Rent 270,000 Won with Maintenance Fee of 1,050,000 Won? ... Sneaky Increase in Maintenance Fee Instead of Rent Hike

No Cases of Dispute Resolution Filed Regarding Management Fee Increases After Jeonwolse Reporting System Implementation
Park Seong-min, People Power Party Lawmaker, Urges Urgent Supplementation and Improvement of the Three Lease Laws

[Asia Economy Reporter Kangwook Cho] Since the implementation of the "Jeonwolse Reporting System," the last of the three lease laws, in June last year, numerous side effects have emerged on the ground, but it has been found that there is no effort to grasp the actual situation or provide relief measures.

Recently, when visiting real estate brokerage websites or offices, it is not difficult to find one-room listings where the monthly rent is 260,000 to 280,000 KRW, but the maintenance fee is much higher than the rent, a case of "the tail being bigger than the belly."

This is pointed out as a "trick listing" caused by landlords lowering the jeonse (key money deposit) or monthly rent below the reporting threshold (in the metropolitan area, metropolitan cities, or provinces, jeonse deposit exceeding 60 million KRW or monthly rent exceeding 300,000 KRW) out of concern that the report might later be used as a basis for taxation, while increasing the maintenance fee, which is not included in the reporting system.

'Trick listings' cases / Provided by Park Seong-min, Office of the People Power Party. Source = Dabang.

According to the office of Park Sung-min, a member of the National Assembly Land, Infrastructure and Transport Committee from the People Power Party, when inquiring with the Ministry of Land, Infrastructure and Transport about the status of side effects such as maintenance fee increases after the implementation of the Jeonwolse Reporting System, the response was, "Maintenance fees are actual cost usage fees, and related statistics are not held."

Additionally, the Ministry responded that such trick increases in maintenance fees can be remedied "through mediation by the Lease Dispute Mediation Committee."

However, according to data submitted by the Ministry to Representative Park, among the total 491 disputes received from November 2020, when the Housing Lease Dispute Mediation Committee began full operation, until last month, there were zero cases of disputes or mediations related to maintenance fee increases.

Furthermore, in response to Representative Park's inquiry, the Dispute Mediation Committee gave an answer contrary to the Ministry's claim, stating, "If the reduction of monthly rent and increase of maintenance fees are genuine expressions of intent between the parties, it is not subject to mediation and may be dismissed," and "If the landlord does not agree to mediation, the mediation process is terminated."

Representative Park pointed out, "From June onward, failure to comply with the Jeonwolse Reporting System will result in a fine of up to 1 million KRW, so it is expected that trick listings that hurt tenants will continue to appear," adding, "Because the three lease laws were passed without sufficient deliberation, side effects have occurred in many places, and relief measures are virtually nonexistent, which has rather increased the damage to tenants."

He continued, "Just as the Korea Real Estate Board holds statistics on maintenance fees for nationwide mandatory management apartment complexes*, if the government has the will, it can grasp the actual situation through related agencies," emphasizing, "Based on this, there is a need to hasten the supplementation and improvement of the three lease laws."

Assemblyman Park Sung-min.

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