[Q&A] Can Contract Renewal Requests Be Made via Text Message? ... Government Distributes 'Guidebook'

Opening of Visit Consultation Centers in 4 Locations in Seoul and Gyeonggi
Consultations Available via Call Centers of Ministry of Land and Related Agencies
Distribution of Guidebooks Nationwide... Available for Download from the 28th

Seoul Jamsil real estate agency scene. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Moon Jiwon] To respond to the increased complaints following the introduction of the rent ceiling system and the right to request contract renewal, the government will open a total of four on-site consultation centers in Seoul and Gyeonggi Province and distribute the "Housing Lease Protection Act Guidebook."

According to the Ministry of Land, Infrastructure and Transport on the 23rd, LH will open consultation centers at the Seoul Regional Headquarters in Gangnam-gu, Seoul, and the Gyeonggi Regional Headquarters in Seongnam-si, Gyeonggi Province, while the Korea Appraisal Board will open centers at the Seoul Eastern Branch in Seongdong-gu, Seoul, and the Gyeonggi Northern Branch in Uijeongbu, Gyeonggi Province. Professional personnel such as lawyers and those experienced in lease work will be assigned to the consultation centers. Those wishing to use the consultation centers can contact the respective institutions to make a reservation.

The government will also compile the complaints received so far into a Q&A format and distribute the "Housing Lease Protection Act Guidebook." The guidebook will be distributed nationwide through local governments at various levels. The electronic version of the guidebook will be available for download from the websites of the Ministry of Land, Infrastructure and Transport, the Ministry of Justice, and other related agencies starting from the 28th.

Additionally, the government will enable consultations on the newly introduced lease system through call centers of six institutions including the Ministry of Land, Infrastructure and Transport, Seoul City, the Korea Legal Aid Corporation, Korea Land & Housing Corporation (LH), Korea Appraisal Board, and Housing & Urban Guarantee Corporation (HUG). After initial consultation at the call center, if in-depth additional consultation is needed, the caller can be connected to the responsible staff of the respective institution for a second consultation.

Below are the key Q&As from the "Housing Lease Protection Act Guidebook."

- When must tenants exercise the right to request contract renewal?

▲ Tenants must exercise the right to request renewal during the period from six months to one month before the lease contract expires. According to the principle of excluding the first day, the intention to renew the contract must reach the landlord at least one month before the contract expiration date.

However, for lease contracts first concluded or renewed after December 10, tenants must exercise the right to request renewal during the period from six months to 'two months' before the lease term ends. This is because the Housing Lease Protection Act, which revises the notification period for refusal of contract renewal by landlords and tenants from one month to two months, will take effect from December 10.

- If less than one month remains until contract expiration at the time of the revised law's enforcement, can the right to request contract renewal be exercised?

▲ It cannot be exercised. Tenants whose contract period ends between July 31 and August 31 of this year, the enforcement date of the law, cannot exercise the right to request contract renewal.

- Is implicit renewal considered as exercising the right to request renewal?

▲ If the contract is implicitly renewed, it is not considered as exercising the right to request renewal. Exercising the right to request contract renewal is recognized only when there is a clear expression of intention to exercise that right.

- Can the right to request contract renewal be exercised in the future even if the contract was implicitly renewed?

▲ Yes, it can be exercised. Implicit renewal is distinguished from contract renewal resulting from exercising the right to request contract renewal. If the contract was implicitly renewed, the right to request contract renewal can be exercised during the period from six months to one month before the renewed contract expires.

- Can tenants who have already lived for more than four years exercise the right to request contract renewal?

▲ Yes, they can. The revised law does not guarantee a maximum of four years of residence but grants the right to request renewal to extend the existing contract by two years once. Therefore, even if tenants have already lived for more than four years due to extended contracts or implicit renewals, they can still request renewal.

- Is there a specific method to exercise the right to request contract renewal?

▲ There are no special restrictions on the method of exercising the right to request contract renewal. Oral communication, text messages, emails, and other methods are all possible. However, to prevent potential disputes in the future, it is safer to use methods that leave evidence, such as certified mail.

- After exercising the right to request contract renewal, must the tenant sign a new lease contract?

▲ It is not mandatory to sign a new lease contract. Even without signing a new contract, the lease is considered to have been renewed under the same conditions as the previous lease, similar to implicit renewal, and is protected under the Housing Lease Protection Act. However, if there are newly agreed terms between the parties, such as rent, it is advisable to document them as evidence to prevent disputes.

- Can landlords increase rent by 5% annually during the lease period?

▲ No. The landlord can request a rent increase, but the tenant is not obliged to accept the increase, nor must the increase be exactly 5%. In the case of an increase upon contract renewal, the landlord and tenant can negotiate to increase the rent within a 5% range based on the existing rent.

Rent increases during the contract period can be requested only when the current rent becomes inappropriate due to changes in taxes, public charges, or economic conditions. The party requesting the increase must prove such reasons.

- The statutory rent-to-deposit conversion rate is said to be lowered from 4% to 2.5% starting in October. Will this apply retroactively to existing contracts?

▲ The revised enforcement decree will apply to lease contracts in effect at the time of enforcement. However, it applies only when the deposit is converted wholly or partially into monthly rent for the first time after enforcement.

- Does the rent-to-deposit conversion rate apply when converting monthly rent to a deposit?

▲ The rent-to-deposit conversion rate applies only when converting the deposit wholly or partially into monthly rent to protect tenants. It does not apply when converting monthly rent into a (jeonse) deposit.

When converting monthly rent into a deposit, the conversion ratio can be decided through negotiation between the landlord and tenant, referring to regional and size-specific rent-to-deposit conversion rates announced by the Korea Appraisal Board and surrounding market prices.