Reasons for Proposal
Currently, 38.3% of people in Korea do not own their own houses, and 50.1% of those in the Seoul Metropolitan Area are lessees who live in someone else's houses. While the average length of residence of the people who have their own houses is 10 years and 7 months, that of monthly renters with a deposit and those who lease on a deposit basis is just 3 years and 4 months and 3 years 3 months, respectively. Also, 36.4% of those without their own houses stay in a house no longer than 2 years.
The housing crisis experienced by those without their own houses leads to a serious household burden and poses a big threat to Korea’s domestic market, while high rent and asset inequality create a sense of marginalization, cause social conflicts, and undermine sound economic activities, which calls for national-level action.
The Housing Lease Protection Act has maintained a very short lease guarantee period of 2 years for three decades since it was amended in 1989, while major advanced countries such as Germany, France, the UK, Japan, and the United States define long-term lease and seek rent stability with guidelines such as standard rent.
In this regard, this Act aims to reasonably overhaul the housing lease system to resolve repeated residential instability and create a lease contract framework, which is a win-win for both the lessor and the lessee.
Details
A. Grant the lessee the right to contract renewal claim, obligate the lessor to not reject a contract renewal claimed by the lessee without reasons specified by law, and allow for extending the contract period up to 4 years (Articles 6 (1) and (2))
B. Define exceptional reasons that allow the lessor to reject a contract renewal as objective reasons such as three installments of rent overdue by the lessee or the lessor’s reason to actually live in a leased house and require the lessor to compensate three times the sum of moving expenses borne by the lessee and rent differences for 2 years if the refusal of such renewal turns out to be false (Article 6 (4))
C. Specify in law that the lessor’s increase claim must not exceed the percentage set forth by the Mayor/Do Governor’s ordinance reflecting local circumstances within 1/20 or less of the agreed rent or deposit, and ban any increase within 1 year after the lease contract or last rent increase (Articles 7 (1) and (2), newly inserted)
D. Mandate the Mayor and Do Governor to calculate and notify a reasonable standard rent acceptable to the local community and provide the standard rent to relevant administrative agencies so that they can use it (Articles 7-3 to 7-5)
E. Require the prioritized use of a template determined by the Minister of Justice in consultation with the Minister of Land, Infrastructure and Transport as a housing lease contract (Article 30, newly inserted)
