(1) Reasons for Proposal

The Special Act on Private Rental Housing was amended (Act no. 15730; promulgated on August 14, 2018; to be enforced on February 15, 2019) to prescribe that rent increases shall be determined by considering such factors as the house price index, fluctuations of rental rates in the adjacent area, and number of households of rental housing; allow lessees to cancel or terminate a rental agreement in such cases as those where the Mayor, etc. has acknowledged the occurrence of a serious defect that renders a rental housing uninhabitable; and obligate any multi-family housing complex of a certain size or larger to organize a council of lessees’ representatives. Accordingly, this Amendment prescribes matters delegated by the Act and matters necessary for the enforcement thereof.

It also prescribes that joint management of a complex where a council of lessees’ representatives has not been organized shall be approved by a majority of the lessees, prescribes procedures allowing local governments to modify data on rental housing registered on the rental housing information system to update the said data, and otherwise addresses and improves upon a number of weaknesses that have emerged from the operation of the current system.

(2) Major Provisions
A. Standards for rent increases (Article 34-2)

1) Prescribe that rent increases for any private rental housing complex with at least 100 households shall be based on fluctuations of the house price index of the Si/Do area in which the rental housing is situated

2) Allow the heads of Si/Gun/Gu to prescribe in ordinances those increases in standards that are appropriate for the relevant areas to address gaps within Si/Do

B. Requirements for lessees to cancel or terminate rental agreements (Article 35, paragraph 2 newly inserted)

Prescribe cases in which lessees may cancel or terminate rental agreements, such as cases where the Mayor, etc., has acknowledged a serious defect, occupancy is delayed for 3 months or more, or terms set forth in the standard-form rental agreement have been violated

C. Improve requirements for joint management of rental housing (Article 41)

1) Require any complex where a council of lessees’ representatives has not been organized to obtain approval for joint management of rental housing from a majority of the lessees

2) Allow joint management within the same Si/Gun area if the head of the local government has allowed joint management between small-scale complexes situated in near-downtown areas

D. Complexes with an obligation to organize a council of lessees’ representatives, etc. (Article 42)

1) Obligate any private rental housing subject to compulsory management that is a multi-family housing complex with at least 150 households to organize a council of lessees’ representatives

2) Where a council of lessees’ representatives has not been organized, require the rental business entity to notify lessees of the fact that a council of lessees’ representatives must be organized at least once every half-year

E. Grounds and procedure for reorganizing the rental housing information system (Article 50)

1) Prescribe grounds on which the Ministry of Land, Infrastructure and Transport may request local governments to investigate all data registered in the rental housing information system and correct errors

2) Prescribe procedures for local governments to perform a final check of any incorrect entries, omissions, inconsistent ownership, and other errors, and then modify such errors by direct authority or cancel them

F. Newly insert grounds for exemption from administrative fines (attached Table 3)

Prescribe grounds on which the imposing authority may grant exemption from administrative fines by considering such factors as the severity of, reasons for, or results of a violation