However, from now on, if a tenant operates a business and suffers damage due to COVID-19, the local government can temporarily reduce the rate for small business owners during the disaster period only with the review of the Public Property Deliberation Committee. Additionally, to apply this from the COVID-19 damage period, transitional provisions allow retroactive application to residents who have been using the property before the amendment of the enforcement decree.

Separately, if the head of the local government recognizes that the public property could not be used during the disaster period due to business closures or suspensions caused by COVID-19, the period can be extended or usage and lease fees can be exempted for the unused period in consideration of the closure or suspension period according to the current related laws.

Ko Gyu-chang, Director of the Local Finance and Economy Office at the Ministry of the Interior and Safety, said, "We must focus on thorough quarantine to prevent the spread of COVID-19 while simultaneously restoring everyday economic activities," adding, "We will respond together with local governments to minimize the negative impact on the local economy and revitalize local communities."

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