Delayed Interest Charged for Non-Return of Jeonse Deposit... "Immediate Return Law for Lease Deposit Introduced"

Assemblyman Yongho Lee, Mandatory Immediate Return of Jeonse Deposit
Interest Imposed According to Presidential Decree in Case of Delay

[Asia Economy Reporter Naju-seok] A bill has been submitted to the National Assembly requiring landlords to immediately return the full deposit to tenants when the lease contract period, such as for Jeonse, ends. The bill also includes provisions that landlords must pay delayed interest to tenants if the deposit is not returned.

On the 2nd, Lee Yong-ho, a member of the People Power Party, announced that on the 31st of last month, he submitted the "Housing Lease Protection Act" to the National Assembly. The bill centers on requiring the full deposit to be returned on the lease contract expiration date, and if the deposit is not returned, the landlord must pay delayed interest within the scope prescribed by Presidential Decree.

Recently, the issue of returning Jeonse deposits has become a social topic. In the case of Jeonse deposit return guarantee insurance, the amount of damage from non-return incidents increased eightfold last year compared to 2017. The number of first-instance cases filed in court for lease deposit returns also rose from 4,182 in 2018 to 5,755 last year.

[Image source=Yonhap News]

Currently, if the deposit is not returned after the lease contract ends, the tenant can apply for a lease registration order at the district court, branch court, or city/county court that has jurisdiction over the location of the leased residence. The tenant must also follow procedures such as applying the Small Claims Procedure Act to lawsuits filed against the landlord for deposit return claims.

The amendment proposed by Representative Lee requires the full deposit to be returned by the contract expiration date. If the deposit is not returned within 7 days from the date the reason for non-return arises, the landlord must pay delayed interest to the tenant at a rate not exceeding 20% per annum, as prescribed by Presidential Decree. This imposes an obligation to return the deposit after the contract period and also includes an obligation to pay interest.

Representative Lee stated, "The lease deposit is like the tenant's entire property, yet some landlords treat the deposit as if it were their own money, telling tenants to accept new tenants and leave, or delaying the return of the deposit without justifiable reasons. Most cases end up going through legal procedures such as deposit return lawsuits, but whether the issue of receiving the deposit back on the contract expiration date must necessarily be resolved through litigation is a matter to be considered from the tenant's perspective." He added, "Recently, as the real estate market has become unstable and housing prices have soared, tenants without their own homes who rent on Jeonse or monthly leases are increasingly anxious. This bill will help reduce disputes over lease deposit returns and serve as an opportunity to more clearly enforce lease contract obligations."

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