Contract Renewal and Rent Cap System Passed at Cabinet Meeting... Effective from Today (Comprehensive)

Tenant '2+2 Years' Guarantee... Rent Increase Limited to 5%
Prime Minister Chung "Some Concerns About Side Effects... Relevant Ministries Monitoring Market Situation"

Chung Sye-kyun (right), Prime Minister, and Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, are moving to attend the 'Extraordinary Cabinet Meeting' held on the 31st at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kwangho Lee] The contract renewal request system and the rent ceiling system, designed to protect tenants, passed the Cabinet meeting on the 31st and will be implemented immediately.

On the same day, the government held an extraordinary Cabinet meeting at the Government Seoul Office, presided over by Prime Minister Chung Sye-kyun, to review and approve the promulgation of the amendment to the Housing Lease Protection Act, which introduces the contract renewal request system and the rent ceiling system, key components of the 'Three Lease Laws' that were passed by the National Assembly the previous day.

The government decided to complete the promulgation process on the same day after the President's approval and publication in the official gazette. The law will take effect immediately upon its publication in the gazette.

The Housing Lease Protection Act was submitted to the Legislative and Judiciary Committee, the relevant standing committee, on the 29th and passed on the same day, then cleared the plenary session the day before, and passed the extraordinary Cabinet meeting on the 31st, resulting in implementation within two days of being submitted to the committee.

Prime Minister Chung explained the background of the swift approval, stating, "If the enforcement of the law is delayed, there are concerns about excessive rent increases and tenant damages in the meantime, which could rather cause market instability."

Accordingly, tenants will be able to request an additional two-year contract extension, and landlords must accept this unless there are circumstances such as actual residence. Rent increases cannot exceed 5% of the previous contract amount.

Prime Minister Chung said, "Some are concerned about side effects such as a decrease in rental housing supply," and urged, "Relevant ministries should closely monitor market conditions and take timely supplementary measures necessary to stabilize the housing lease market."

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