"Tenant Interview Scheduled" Landlord's Anger Grows

Side Effects of the Lease 3+2 Law?
Pressure to Strengthen Tenant Rights Leads to Deposit Increases, Rent Conversion
Sharing the 'Law That Doesn't Favor Tenants'
"Ultimately, Tenants Suffer"

"The era has come when South Korea, like Germany, must interview tenants. A work contract showing annual salary or a self-introduction letter is essential. I will screen out tenants who have pets or who seem unlikely to keep the place clean." Mr. A, who rents out an apartment in Gongdeok-dong, Mapo-gu, Seoul, plans to be selective about tenants once the so-called 'Three Lease Laws'?the Jeonse and Monthly Rent Reporting System, the Right to Request Lease Renewal, and the Rent Cap System?are implemented. He intends to stand firm as a landlord against laws that focus solely on tenant protection. He said, "I will carefully find tenants through verification."

Mr. B, who had been known as a 'kind landlord' by renting out an apartment in Dangsan-dong, Yeongdeungpo-gu, at a price lower than the market rate, recently changed his mind. "I used to raise the deposit only when tenants changed to maintain a good relationship, but now I plan to increase it by 5% with each contract renewal." He is even considering moving his parents in after the current lease ends rather than endure the pressure from tenants due to the Three Lease Laws.

According to the real estate industry on the 15th, landlords concerned about the significant strengthening of tenant rights under the Three Lease Laws are actively seeking countermeasures. This is a response to the serious restriction of landlords' rights and freedom of private contracts under the pretext of tenant protection. If the tenant wishes, the lease contract must be renewed once without any justifiable cause, and the rent can only be increased within 5% of the existing contract.

In fact, Germany, known as a 'tenant paradise,' requires submission of documents proving three months' salary, a copy of the passport, and credit rating when renting. This is to assure landlords of stable rent payments. During interviews, tenants must also disclose personal matters such as smoking habits and pet ownership.

Moreover, some ruling party lawmakers are indiscriminately pushing bills to introduce a 'standard rent' based on housing conditions and to strengthen the authority of the 'Housing Lease Dispute Mediation Committee,' which is fueling landlords' anger. These bills, known as the 'Three Lease + 2 Laws,' are likely to be discussed at the upcoming extraordinary session of the National Assembly this month.

Most landlords complain that the government treats them as 'sinners for owning a house' and share various solutions online to avoid becoming the 'weaker party.'

A frequently mentioned strategy is raising the Jeonse deposit before the law revision. Since the rent increase cap will be limited to 5% under the Rent Cap System, landlords may not be able to raise the deposit according to market prices. Some plan to increase the deposit with each contract renewal. A real estate agent in Dangsan-dong, Seoul, said, "The indiscriminate legislation is provoking even kind landlords who rented at below-market and stable prices."

The number of landlords switching from Jeonse to monthly rent is also increasing. With Seoul’s housing supply expected to be halved next year and Jeonse demand rising due to subscription waiting lists, this shift could worsen the Jeonse shortage. According to Real Estate 114, Seoul’s housing supply is projected to shrink from 42,456 units this year to 22,977 units next year and 13,419 units in 2022.

Research team leader Kwon Il of Real Estate Info pointed out, "If landlords convert Jeonse to monthly rent, circulating Jeonse properties in the market will become scarce." With fewer available units, landlords will gain an upper hand in transactions, potentially reducing tenants' choices. This is why landlords are starting to interview tenants, similar to job applicant interviews in the employment market, once the Three Lease Laws pass.

Even tenants express concerns on online communities, wondering if only capable people will be able to find Jeonse homes. On local mom cafes, opinions such as "Families with many children might find it harder to secure housing" are also voiced. While the surge in deposits might be curbed, the power dynamic between landlords and tenants will become more entrenched.

A real estate industry insider warned, "If landlords are pressured by reckless legislation, tenants might suffer from special contract clauses, such as having to cover repair costs themselves."