Ahead of Mandatory Rental Business Guarantee Insurance... Partial Relaxation of Enrollment Requirements

The government has eased some of the guarantee subscription requirements ahead of the full mandatory guarantee subscription for rental deposit guarantees by registered rental business operators.

On the 16th, the Ministry of Land, Infrastructure and Transport announced that it has revised the ministry notice on the "Application Ratio of Officially Announced Prices and Standard Market Prices" and will fully implement it from that day.

This revision is a follow-up measure to the Special Act on Private Rental Housing, which mandates guarantee subscription for rental deposits on all registered rental housing.

The amendment increased the application ratio of the officially announced price used as the housing price during the guarantee subscription review.

'Revision of Public Announcement Price and Standard Market Price Application Ratio' (Data provided by Ministry of Land, Infrastructure and Transport)

Currently, for apartment housing, a ratio of 130% is applied for houses under 1.5 billion KRW, and 120% for those over 1.5 billion KRW. Going forward, the ratios will be raised to 150% for houses under 900 million KRW, 140% for 900 million to 1.5 billion KRW, and 130% for over 1.5 billion KRW.

For detached houses, the current ratios are 170% for under 900 million KRW, 160% for 900 million to 1.5 billion KRW, and 150% for over 1.5 billion KRW, which will be increased to 190%, 180%, and 160%, respectively.

Additionally, besides the existing appraisal value and officially announced price, real estate market prices and the sale price of the relevant house within one year can now be used as housing price standards. The guarantee institutions such as HUG will choose which real estate market price source to use, such as KB or Korea Real Estate Board.

This measure was taken considering that the current housing price standards are somewhat detached from market prices ahead of the full guarantee subscription implementation on the 18th, and that various price standards such as real estate market prices are applied in guarantees like the return guarantee of jeonse deposits.

Lee Doo-hee, Director of the Private Rental Policy Division at the Ministry of Land, Infrastructure and Transport, said, "Through this revision, aligning the housing price standards with market prices will enable rental business operators to subscribe to rental deposit guarantees more smoothly," adding, "We plan to actively encourage rental business operators to subscribe to guarantees to ensure that there is no neglect in securing tenants' housing stability through the return guarantee of deposits for registered rental housing."

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