Seoul City Proposes 'Fair Rent' in Landlord-Tenant Commercial Disputes

Landlord-Only Applications Allowed... Market Prices of Nearby Shops Calculated Based on Big Data
Enhancing Credibility Through Business Agreement with the Korea Association of Certified Appraisers

[Asia Economy Reporter Jo In-kyung] The Seoul Metropolitan Government announced on the 13th that it will expand support for the 'Seoul-type Fair Rent,' which proposes an appropriate level of rent when commercial tenants apply for rent adjustment.

This is to allow both landlords and tenants to continue negotiations by presenting an appropriate rent level once more, and to provide evidence in litigation procedures if disputes escalate to lawsuits.

Until now, when tenants applied for 'rent reduction adjustment,' a dispute mediation committee was held, and the agreement proposed through this had the same enforceability as a court ruling for both landlords and tenants. However, if the landlord unilaterally refused to participate, tenants had no means of relief.

Accordingly, Seoul decided to expand support so that more citizens can use rent reduction adjustment and Seoul-type Fair Rent, which have been promoted since April, by proposing rent even with a single application from either the landlord or tenant. Additionally, to enhance the credibility of rent calculation, Seoul will sign an MOU with the Korea Association of Property Appraisers, a group of experts.

The Seoul-type Fair Rent, which serves as the standard for rent reduction adjustment, is calculated by professional committee members such as property appraisers based on surrounding commercial rent market prices, key commercial streets in Seoul (150 core streets), 15,000 stores, and big data related to rent and key money. First, 20 dedicated professional committee members of the Seoul-type Fair Rent, including property appraisers from the Korea Association of Property Appraisers, analyze surrounding rental cases, rights relations, value formation factors, and sales fluctuations to calculate rent. Then, the Seoul Commercial Building Lease Dispute Mediation Committee (30 members), including lawyers, licensed real estate agents, and property appraisers, makes the final decision on the fair rent for individual stores.

The city immediately starts rent calculation for applications agreed upon by both landlords and tenants. For single applications from either landlords or tenants, the city reviews the purpose of the application and provides fair rent unless there are special reasons such as improper intent. Tenants who want to know the appropriate rent without necessarily using it for dispute mediation can apply individually.

Landlords and tenants who wish to receive rent reduction adjustment and Seoul-type Fair Rent can submit an application form by visiting the Seoul Dispute Mediation Committee or by email (jinjin4407@seoul.go.kr). The service is free of charge.

Seo Seong-man, Director of Labor and Livelihood Policy at Seoul City, said, "By providing objective rent information to landlords and tenants, we expect it to offer practical help to tenants and contribute to stabilizing leases." He added, "In reality, rent disputes often proceed to lawsuits that require a long time and high costs, so this will serve as a practical alternative."

Meanwhile, Seoul is accepting the second round of applications for the 'Seoul-type Good Landlord' support project until the 29th, which supports landlords who voluntarily reduce rent. Selected landlords will receive support for building maintenance, electrical safety inspections, and weekly commercial disinfection, up to 3 million KRW or within 30% of the total rent reduction amount.

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