As it continues to be a problem that the lessee has no other choice but to move somewhere else if the lessor excessively increases the rent or deposit, the lease guarantee period was increased from 1 year to 2 years in 1989, however, the lease guarantee period has remained unchanged even three decades later. According to the Ministry of Land, Infrastructure and Transport’s 2019 Korea Housing Survey, the lessee household’s average stay period is just 3.2 years, which suggests that residential stability has not improved for the lessee.

Furthermore, while the current Act allows an implicit contract renewal, introducing an explicit contract renewal claim is expected to increase the lessee’s stay period if the lessor is not allowed to reject a contract renewal claim by the lessee without justifiable reasons.

In this regard, this Act aims to increase the lease guarantee period from 2 years to 3 years, guarantee the lessee’s right to contract renewal claim up to twice, consider rent in a contract renewal claim to be identical to that in the previous contract, and allow for increasing rent below the consumer price increase rate.

Details

A. Increase the lease guarantee period from 2 years to 3 years (Articles 4 (1) and 6 (2))

B. Require the lessor to not reject a contract renewal explicitly claimed by the lessee without justifiable reasons and allow for up to two contract renewal claims within the period of 9 years (Article 6-3, newly inserted)

C. Require any rent increase to not exceed the previous year’s consumer price increase rate (proviso to Article 7)

Obligate the lessor to not reject a contract renewal claim by the lessee without justifiable reasons (Article 6-3)