"Itaewon Legend" Hong Seok-cheon Also Closes... Lee Jae-myung Requests Government Rent Reduction

Lee Jae-myung, Governor of Gyeonggi Province. / Photo by Yonhap News

[Asia Economy Reporter Kang Joo-hee] Lee Jae-myung, Governor of Gyeonggi Province, on the 20th urged the government to actively intervene in rent dispute mediation caused by the aftermath of the novel coronavirus infection (COVID-19).

In a post on his Facebook on the same day, Governor Lee requested, "The pain of tenant self-employed business owners is becoming severe due to the resurgence of COVID-19."

He added, "Even Hong Seok-cheon, a celebrity known as the 'Itaewon Legend,' saw his daily sales plummet from 10 million won to the 30,000 won range, making it impossible to bear the high rent, ultimately leading to closure. Needless to say, the losses of stores forced to suspend operations due to quarantine authorities' gathering bans are significant, and many tenants incur debt or close their businesses because they cannot pay rent."

He continued, "COVID-19 is harsher on tenants than on building owners," pointing out, "Tenants bear all business losses caused by administrative measures while still having to pay rent as is, but building owners suffer no losses at all."

Governor Lee explained, "According to the Lease Protection Act, rent can be adjusted up or down depending on changes in economic circumstances, and the Civil Act (Article 537) states that in bilateral contracts such as lease agreements, if one party's obligation becomes impossible to perform without fault from either side, the other party's obligation to perform also ceases."

He further stated, "In cases where business is effectively prohibited due to the state's gathering ban order caused by infectious diseases, it can be seen that the lessor has failed to fulfill the obligation to allow the lessee to use and enjoy the building without fault from either lessor or lessee, so the lessee's obligation to pay rent may also be waived. However, the problem is that tenants, who are realistically in a weaker position, find it difficult to request rent reductions, and even if they do, if the lessor refuses, it leads to litigation, making it an ineffective measure."

He concluded, "It is harsh and unfair to burden tenants alone with all losses caused by unavoidable quarantine measures that are no one's fault," and announced that he proposed to the government rent adjustments and rent reductions due to the COVID-19 situation.