From the 29th, conversion rate lowered by 2.5% when switching from Jeonse to Wolse

[Asia Economy Reporter Yoo In-ho] From the 29th, the jeonse-to-wolse conversion rate, which is the rate applied when converting a jeonse deposit into monthly rent, will be lowered from 4% to 2.5%.

According to the Ministry of Land, Infrastructure and Transport on the 22nd, the revised Enforcement Decree of the "Housing Lease Protection Act," which includes lowering the statutory monthly rent conversion rate and expanding the Dispute Mediation Committee nationwide, passed the Cabinet meeting on the same day. The revised Enforcement Decree, having passed the Cabinet meeting, will be implemented on the 29th after the President's approval and promulgation. The regulations related to the Dispute Mediation Committee will be enforced from November 1st.

The jeonse-to-wolse conversion rate is the rate applied when converting all or part of a jeonse deposit into monthly rent. Conversely, it does not apply when converting monthly rent into jeonse.

The monthly rent conversion rate will be lowered from the current 4% to 2.5%. For example, if a jeonse with a deposit of 500 million KRW is converted by lowering the deposit to 300 million KRW and converting the remaining 200 million KRW into monthly rent, applying the 2.5% jeonse-to-wolse conversion rate results in a monthly rent of approximately 416,000 KRW.

To prevent landlords from rejecting tenants' renewal requests by citing false reasons, the right to access lease information will be expanded. If a landlord refuses renewal on the grounds of actual residence, tenants will be able to verify whether the landlord is actually residing or has rented to a third party by accessing the lease information status of the relevant housing even after the tenant has moved out.

The Housing Lease Dispute Mediation Committee will be expanded from the current 6 locations to 18 locations. Until now, only the Korea Legal Aid Corporation has operated the Dispute Mediation Committee, but the Korea Land and Housing Corporation (LH) and the Korea Appraisal Board will also be added as operating institutions.

This year, committees will be added in six locations: Incheon, Cheongju, Changwon, Northern Seoul, Jeonju, and Chuncheon. Next year, committees will be established in six locations: Jeju, Seongnam, Ulsan, Goyang, Sejong, and Pohang.