Regarding "Contract Renewal Claim Right Should Be Extended to 6 Years... Introduction of Rental Business Licensing System"

[Image source=Yonhap News]

[Asia Economy Reporter Wondara] At a debate hosted by the Democratic Party of Korea, there was a call to extend the contract renewal claim period to a maximum of 6 years and to introduce a licensing system for rental business operators. The recently passed 'Lease 3 Act' extended the contract period from the existing 1 year to 2 years and guaranteed one renewal, allowing tenants to secure a lease period of up to 4 years. Registration of rental business operators is currently done through a notification system.

[Image source=Yonhap News]

Yoon Ho-jung, Secretary-General of the Democratic Party, attended a debate titled "The Amendment of the Lease 3 Act is the Beginning of Tenant Protection" held at the National Assembly on the morning of the 11th, and said, "There is still a long way to go. Given the nature of lease contracts, which are usually made according to the school cycle of children, the contract renewal claim period should be expanded to a maximum of 6 years." He also said, "Introducing rent standards that can serve as a benchmark by region to ensure appropriate rent levels remains a task."

Park Sang-hyuk, a Democratic Party lawmaker, said, "Even a 5% increase in deposit is excessive in an era of low inflation," adding, "As the Lease 3 Act is implemented going forward, problematic areas should be quickly supplemented and addressed."

Park Hong-geun, a Democratic Party lawmaker, said, "There are still many tasks to be supplemented to bring housing policy to the level of advanced countries," and added, "Above all, a dispute mediation body and a prompt decision-making procedure must be established as soon as possible to quickly resolve disputes when rental conditions cannot be agreed upon."

He continued, "We need to prepare for the introduction of a standard rent system to overcome unfair contract relationships. Metropolitan area local governments should take the lead in early enactment of rent increase rates delegated by ordinance." He also added, "We will also promptly address supplementary tasks such as guaranteeing the conversion rate between jeonse and monthly rent and the stable introduction of the jeonse and monthly rent reporting system."

Baek Hye-ryun, a Democratic Party lawmaker, said, "We will also prepare measures to protect tenants who are struggling due to rapid conversion to monthly rent through downward adjustment of jeonse and monthly rent," and added, "We will swiftly handle tasks to be resolved in the future, such as the enactment and revision of local government ordinances and strengthening the authority of the Housing Lease Dispute Mediation Committee."

Kim Jin-ae, floor leader of the Open Democratic Party, said, "This amendment is just the originally discussed 'Lease 3 Act,'" and added, "We need to restart discussions on the standard rent system and the dispute mediation committee, which were not amended this time."

There was also a call to expand the rental business operator system from the current notification system to a licensing system.

Professor Lim Jae-man of the Department of Real Estate at Sejong University, who participated in the debate, said, "The notification system is likely to passively collect information related to leases," and added, "The notification system should be expanded and improved to a rental business operator registration (licensing) system. The licensing system is a more effective method than the registration system." Professor Lim also said, "Some cities in the United States have introduced a licensing system," and added, "They sometimes adopt a phased strategy of first introducing a registration system and then transitioning to a licensing system."

Lawyer Lee Kang-hoon (Executive Committee Member of the People's Solidarity for Participatory Democracy's Livelihood Hope Headquarters) said, "If upward pressure on lease prices through new leases continues to be confirmed in Seoul and the metropolitan area in the future, it will be necessary to pursue legislation to limit the initial rent increase rate." However, he added, "For legislation to limit the initial rent increase rate to become a reality, the public must have secured data on previous lease conditions for the relevant housing concluded with other tenants two years prior," and said, "Legislation and implementation will only be possible after June 2023, when the lease transaction reporting system is implemented."

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