"You're Saying 'I'll Buy It Myself, So Get Out'..."... Tenant Directly Observes Landlord's Actual Residence

[Asia Economy Reporter Lee Chun-hee] Going forward, tenants whose contracts were not renewed due to the landlord's actual residence will be able to directly verify whether the property has been re-leased.

The Ministry of Land, Infrastructure and Transport and the Ministry of Justice announced on the 1st that they will publicly notify the enforcement decree of the Housing Lease Protection Act, which includes this provision, following the revision and enforcement of the new Housing Lease Protection Act in July.

The revised enforcement decree includes provisions to add "persons who were tenants of a lease contract whose renewal was refused" to the category of 'interested parties' who can request lease information of the relevant property. Currently, the scope of 'interested parties' includes only the current landlord and tenant, the owner of the property, and mortgage holders, but now it will also encompass tenants whose renewal requests were denied.

With the introduction of the right to request contract renewal, if a landlord refuses a tenant's renewal request on the grounds of personal residence, the tenant who was refused will be granted the right to directly access information verifying whether the landlord is actually residing there. Once this revision is enforced, tenants denied renewal will be able to request related information from relevant agencies to confirm whether a new lease contract has been made during the fixed date assignment period.

If it is confirmed that the landlord has leased the property to a third party, the landlord will be held liable for damages to the existing tenant.

Since conflicts between landlords and tenants are expected due to the enforcement of this revised Housing Lease Protection Act, the government has also included provisions to increase the number of dispute mediation committees, which serve as bodies to resolve such conflicts, in the enforcement decree revision. Currently, only the Korea Legal Aid Corporation (6 locations) is designated as an operator of dispute mediation committees, but the Korea Land and Housing Corporation (LH) and the Korea Appraisal Board have now been included. If the revision passes, LH and the Korea Appraisal Board will each establish 6 new dispute mediation committees nationwide, totaling 12 new locations.

The revision also includes lowering the upper limit of the statutory monthly rent conversion rate (jeonse-to-wolse conversion rate). Currently, the conversion rate is set at the lower of 10% or the base interest rate plus 3.5%. Accordingly, the current applicable conversion rate is 4%, calculated as the base interest rate of 0.5% plus 3.5 percentage points.

However, due to the low interest rate environment, the government included in this revision a reduction of the additional percentage added to the base interest rate from 3.5 percentage points to 2 percentage points, as the current conversion rate is relatively high compared to loan interest rates and returns on other financial products, which increases the housing cost burden for tenants living under monthly rent compared to those living under jeonse. Once the revision is enforced, the conversion rate based on the current base interest rate will be 2.5%.

The revision can be viewed in the legislation information/legislative notice section on the Ministry of Land, Infrastructure and Transport website. Those who have opinions on the revision can submit them by mail, fax, or through the website by the 10th.

Lee Myung-seop, Director of the Housing Policy Division at the Ministry of Land, Infrastructure and Transport, said, "Through this revision, a more balanced relationship of rights between landlords and tenants will be established, and housing stability for non-homeowners and low-income citizens is expected to improve."

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