Contentious bills on tenants’ rights passed

[수친구]

Sweeping changes for landlords and tenants, more in the pipeline

Lawmakers pass revision on tenant protection on Thursday. Yonhap

The ruling Democratic Party of Korea on Thursday pushed through two controversial bills on tenants’ rights, amid strong resistance from opposition lawmakers, landlords and some experts who worry about a sudden spike in residential property rents.

Revisions to the Housing Lease Protection Act and the Commercial Lease Protection Act, which passed through the National Assembly during its full-floor session, are two of the three legislative proposals introduced by the Democratic Party pertaining to home rentals.

Under the revised laws, landlords can increase the rent by no more than 5 percent when renewing a monthly lease or a jeonse lease. In addition, tenants will have the right to extend a lease by up to two years when an initial two-year lease expires. Landlords can refuse only under a limited range of circumstances -- for example, if they or members of their families plan on residing at the property, or if the tenant violates the lease such as by subletting.

Jeonse is a rental system where the tenant hands over a large lump sum to the landlord -- on average, about 65 percent of the value of the property -- and does not pay rent. The deposit is returned to the tenant at the end of the contract.

The changes to the two laws will be reviewed at a Cabinet meeting and go into effect immediately if they gain approval.

The next Cabinet meeting will be held Friday, instead of Aug. 4 as originally scheduled, in an effort to bring the revisions into effect as soon as possible.

The third tenants’ rights bill, of the three proposed by the Democratic Party, would amend the Act on Report on Real Estate Transactions so that rent would have to be reported to the authorities within 30 days of a lease being signed. It is expected to be put to vote Aug. 4 at the next plenary session.

At Thursday’s session, the controversial bills passed with the support of 185 of the 187 lawmakers present. As they had done Wednesday when the Legislation and Judiciary Committee voted on the bills, main opposition United Future Party lawmakers boycotted the vote in protest.

The revisions to the Housing Lease Protection Act were sent to the Legislation and Judiciary Committee on Monday and approved Wednesday.

The opposition party has termed the series of real estate-related regulations proposed by the Democratic Party, which used its majority to push the bills through, as political “violence” and is reportedly planning ways to put brakes on the ruling party.

The changes are already causing a stir in the market -- ranging from concerns about a hike in rents to landlords using fake contracts to bypass the law.

According to a survey of real estate agents, the majority expect jeonse rents to continue rising in the second half. According to the real estate portal site Real Estate 114, the average jeonse rate in Seoul increased from 4.54 million won ($3,800) per square meter in January to 4.67 million won per square meter in July.

However, much higher increases -- as high as 200 million won over the last two months -- have been reported in areas of Seoul that are in high demand.

Of the 614 real estate agents surveyed, 84.1 percent said jeonse prices will continue rising in the second half. Of these, 43.6 percent said they expect prices to increase more than 4 percent.

When asked to explain their predictions, the respondents cited increased housing prices, higher demand for jeonse properties and the higher tax burden facing landlords.

In addition to the tenants’ rights bills, the ruling party has pushed a number of bills through parliamentary committees that would revise regulations concerning the real estate market.

Legislation that is expected to pass in the coming weeks would raise acquisition, capital gains and ownership taxes on owners of multiple homes.

With the ruling party holding a majority in the National Assembly, and holding the chair position on all parliamentary committees, the remaining bills are also expected to be processed and go into effect rapidly.

By Choi He-suk (cheesuk@heraldcorp.com)

[수친구]

Sweeping changes for landlords and tenants, more in the pipeline
건물주와 세입자를 위한 대대적인 변화, 파이프라인 내 더 많은 변화
Sweeping 전면적인 pipeline

[수친구]

주택 임대차 보호에 관한 특별법이 세입자에게 더 유리한 방향으로 개정된다는 데에는 누구도 반대할 명분을 갖지 못할 것이다. 많은 경제 전문가들이 후에 일어날 경제적 효과에 대해서 연구가 되었겠지만 시장 경제를 기본으로 하는 우리나라에서 일방적으로 한쪽에만 유리하게 법을 개정시킬 때 그 영향이 다른 쪽으로 파급된다는 점은 임대자에게 주택 소유에 대한 세금을 올릴 경우 결국 그 세금 부담은 수요를 급 필요로 하는 임차인에게 전가될 수밖에 없다 데서 분명히 나타난다. 이런 영향에 대한 후속 조치가 충분히 따르지 않는다면 개정된 법안의 효과는 빛 좋은 개살구에 지나지 않을 것이다. 주택이나 땅과 같은 부동산을 국유화 시키고 국방서비스와 같은 재화로 전환시키지 못한다면 부동산의 문제는 해결되기 어려울 것이다. 특히 우리나라는 땅이 좁기 때문에 전 국토가 투기의 대상이 되는 것은 시간문제에 불과하다고 본다.