Concerns Over Side Effects of the 'Lease 3 Laws'... Yeo In-wook of the Ruling Party Says "Somewhat Disappointing"

"Rent Increase Also Occurred When Lease Term Was Extended by 1 Year 31 Years Ago"
"Temporary Increase Expected Again This Time, Followed by Stabilization"

Lee Won-wook, Democratic Party of Korea / Photo by Yonhap News

[Asia Economy Reporter Lim Juhyung] As the so-called 'Lease 3 Acts' aimed at stabilizing the rental (jeonse and monthly rent) market are set to pass the National Assembly plenary session on the afternoon of the 30th, concerns have been raised that the legislation could instead drive up rents. In response, Lee Won-wook, a member of the Democratic Party of Korea, expressed regret.

On the day, Lee appeared on CBS Radio's 'Kim Hyun-jung's News Show' and responded to the host's question, "After the 2+2 period ends, can landlords freely set the rent increase rate for new contracts?" by saying, "That part is somewhat regrettable."

He added, "I proposed a bill to apply a rent increase cap of within 5% even for new contracts, but that provision was removed during discussions in the National Assembly's Legislation and Judiciary Committee."

When the host mentioned, "There are reports that because landlords can only raise jeonse prices by 5% after two years, they are increasing the amounts in advance when signing contracts, causing jeonse prices to skyrocket," Lee said, "This law is somewhat unfortunate in that regard as well," but he also predicted, "When the lease period was extended from one year to two years 31 years ago, there was a rent increase of about 15-20%, after which the rate stabilized. I expect that while there may be a temporary increase effect this time, jeonse prices will stabilize afterward."

Lee explained, "No law can regulate everything. Any law inevitably has loopholes," and added, "Although the government's real estate measures are passing through the National Assembly with quite strong content, there are various possibilities for abuse and gaps."

He continued, "If such gaps are found, we plan to continuously prepare supplementary measures as high-intensity means."

Meanwhile, the 'Lease 3 Acts' passed the National Assembly's Legislation and Judiciary Committee on the 29th. The bill centers on △ the rent increase cap system △ the right to request contract renewal △ and the rental reporting system.

The so-called '2+2' plan allows tenants to extend their lease contract for one additional two-year term after the initial two-year lease ends. It also includes provisions that limit rent increases upon contract renewal to no more than 5% of the existing rent, with local governments able to set a lower cap within 5% through ordinances if desired.

In particular, the right to request contract renewal will be applied retroactively to existing tenants who signed contracts before the law's enforcement.

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