Persistent Noise Over the Lease 3 Laws
This Time, the Right to Request Contract Renewal
People's Solidarity for Participatory Democracy and Minbyun Publish 'Revised Commentary'
Buyers Must Complete Registration, Not Just Contract, to Refuse Renewal
Tenant Protection Claims Take Priority Until Registration
Ministry of Land, Infrastructure and Transport: "Must Be Considered Case by Case"
[Asia Economy Reporter Lee Chun-hee] Concerns are being raised that the revised Housing Lease Protection Act, which centers on the rent ceiling system and the right to request contract renewal, threatens the stability of transactions. This is because an interpretation has emerged that even if a housing purchase contract is concluded for actual residence purposes, the buyer cannot oppose the tenant's request for contract renewal before the ownership transfer registration. In response, the market criticizes that excessive recognition of the tenant's right to request contract renewal may cause harm to bona fide homebuyers and lead to legal disputes.
According to the industry on the 27th, recently the People's Solidarity for Participatory Democracy and the Lawyers for a Democratic Society (Minbyun) published the "Revised Housing Lease Protection Act Q&A 22 Questions and Answers," included in the "Commentary on the Revised Housing Lease Protection Act." The controversial issue in this material, which contains interpretations of the revised law, is the scope of the tenant's right to request contract renewal when the house currently under lease contract is purchased for actual residence purposes.
Is the buyer's actual residence dependent on the tenant's will?
The commentary divides the timing and reasons for the sale into four major categories. First, it views that buyers who concluded purchase contracts before the enforcement of the revised Housing Lease Protection Act can refuse the tenant's request to renew the lease contract. Although not explicitly included in the refusal reasons specified in the revised law, it is considered to fall under "serious reasons making it difficult to continue the lease."
The problem lies in the interpretation of contracts concluded after the enforcement of the revised law. The commentary states that the condition under which the buyer can refuse the tenant's contract renewal and reside in the house is "after completing the ownership transfer registration." It means that even if the purchase contract is concluded, if the tenant requests contract renewal before the final payment, it must be accepted.
The People's Solidarity for Participatory Democracy and Minbyun explain, "Considering the purpose of introducing the right to request contract renewal, it is reasonable to interpret that refusal of renewal by this method is not allowed." Since the buyer "inherits the legal relationship requiring contract renewal," the buyer's actual residence is not a valid reason for refusing contract renewal.
Attorney Lee Kang-hoon (Deputy Head of the People's Livelihood Hope Headquarters at the People's Solidarity for Participatory Democracy), who authored the commentary, said, "We must consider the purpose of the bill to protect tenants," and warned that recognizing the buyer's refusal of renewal without securing ownership would significantly restrict the right to request renewal. He also argued, "Considering that the law does not specify sale as a reason for refusal and that the right to request renewal is granted only once, it is more reasonable to guarantee the right to request renewal in such cases."
The commentary also interprets that tenants can refuse on-site inspections by transaction parties. It states, "During the lease period, the landlord is not obligated to allow the tenant to show the house for sale." Unless the lease contract explicitly states an obligation to show the house, the tenant can refuse at will.
Ministry of Land, Infrastructure and Transport indifferent... "Must consider case by case"
Citizens opposing the government's real estate regulation policies are shouting slogans against the Three Lease Laws at a rally held in Yeouido, Seoul on the 8th. [Image source=Yonhap News]
In response to the claims by the People's Solidarity for Participatory Democracy and Minbyun, the market criticizes that under the pretext of tenant protection, this interpretation undermines transaction stability and infringes on the freedom of private transactions.
From the buyer's perspective, it is difficult to verify whether the right to request contract renewal has been exercised between the seller and tenant or whether the tenant has waived the right. Since exercising the right to request renewal is not easy for intermediaries to intervene in, even if a house is purchased for actual residence, if the tenant insists on continuing to live there, the buyer may be unable to move in for two years.
The Ministry of Land, Infrastructure and Transport, the competent authority, has taken an irresponsible stance. A ministry official said, "Unless court precedents are established, since 'serious reasons' is an abstract and indefinite concept, actual cases must be reviewed individually," adding, "We have no choice but to judge each case."
For actual demanders preparing to purchase immediately, the situation is urgent. Mr. A, in his 30s, expressed dissatisfaction, saying, "It's already hard to find houses because there are few listings these days, and now I have to look for houses with more than one year left on the lease considering the final payment period."
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