"I'll Move Out. No, I Won't"... The 'Invincible Tenant' Until the Lease Expires

Explanation of Government's Housing Lease Protection Act

Renewal Request Possible 6 to 1 Month in Advance
If Tenant Reverses and Holds Out,
Even Owner-Occupiers May Find Moving In Difficult

If Rent Increases Over 5% on Renewal,
Mandatory One More Renewal Required,
Which May Be Disadvantageous for Landlords

[Asia Economy Reporter Lee Chun-hee] The amended "Housing Lease Protection Act," which sparked controversy over "hasty legislation" after being abruptly enforced just six days after the bill was submitted, is facing consecutive disruptions. This is because the government has repeatedly issued interpretations that effectively recognize tenants' right to request contract renewal as absolute and unrestricted during the bill interpretation process.

According to the government and industry on the 31st, the Ministry of Land, Infrastructure and Transport and the Ministry of Justice recently issued a guidebook on the "Housing Lease Protection Act," suggesting that tenants can exercise their right to request contract renewal virtually without any restrictions between six months and one month before the lease period ends, thereby intensifying the controversy.

According to the guidebook, the government judged that if the landlord and tenant agree in advance not to exercise the right to request contract renewal, such an agreement is invalid. Since the Housing Lease Protection Act includes a clause stating "any agreement disadvantageous to the tenant shall have no effect," such a non-exercise agreement is considered disadvantageous to the tenant and thus loses its validity. Furthermore, even if the tenant initially planned to move out at the contract expiration without requesting renewal, they can still reverse this decision and request renewal anytime within the renewal request period.

Among the explanations of the Housing Lease Protection Act distributed by the government on the 28th, it was interpreted that an agreement not to request contract renewal in advance is invalid. (Provided by the Ministry of Land, Infrastructure and Transport)

Industry insiders express concerns that such an interpretation grants tenants an unrestricted right to request contract renewal, which could threaten the stability of not only lease agreements but also sales transactions.

In fact, according to the government's interpretation, a buyer of a house with less than one year remaining on the lease contract could find their housing rights destabilized depending on the tenant's decision. Since tenants can exercise their right to request contract renewal starting six months before the contract expires, if the buyer fails to complete the ownership transfer registration before then, they may be unable to move in for at least two years, even if they purchased the house for actual residence.

Moreover, according to the government's guidebook, even if the seller and tenant agreed not to exercise the right to request contract renewal and the house sale process has begun, if the tenant suddenly changes their mind and requests renewal, the buyer has no choice but to accept it.

Among the explanatory booklets on the Housing Lease Protection Act distributed by the government on the 28th, there is an interpretation stating that even if it was agreed to move out at the contract expiration date, contract renewal is still possible. (Provided by the Ministry of Land, Infrastructure and Transport)

In reality, Mr. Jang, who signed a sales contract for a house about three months before the lease expiration for actual residence, is at risk of being stuck in a deadlock. The tenant, who initially agreed to vacate the house upon lease expiration, changed their mind and exercised the right to request contract renewal, saying "I can't move out." Mr. Jang expressed frustration, saying, "If the buyer inherits the obligation to renew the contract, shouldn't they also inherit the right to refuse it for actual residence? I might end up homeless on the street."

The guidebook also contains content seemingly favorable to landlords. It includes provisions allowing landlords to raise rent beyond the 5% cap during contract renewal. However, this too comes with conditions. If the landlord and tenant agree to raise rent by more than 5%, it is considered an "implied renewal," and "in this case, the tenant can exercise the right to request contract renewal once more," according to the government. If a renewal contract exceeding 5% is made without such conditions, it is also considered disadvantageous to the tenant and thus invalid, meaning the excess rent must be refunded, according to the government's stance.

An industry official pointed out, "Rather than resolving confusion more than a month after the law's enforcement, the government is issuing different interpretations depending on the situation, exacerbating confusion and conflict."

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