Starting July, Intensive Inspections of Registered Rental Business Operators... Deregistration Considered if Rent Increase Exceeds Limit

[Asia Economy Reporter Lee Chun-hee] Starting from July, intensive inspections of registered rental business operators will be conducted. The government plans to begin rigorous investigations of operators suspected of excessive rent increases or violations of rental obligation periods immediately after the voluntary reporting period for lease contracts of registered rental business operators, which ends at the end of next month, concludes.

On the 28th, the Ministry of Land, Infrastructure and Transport announced that from the second half of this year, it will actively promote joint inspections with related agencies through a full survey to check for violations of public obligations by registered rental business operators. Strict measures such as imposing fines and reclaiming tax benefits will be taken against those found to have violated obligations.

This follows the temporary voluntary reporting period for lease contracts, which operates until the end of next month. The Ministry of Land, Infrastructure and Transport plans to conduct full surveys and joint inspections annually to check for violations of obligations.

Registered rental business operators are part of the rental registration system introduced in 1994 to support housing stability for tenants of private rental housing. Registered rental business operators are subject to public obligations such as limiting rent increases to within 5%, complying with rental obligation periods, and reporting lease contracts, in exchange for tax benefits.

As the number of registered rental housing units has increased recently due to measures to activate rental registration, the Ministry of Land, Infrastructure and Transport has strengthened fines for violations of important obligations from 10 million KRW to up to 30 million KRW and mandated the recovery of tax benefits. Additionally, it has established the dedicated rental management system "RentHome" and is conducting a comprehensive cleanup of inaccurate registered rental information to strengthen the management foundation for operators.

This full survey will be conducted nationwide in cooperation with metropolitan and local governments starting in the second half of this year, based on this management foundation. The Ministry plans to identify suspected violators through system analysis in July and August, then conduct detailed investigations such as document submission and face-to-face inspections by the end of the year, and impose administrative sanctions if violations are confirmed.

The survey targets the overall public obligations of registered rental business operators, with a particular focus on compliance with key obligations such as rent increase limits and rental obligation periods. The Ministry plans to conduct inspections nationwide, focusing on local governments including Seoul, where operators receive significant tax benefits and where housing prices have recently surged.

Rental Housing Lease Contract Voluntary Reporting Period Promotional Poster (Provided by Ministry of Land, Infrastructure and Transport)

Before this intensive inspection, the Ministry of Land, Infrastructure and Transport and local governments are temporarily operating a "voluntary reporting period for unreported lease contracts" until the end of next month to provide an opportunity for voluntary correction.

This applies to all lease contracts that have not been reported or had changes reported since the rental housing was registered. Minor violations such as "unreported lease contracts" and "non-use of the standard lease contract form," which currently carry fines of up to 10 million KRW under the law, will be exempt from fines. According to the Ministry, as of the 28th, about 100,000 registered rental housing units nationwide have been voluntarily reported.

However, for major obligation violations such as rent increase limits and compliance with rental obligation periods, fines will be imposed even if voluntarily reported. The Ministry stated that considering the details of the violation, prompt correction, and cooperation with government policies, fines for serious obligation violations can be reduced by up to 50%.

On the other hand, if operators evade the lease contract reporting obligation due to fear of detection of serious violations, the Ministry explained that it is considering measures to increase fines for unreported lease contracts by up to 50%, and to cancel rental business registration if operators fail to submit documents or comply with correction orders a certain number of times.

A Ministry of Land, Infrastructure and Transport official said, "We expect that the annual implementation of joint inspections for obligation violations targeting registered rental business operators, which is being conducted for the first time this year, will enable the removal of poor operators and the sound operation of the rental registration system." He added, "We will continue to actively pursue various policies to strengthen post-management of registered rental business operators and tenant protection."

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