Deposit 60 Million KRW or Monthly Rent 300,000 KRW
Full Implementation of Jeonwolse Reporting System from June 1
Fines up to 1 Million KRW for Non-Reporting or False Reporting
[Asia Economy Reporter Moon Jiwon] The final piece of the 'Lease 3 Acts,' the 'Housing Jeonse and Monthly Rent Reporting System,' will be launched abruptly starting this June. Since all lease contracts exceeding a deposit of 60 million won or a monthly rent of 300,000 won in Seoul, the metropolitan area, major cities, and all city-level regions nationwide will be subject to reporting, it is expected that the Jeonse and monthly rent market will face another turning point.
According to the Ministry of Land, Infrastructure and Transport on the 15th, from June 1, when a lease contract is made in Seoul, the metropolitan area, major cities, Sejong City, and city regions of provinces (do), both landlords and tenants must report details such as rent and contract period within 30 days. In the case of renewal contracts, the previous rent and whether the tenant exercised the right to request contract renewal must also be included. County (gun) areas in provinces with low Jeonse and monthly rent transaction volumes and renewal contracts with no rent changes are excluded from the reporting requirement.
The Ministry of Land, Infrastructure and Transport announced a legislative notice on the amendment of subordinate regulations under the 'Real Estate Transaction Reporting Act' containing these details. The target is lease contracts with a Jeonse deposit of 60 million won or more, so most housing lease transactions where contracts are made are expected to be subject to mandatory reporting. Failure to report lease contracts will result in a fine of up to 1 million won. However, the government has decided to designate the period until May 31 next year as a grace period and to defer imposing fines.
Once the Jeonse and monthly rent reporting system is implemented, information on the housing lease market will increase significantly. Currently, the government discloses Jeonse and monthly rent contract amounts and contract dates based on reports made when tenants receive a fixed date certificate, but this only accounts for about 30% of all contracts. After the reporting system is implemented, a substantial portion of the remaining 70% of transactions, which were previously unknown, will also be secured. The government plans to disclose the collected data through a newly established system starting this November. This will include information such as housing lease contract amounts, expected supply of rental housing by region and time, contract renewal rates by region, and rent increase or decrease rates.
Some express concerns that with the implementation of the Jeonse and monthly rent reporting system following last year's Jeonse and monthly rent cap system and contract renewal request right system, completing the 'Lease 3 Acts,' the Jeonse and monthly rent market, which was regaining stability, may become unstable again. However, the government maintains that since Jeonse listings are gradually accumulating and the reported data will not be used for landlord taxation purposes, there will be no negative impact on the market.
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